Railroads NAICS 4821

Jan 13, 2026 - Railroad Merger to Shake Up Regional Intermodal Routes

• Union Pacific’s proposed $85 billion acquisition of Norfolk Southern would accelerate transit times on select high-volume intermodal routes while creating delays and capacity risks elsewhere. The combined company plans to invest more than $1 billion in track, yard, and terminal upgrades to support new single-line services, including a Southern California-to-New Jersey route bypassing Chicago, and faster lanes linking the Gulf Coast and Northeast. Several terminals would see major expansions to handle sharp volume increases. However, other locations would face large traffic gains with little or no new investment, raising concerns about congestion and longer container dwell times. Some shippers, particularly those moving freight from Southern California to Memphis and St. Louis, would lose direct service and face added layovers. Rival railroads argue the merger application downplays these trade-offs, prompting regulators to review whether the filing adequately addresses potential service degradation.
• The US railroad industry is showing conflicting economic signals, according to new data from the Association of American Railroads (AAR). Freight volumes are holding steady in some areas, particularly agricultural shipments and intermodal traffic, suggesting resilience in consumer demand and global trade flows. However, carloads tied to manufacturing, energy production, and construction materials are down, reflecting broader industrial weakness. The uneven performance highlights how railroads are caught between sectors still expanding and those slowing under tighter financial conditions. Industry analysts say the mixed trends point to a “plateau” rather than a downturn, with carriers adapting through efficiency improvements and cost control. While railroads are unlikely to see a major rebound without stronger industrial activity, steady intermodal demand and grain exports are helping to stabilize operations. The sector’s performance has become a key indicator of shifting economic momentum across US supply chains and heavy industry.

• Amtrak debuted the Acela NexGen high-speed train service in August 2025, which travels between Boston and Washington DC - with stops in Philadelphia, Baltimore, and New York City along the way - at speeds of up to 160 mph. It is 10 mph faster and has 27% more capacity than the last generation of Axcela trains that launched in 2000. Amtrak has plans to roll out 27 additional NexCen trains, all assembled in upstate New York, by the end of 2027. While the train is the fastest in the US, it lags far behind high-speed rail capabilities in Asia and Europe, primarily due to the fact that centuries old rail lines in the US wind through populated Northeastern communities. Amtrak has high hopes for its next generation of high-speed trains, as the last time it debuted faster rail capabilities 25 years ago, the company doubled in market share.
• The federal government’s decision to cancel a $63.9 billion planning grant for the Texas Central Railway (TCR) project, a high-speed rail line between Houston and Dallas, will instead have to move forward as a private-sector project. The project is designed to cover the 240 mile trip between the cities in 90 minutes. Since it was proposed in 2009, TCR has faced resistance from state lawmakers, struggled to obtain the land necessary to build the line, and seen its original $12 billion cost estimate skyrocket to roughly $40 billion, according to the Department of Transportation. Once the grant was pulled the project’s lead investor, Fort Worth-based Kleinheinz Capital Partners, plans to move forward with the rail line as a private venture. TCR says it has acquired about 25% of the land necessary to push the project forward and that any new investment will be sought out in the private sector.