Plus: U.S. imports slow as tariffs bite, Mexico slaps 50% tariffs on Chinese goods, UP–NS defend their $85B merger amidst rival alliances, and more.
Union Pacific and Norfolk Southern say rival alliances prove their merger will strengthen competition, as CSX and CN tout new intermodal services linking Canada’s West Coast to Nashville.
Mexico plans tariffs of up to 50% on Chinese goods, reshaping North American trade flows as C.H. Robinson rolls out a new U.S.–Mexico consolidation service to cut costs.
Union Pacific and Norfolk Southern say rival alliances prove their merger will strengthen competition, as CSX and CN tout new intermodal services linking Canada’s West Coast to Nashville.
Union Pacific and Norfolk Southern are pressing their case for a merger, arguing that rival partnerships announced by other Class I railroads only presses the need for a permanent consolidation.
At the Morgan Stanley Laguna Conference, NS Chief Financial Officer Mark George said: “Just the mere idea of having a transcontinental railroad has already enhanced competition … And I think that’s a very, very important point. Our argument is being made for us.”
In recent weeks, competing carriers have unveiled new alliances that provide shippers with coast-to-coast service without requiring a merger.
Executives at BNSF, CSX, CN, and Canadian Pacific Kansas City have all stated they prefer alliances over mergers, arguing these cooperative arrangements bring immediate benefits while avoiding the risks of integration.
UP CEO Jim Vena countered that while alliances may offer short-term gains, they are not as durable or transformative as mergers. “Bottom line is this: A cooperation agreement is completely different than a consolidation,” he said. “There are way more benefits on a consolidation, on a merger, than there ever is on an agreement where you’re going to work together.”
Vena also noted that interline agreements often collapse under operational strain. “If you’re short locomotives or tight for people, you have to set the priority, and you’re going to look inward. So that’s why they always break down.”
George compared the UP–NS merger to President Dwight Eisenhower’s creation of the Interstate Highway System in 1956, calling it a chance to “redefine rail’s role in freight transportation.”
The merger application, expected to exceed 4,000 pages, will be submitted to the Surface Transportation Board after October 29. STB rules require that major mergers enhance competition rather than simply preserve it, a standard UP and NS say their proposal will meet.
Both executives said feedback from shippers and labor has been largely positive, despite some opposition from industry groups concerned about service disruptions and reduced options. Shareholder approval is also required, with NS aiming to hold a vote by year’s end.
Vena added that UP has discussed the merger with senior Trump administration officials. “They get it. They understand the value of what we’re proposing, and they think it’s an absolute win for the country.”
Source: FreightWaves | CSX/LinkedIn
Trump has fired STB member Robert Primus ahead of the Union Pacific–Norfolk Southern merger review, drawing condemnation from rail unions, advocates, and with some warning of political interference.
CPKC and BNSF reject mergers, warning of risks that could affect supply chains.
CSX faces rising investor pressure for consolidation while launching new intermodal services with BNSF, fueling speculation of coast-to-coast rail mergers after Union Pacific’s $71.5 billion Norfolk Southern deal.
Union Pacific’s $85 billion Norfolk Southern merger and Hub Group’s $51.8 million Marten Intermodal deal signal major shifts in U.S. freight, raising questions on competition, costs, and capacity.
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