Union Pacific’s service network is displayed in green and the Norfolk Southern’s in brown
The Union Pacific Railroad (UP) announced an agreement to purchase Norfolk Southern Railroad (NS) for $85M. It would be the first transcontinental railroad in the United States since the “golden spike” was driven into the tracks where the eastern and western rail sections met near Salt Lake City, UT in 1869.
This deal covers 50,000 miles of track and is expected to close in early 2027.
In order to compete with a transcontinental railroad, it would likely spawn a merger between the BNSF and CSX. Currently those four railroads, UP, BNSF, NS and CSX, handle 90% of the rail traffic in the US.
The opinions on whether one railroad controlling cargo from coast-to-coast are mixed. Proponents contend a single railroad will lead to efficiencies and better service. Opponents claim it would reduce competition, increase prices and curtail investment.
The merger would have to go through regulatory approval. Historically, Congress and regulatory bodies have not been keen on railroad mergers. It can be traced back to the 1890 Sherman Antitrust Act, which sought to restrain monopolies and foster competition. In more modern times, 2001, the Surface Transportation Board (STB) put a moratorium on railroad mergers due to a proposed union between the BNSF and Canadian National. That said, they did approve the 2021 merger of the Canadian Pacific (CP) and the Kansas City Southern (KCS) creating a single rail service connecting Canada, the US and Mexico.