Railroads NAICS 4821

May 5, 2026 - Railroads Continue Move Towards Lean Employment

• Employment in the US railroad industry is continuing a steady, long-term slide, with payrolls down 3.9% year over year in March and off 1.5% over the past three years, according to Bureau of Labor Statistics. The longer view is even more striking: rail jobs have shrunk 17.8% over the past decade, even as overall private employment climbed 11.5%. This isn’t just a soft patch - it’s a reset. Railroads have slashed headcounts through relentless efficiency drives and changing operating models like precision scheduled railroading. Core freight like coal has also dried up and trucks have muscled in on key routes. Pandemic-era cuts only deepened the shift, with hiring never fully catching up. The upshot: an industry that’s still moving the nation’s goods, but doing it with a leaner workforce, leaving rail employment increasingly out of sync with the broader labor market.
• The value of freight moved by rail across US borders with Canada and Mexico dropped 9.2% to $184.5 billion in 2025, according to the Bureau of Transportation Statistics. While surface transportation (truck, rail, and pipeline) accounts for more than 80% of all transborder freight by value, rail plays a secondary role to trucking in both directions. On the northern border, rail holds a 12.6% share of US-Canada freight value, narrowly trailing pipeline shipments at 13.4%. On the southern border, rail accounts for 10.9% of US-Mexico freight value, with trucking dominating at 73.6%. The top US rail ports for Canadian trade are Detroit, Port Huron, and International Falls, while Laredo, Eagle Pass, and El Paso lead for Mexican trade. Despite the overall decline in rail freight value, BTS characterized rail as remaining vital across both borders.

• 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.