A leading shipper coalition is sounding the alarm over Union Pacific’s bid to acquire Norfolk Southern, arguing the coast‑to‑coast rail combination would tilt market power away from customers and toward a single carrier. The Freight Rail Customer Alliance told FreightWaves that past consolidations have delivered higher rates and inconsistent service, not the operational gains railroads promise. For truckers, that warning translates into a familiar playbook: when rail falters or prices jump, freight often migrates back to the highway — quickly.
The pushback intensified this week. On September 16, the Rail Customer Coalition urged the Surface Transportation Board to scrutinize the deal under the agency’s “enhance competition” standard, cautioning that unchecked consolidation risks fewer choices for captive shippers and new pressure on supply chains. The coalition cited analysis showing inflation‑adjusted rail rates have climbed more than 40% over two decades as the number of large U.S. railroads shrank. That framing matters for trucking: if regulators agree the merger would dampen rail‑to‑rail competition, shippers may hedge with more truck capacity and longer commitments on the lanes most exposed to rail concentration.
Trade press covering the filing said the coalition’s letter warns regulators that a transcontinental tie‑up could trigger another round of mergers, narrowing options further for bulk shippers and heavy manufacturing — the same cargoes that compete most directly with truckload and specialized carriers for long‑haul moves. If that risk is judged credible, expect procurement teams to diversify mode share now, not later.
Wall Street, meanwhile, is beginning to price in a path to approval. A Barron’s note on September 16 raised Union Pacific’s rating and nudged the odds of regulatory clearance higher, a signal to shippers and carriers that financing and investor patience may be supportive if regulators impose conditions but stop short of a veto. For trucking executives, the takeaway is practical: plan both for a merger that proceeds (with remedies) and for a protracted review that delays network changes but keeps uncertainty elevated.
Even before any ruling, the railroads are marketing deeper cooperation. On September 15, Union Pacific announced a new interline domestic intermodal service with Norfolk Southern linking the Louisville market (via a Kansas City interchange) to Western gateways including Los Angeles, Lathrop, Seattle, Portland, Salt Lake City and Houston, with “truck‑competitive” transit times and a mid‑October start. Expect more pairing like this as the carriers try to demonstrate velocity and reach — and watch the knock‑on effects for drayage, chassis turns and regional trucking around Louisville, Kansas City and West Coast ramps.
Why it matters for trucking:
– Pricing risk can swing volume. If shipper groups are right and rail pricing rises post‑merger, truckload and dedicated fleets could see sustained demand on rail‑competitive corridors (Upper Midwest–Northeast; Gulf–Mid‑Atlantic) as contracts reset. Conversely, if single‑line rail service reliably trims dwell and handoffs, some long‑haul freight could shift off the highway, reshaping length‑of‑haul and asset deployment.
– Service volatility creates spot spikes. Integration missteps — even temporary ones — tend to spill freight to trucks. Past rail transitions produced short, sharp bursts in spot rates and tender volumes. Keep contingency capacity and fuel hedges ready for Q4, when the new interline product launches and peak retail flows collide.
– Intermodal mix shifts the work. The new Louisville‑West services point to more cross‑country steel‑wheel moves and more local dray. That favors carriers positioned for first/last‑mile at inland terminals and port‑adjacent markets over pure long‑haul capacity.
The debate will be front‑of‑mind across the intermodal ecosystem this week in Long Beach, where IANA’s EXPO is bringing together railroads, motor carriers and BCOs from September 15–17. Expect loud arguments — from both sides — over whether “single‑line” rail can truly recapture freight from trucks without sacrificing resilience, and how any STB conditions (like expanded competitive access) would play out on real lanes.
Bottom line for fleets: build a two‑track plan. If regulators force robust competition safeguards and the new UP‑NS offerings hit their marks, be ready for modest long‑haul erosion paired with stronger dray and regional demand around key ramps. If shippers’ cost and service fears materialize, prepare for rapid lane‑by‑lane highway substitution — and the pricing power that tends to follow. Either way, fall planning should assume more intermodal products on the board and more volatility in mode mix than a typical year.
Sources: FreightWaves, ICIS, Barron’s, Union Pacific, Trains
This article was prepared exclusively for TruckStopInsider.com. Republishing is permitted only with proper credit and a link back to the original source.
