US Transportation and Warehousing Sector NAICS 48

Jul 21, 2025 - Major US Railroad Companies in Merger Talks

• The railroad industry could soon see a megamerger that creates the nation’s largest rail company if merger talks between Union Pacific and Norfolk Southern succeed. If a deal comes to fruition, the combined company would create a massive rail network that spans the entirety of North America and would transport the majority of freight in the US. Union Pacific, with a market value of about $140 billion, has touted the benefits of a transcontinental railroad in America claiming it would improve service and reduce delays when changing cargo to a new rail carrier. Norfolk Southern, worth $60 billion, is particularly vulnerable to takeover because of an infidelity scandal that drove out CEO Andy Shaw last year, as well as its poor handling of a 2023 train derailment and chemical spill in East Palestine, Ohio. Any deal struck would likely spur intense regulator scrutiny from the US government.
• There is more vacant warehouse space across the US than at any point in the last 11 years as companies respond to tariffs by delaying leasing space. According to real estate firm Cushman & Wakefield, vacancy rates climbed to 7.1% in Q2, up from 6.9% in Q1 and 6.1% year over year. Vacancy rates haven’t climbed higher than 7% since 2014. Warehouse leasing by retailers, wholesalers, and manufacturers is based on long-term planning, and the yo-yoing tariff situation runs counter to that strategy. Businesses stockpiled inventory before the tariffs were announced and then paused overseas orders and leasing decisions afterwards. Tariff headaches come at a time of weak demand for warehousing after a building boom during and after the pandemic oversaturated the market and drove vacancy rates down to 3%. Developers have since pulled back on warehouse construction, with newly built space available down 49% from last year.

• The trucking industry still struggles with the Great Freight Recession as bankruptcies for trucking and logistics companies continue to creep higher in 2025 as a result of the US trade war. Trucking saw a marked increase in bankruptcies so far in Q2, with about 17 freight carriers either going out of business or attempting to reorganize. So far this year there have been a total of about 20-25 total trucking companies declaring bankruptcy. Large and small, or regional or national, no carrier is immune to the decline in available freight from tariffs on imported goods. One week in June alone saw three major carriers file for relief - Dolce Truckload, Contract Managed Services, and GD Transport. Other carriers have simply shut down without filing or explanation, including Illinois-based LTI Trucking and Florida’s Davis Express, both in April. Industry analysts expect the trend to continue if progress isn’t made on trade policies.
• Warehousing and storage service industry revenue increased by 7.9% year over year in Q4 2024 to about $15.3 billion, according to the US Bureau of Labor Statistics. Several industry trends have allowed warehousing companies to increase offerings and thereby increase revenues. A boom of e-commerce shopping brought on by the pandemic has increased demand for last-mile delivery services and the geographically broad storage needs of retailers. The pandemic has also spurred suppliers to increase inventory levels to boost flexibility to supply chain disruptions. Technologically, use of automation, robotics, and AI is driving efficiencies and allowing warehousers to handle more volume and increase capacity. The growth of specialty storage needs, such as refrigerated warehouses for pharmaceuticals and frozen foods are infusing the industry with new, high-priced services. And as industrial land becomes more expensive to build on, the warehousing industry is increasingly passing those costs on to customers.