Pushing Toward Yes

Railroad Weekly August 3, 2026

courtesy: Grupo Mexico

Inside This Issue

· Pushing Toward Yes: UP’s Latest Filing Seeks to Mollify STB Concerns

· Critics Still Cynics: BN, CP Scoff at New Submission; Still in Opposition

· Bad Deal, Says Creel: CP Chief Blasts CN For Trading Chicago Access

· If Merger Goes Thru, Watch What I’ll Do: Creel Says CPKC Ready to React

· It’s a Haul World After All: CPKC Benefiting from Longer Average Journeys

· Big Haul for All: Ferromex, Too, Benefiting from Data Center Boom

· Class Dismissed: Investors Sour on Class I RR Stocks

· Dr. Dray: Schneider Diagnoses Drayage Woes in IM Market

· Wishy Warshy: Fed Holds Rates, But Not Without Dissent

Track Talk

“Our network is performing extremely well. Our service product is strong. Our growth pipeline continues to expand. And while uncertainty remains in parts of the macroeconomic environment, we’re encouraged by the improving market conditions across several markets.”

-CPKC CEO Keith Creel

The Latest: UP and NS Update Their App

· As expected, Union Pacific and Norfolk Southern submitted another batch of additional information and data to the STB, hoping to address the Board’s specific concerns. Importantly, the new submission includes additional carrots to help ease concerns about competitive harm; Or in UP’s own words, additional “customer protections that go beyond any prior rail merger.” Most significantly, it’s offering to expand the availability of its Committed Gateway Pricing. CGP will now cover unit trains carrying bulk freight like grain, coal, sand, and stone. It will also now cover “sole-served customers on the merged UP-NS shipping to and from dual- and multi-served transcontinental customer locations on BNSF and CSX.” UP says roughly double the number of shipments will now be eligible, calling it “the functional equivalent of thousands of haulage agreements in a single, enforceable commitment.” CGP, however, still won’t apply to intermodal or auto shipments. In addition, it will only be available for five years.

· As a reminder, CGP is a proposal—devised for west coast Interstate-5 shipments following UP’s merger with Southern Pacific—that in this case would grant BNSF and CSX the opportunity to capture new business. Specifically, that’s business to or from a facility served exclusively by the merged UP/NS. An example would be freight moving on CSX from Florida to a sole-served UP/NS factory in Texas. Since a UP train is involved, UP could theoretically prevent CSX from offering service to that facility. It could simply set an uncompetitive rate for its portion of the haul. With CGP, it’s promising to offer a competitive rate. It’s in some ways like offering CSX and BNSF trackage rates, but without their having to use “their own crews and locomotives and without creating additional congestion from competing operations.” It’s even more like haulage rights, whereby one railroad can sell onto a competing railroad’s network but uses the latter’s crews and locomotives. Note that the “overwhelming majority” of all east-west transcon traffic moving on a haul involving both UP and CSX—or BNSF and NS—does so via just four gateways: Chicago, St. Louis, Memphis, and New Orleans.

· The new submission also proposes additional options for customers to temporarily use other railroads (via reciprocal switching if necessary) “in the unlikely event service slips during the [merger] transition.” UP furthermore suggests a faster STB dispute resolution process “if the merger’s benefits are not delivered on time.” And for “the small number of facilities whose rail options would move from two carriers to one, or three to two, we will provide access to an additional Class I railroad.” As marketing chief Kenny Rocker told customers last week:

“We have handed our competitors more protections than any railroad merger in history. We gave BNSF and CSX commercial access to facilities deep inside our network, guaranteed an additional Class I option at every affected facility, and backed it all with alternative service and independent oversight. As the proceeding moves deeper into the merits, opponents will finally have to put forward facts, not just rhetoric.”

· These new concessions follow UP’s deal last month with Canadian National, granting it access to compete between St. Louis and Kansas City, and ownership rights in the switching railroads serving those cities. That’s on top of an earlier pledge to keep all of its gateways open to rivals at competitive rates.

· The latest STB submission, furthermore, reiterates commitments to invest in new capacity to handle projected traffic gains. This includes a plan to spend $127m to upgrade the NS mainline linking Kansas City with Butler (Indiana). UP intends to have nine train starts a day in this corridor, up from four currently. This line is expected to handle lots of new Ohio Valley cargo to and from Southern California, using UP’s Golden State route.

· The new submission hammers home UP’s arguments of why the merger will enhance competition and benefit the public. By now you know the big ones: Trucks off highways, faster shipping times, lower cost of goods, more competitive U.S. exports, and so on. UP and NS also retold the Board that “single-line rates are approximately 21% lower than joint through rates, and approximately 23% lower than Rule 11 rates.” And no, UP argues, alliances are NOT nearly as effective as a merger. Even its CN Mexico-Chicago deal wouldn’t have happened absent its merger.

· What if there are follow-on “downstream” mergers, between say, BNSF and CSX? UP and NS “anticipate that any subsequent end-to-end merger… would enhance,