Norfolk Southern’s third quarter landed with a softer revenue glide path even as the railroad touted better service and tighter cost control — a mix that matters for truckload carriers watching the tug-of-war between highway and rail. NS posted $3.1 billion in revenue and adjusted earnings of $3.30 per share, lifted in part by productivity gains and a one-off land sale, while its adjusted operating ratio edged to 63.3%. Management also raised its 2025 productivity goal to roughly $200 million and highlighted a record in fuel efficiency.
Beneath those headline numbers, the freight mix shifted. Merchandise was the bright spot, but intermodal and coal weakened — a sign that consumer-facing volumes and energy flows are under pressure as the quarter progressed. That combination left total revenue up only about 2% year over year, with lower fuel surcharges acting as a headwind. For truckers, the nuance is important: a cooler intermodal book often translates into less direct pricing pressure on long-haul van lanes in the East, at least in the near term.
The intermodal softness is not isolated to one carrier. Fresh Association of American Railroads data show U.S. intermodal units fell 4.8% year over year for the week ended Oct. 18, even as total carloads held up — a weekly snapshot that aligns with what NS experienced. That backdrop suggests drayage providers could see uneven ramp activity into November, while over-the-road capacity may remain the relief valve where service-sensitive freight bypasses rail.
Competitive dynamics are also shifting. Union Pacific, NS’s proposed merger partner, reported stronger third‑quarter earnings on Thursday, with freight revenue growth and efficiency gains despite merger costs. If regulators ultimately bless the $85 billion tie‑up, a single-line UP‑NS network would stitch together West Coast ports and the industrial East without the handoffs that add days and variability — a structural change that could re-route some long-haul freight away from highway and toward rail over time.
That future isn’t settled. The companies are making their case to the Surface Transportation Board, drawing both labor and shipper comments. Supporters argue a coast‑to‑coast railroad could improve reliability and competitiveness; critics warn of fewer choices and potential rate creep. For transportation buyers, the immediate takeaway is to watch bid calendars: some shippers may hedge by splitting volume between truckload and intermodal until the regulatory path is clearer.
So what’s the playbook for trucking as NS’s results ripple through the market?
– Dry van carriers and brokers in the Southeast and Mid‑Atlantic should expect only modest intermodal competition on long‑haul lanes near term, given the latest rail volume prints and NS’s mixed segment performance. That can help keep routing guides stickier through year‑end.
– Drayage operators should plan for choppy demand at Eastern ramps; aligning turn‑time KPIs with local terminal conditions will be key as railroads balance merchandise strength against softer consumer import flows. The weekly AAR figures point to volatility rather than a straight-line recovery.
– Shippers with rail‑convertible freight should treat Q4 as a live test of rail service claims. NS is operating more efficiently — and says it’s extracting more productivity — but the quarter’s muted revenue trajectory shows service improvements must still translate into sustained volume wins. Expect sharper pricing on targeted rail corridors, while truckload remains the default for speed and surge.
Bottom line for trucking: Norfolk Southern’s quarter underscores a market where railroads are getting leaner but not yet pulling decisive share from highway on consumer-heavy flows. Keep an eye on weekly intermodal comps and the UP‑NS regulatory track — the former will telegraph near‑term lane pressure, the latter could redefine it.
Sources: FreightWaves, Norfolk Southern, Reuters, Associated Press, Railway Age
This article was prepared exclusively for TruckStopInsider.com. Republishing is permitted only with proper credit and a link back to the original source.
