Enhancing Rail Competition – The Case is Clear
Author: Jennifer Hamann, Executive Vice President & Chief Financial Officer for Union Pacific | June 18, 2026
Key Takeaways:
● The Union Pacific-Norfolk Southern combination will strengthen competition on the rail and the road. The combination will give shippers a stronger alternative to long-haul trucking while encouraging railroads to compete more aggressively for business.
● Single-line rail service will improve speed and increase service. The combination will eliminate time-consuming interchanges and connect 88,000 new county-to-county points.
● A transcontinental railroad will drive growth across the rail industry, not reduce competition. New service offerings, expanded intermodal and manifest networks, and open gateway commitments will create stronger incentives for railroads to compete for freight that today moves by truck.
● The Union Pacific-Norfolk Southern combination will strengthen competition on the rail and the road. The combination will give shippers a stronger alternative to long-haul trucking while encouraging railroads to compete more aggressively for business.
● Single-line rail service will improve speed and increase service. The combination will eliminate time-consuming interchanges and connect 88,000 new county-to-county points.
● A transcontinental railroad will drive growth across the rail industry, not reduce competition. New service offerings, expanded intermodal and manifest networks, and open gateway commitments will create stronger incentives for railroads to compete for freight that today moves by truck.
Jennifer Hamann
With the merger, we’re also increasing our service product, adding seven new daily intermodal lanes and six new manifest trains that will allow our customers to enter new markets. These new services enhance rail competition. For our rail peers to compete against us, they will either need to enhance their own service offerings, reduce their price, or both. That statement is not hyperbole; it’s already been proven. Since our merger announcement less than one year ago, our competitors have announced four new service partnerships. This compares to only one partnership announced in the two years prior. Coincidence? Hardly.
We also expect to enhance rail competition through price. We’ve proven we can win in new markets by reducing our cost structure and delivering strong service. Single-line service will increase that momentum. As economist Dr. Mark Israel details extensively in his analysis, single-line shipments for like distances are generally 27% cheaper than business that’s interchanged between rails.
The Surface Transportation Board (STB) recognizes that end-to-end, single-line service with open gateways enhances competition. As the STB stated in its decision approving the Canadian Pacific Kansas City Southern merger:
“The transaction is end-to-end, meaning there are little to no track redundancies or overlapping routes between the railroads…. The transaction will reduce travel time for traffic moving over the single-line service; it should result in increased incentives for investment; and it will eliminate the need for the two now-separate [CP and KCS] systems to interchange traffic moving from one system to the other. This will enhance efficiency, which in turn will enable the new [CPKC] system to better compete for traffic… And the other Class I railroads, in opposing the transaction, are simply seeking conditions and other remedies that appear aimed at protecting their own traffic from competition with [CPKC] and at limiting the ability of the combined [CPKC] to meet its potential.”
Our merger is also end-to-end and is inherently pro-competition, for the many reasons I’ve described. Committed Gateway Pricing (CGP) extends those benefits to customers who otherwise would not benefit from the enhanced competition — specifically, customers solely served at origin or destination by CSX, BNSF or a short line partner. CGP has been wrongly described as the only competition-enhancing element of our filing, but that misunderstands or misconstrues the key point: CGP isn’t the sundae, it’s the cherry on top.
And here’s another critical point being missed — CGP enhances the ability of CSX and BNSF not only to compete against us, but also to compete more strongly for market share against long-haul trucking, making the entire rail industry more competitive.
The potential for the new Union Pacific to enhance rail competition is immense. We look forward to continuing to demonstrate these enhancements in the merits phase of the merger review as we look to unlock the possibilities of a transcontinental railroad.
We also expect to enhance rail competition through price. We’ve proven we can win in new markets by reducing our cost structure and delivering strong service. Single-line service will increase that momentum. As economist Dr. Mark Israel details extensively in his analysis, single-line shipments for like distances are generally 27% cheaper than business that’s interchanged between rails.
The Surface Transportation Board (STB) recognizes that end-to-end, single-line service with open gateways enhances competition. As the STB stated in its decision approving the Canadian Pacific Kansas City Southern merger:
“The transaction is end-to-end, meaning there are little to no track redundancies or overlapping routes between the railroads…. The transaction will reduce travel time for traffic moving over the single-line service; it should result in increased incentives for investment; and it will eliminate the need for the two now-separate [CP and KCS] systems to interchange traffic moving from one system to the other. This will enhance efficiency, which in turn will enable the new [CPKC] system to better compete for traffic… And the other Class I railroads, in opposing the transaction, are simply seeking conditions and other remedies that appear aimed at protecting their own traffic from competition with [CPKC] and at limiting the ability of the combined [CPKC] to meet its potential.”
Our merger is also end-to-end and is inherently pro-competition, for the many reasons I’ve described. Committed Gateway Pricing (CGP) extends those benefits to customers who otherwise would not benefit from the enhanced competition — specifically, customers solely served at origin or destination by CSX, BNSF or a short line partner. CGP has been wrongly described as the only competition-enhancing element of our filing, but that misunderstands or misconstrues the key point: CGP isn’t the sundae, it’s the cherry on top.
And here’s another critical point being missed — CGP enhances the ability of CSX and BNSF not only to compete against us, but also to compete more strongly for market share against long-haul trucking, making the entire rail industry more competitive.
The potential for the new Union Pacific to enhance rail competition is immense. We look forward to continuing to demonstrate these enhancements in the merits phase of the merger review as we look to unlock the possibilities of a transcontinental railroad.