Railroad companies are betting billions on cargo terminal upgrades and new partnerships while regulators review a merger that would create America’s first transcontinental railroad. For shippers moving freight across the country, these changes will determine costs, routes and delivery times for years to come.
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Union Pacific and Norfolk Southern File for Merger
Union Pacific and Norfolk Southern submitted their merger application to the Surface Transportation Board on December 19, 2025. The proposed combination would connect UP’s 23-state western network with NS’s 22-state eastern operations.
The numbers tell the story. Norfolk Southern operates 54 intermodal terminals across the eastern United States, connecting to every major Atlantic coast port plus Gulf Coast and Great Lakes facilities. Union Pacific has invested $1.4 billion in intermodal infrastructure since 2021, building four new terminals and upgrading 12 others.
If approved, the merger would convert 10,000 existing shipping lanes from two-railroad handoffs into direct single-carrier routes. The companies project moving 1.86 million additional rail carloads and intermodal units each year. About 1.36 million of those units currently travel by truck.
Transit times would drop substantially on key routes. Shipments from Southern California to the Ohio Valley and Northeast would arrive up to 20 hours faster. Southern California to Southeast routes would save more than two days.
The Surface Transportation Board review will take up to 16 months. Both companies expect completion by early 2027.
BNSF and CSX Launch Competing Network
Three weeks after the merger announcement, BNSF Railway and CSX Transportation rolled out their own partnership. On August 22, 2025, the railroads introduced direct domestic intermodal service between Southern California and Charlotte, North Carolina, plus Jacksonville, Florida.
The new routes went live November 17, 2025, with five-day-per-week schedules from Los Angeles to multiple CSX destinations. A Phoenix to Atlanta route targets freight currently moving by truck.
Jon Gabriel, BNSF Group Vice President of Consumer Products, said the collaboration delivers greater flexibility and value for customers across key markets. The partnership avoids lengthy regulatory review because it functions as a service agreement rather than a corporate merger.
CSX and BNSF also added international intermodal connections linking Kansas City with the Port of New York and New Jersey, plus Norfolk, Virginia.
Terminal Infrastructure Gets Major Upgrades
Union Pacific opened its Kansas City Intermodal Terminal in August 2025. The facility handles domestic and international containers carrying grains, consumer goods, refrigerated products and auto parts between the Midwest and markets nationwide.
Network changes at UP cut container transit times by 25%, saving 25 hours on moves from Southern California to Kansas City. The railroad spent $1.4 billion on intermodal products over the past four years.
BNSF opened a new intermodal facility in Salt Lake City in July 2025, working with Patriot Rail and the Utah Inland Port Authority. The company also partnered with Hobby Lobby on a 45-acre terminal supporting freight movement from West Coast ports to Oklahoma City distribution centers. In Chicago, the Cicero Intermodal Facility completed final phases of a multiyear expansion.
Norfolk Southern continues modernizing its Louisville-area terminals with infrastructure investments and advanced technologies.
Automation Arrives at Rail Yards
BNSF launched bnsf | tech in January 2025 under VP and Chief Technology Officer Hari Govind. The division develops proprietary solutions for terminal operations instead of buying off-the-shelf systems.
The railroad deployed its Automated Yard Check system at terminals in Los Angeles and Alliance, Texas. Drones equipped with cameras capture aerial footage while truck-mounted cameras provide ground-level views. Machine learning algorithms combine the data to track container locations in three dimensions.
Before automation, workers spent full shifts manually checking inventory. The system now provides real-time container tracking. BNSF plans to install it at most of its 27 intermodal facilities by 2027.
The railroad also rolled out RailPASS automated gate systems and increased use of zero-emission electric cranes. Tideworks Technology provides terminal operating systems at BNSF’s Memphis and Chicago facilities, plus other Class I railroad locations.
Market Shows Contradictory Signals
Intermodal volumes dropped 3% year over year in November 2025, according to industry data. C.H. Robinson analysts attribute the decline to early 2025 import surges driven by tariff concerns. Shippers pulled forward orders that normally would have arrived later in the year.
Despite softer volumes, the global intermodal freight transportation market grew from $136.7 billion in 2025 to a projected $147.2 billion in 2026, Fortune Business Insights reported.
Pricing remains stable. Railroads are matching their spot rates to truckload pricing. West Coast outbound rates stabilized as most new contracts began January 1, 2026. Other regions show modest increases of 2% to 5% year over year.
Class I carriers finished 2025 with improved service metrics. Train speeds held steady, dwell times fell, and fewer trains sat idle in transit. BNSF achieved record low dwell times at its facilities for 11 consecutive months through the end of 2025.
Tightening truck capacity during the 2025 holiday season pushed more shippers toward intermodal options. Freight brokers report increased requests for proposals from companies targeting cost savings on longer shipping lanes where rail offers better value than trucking.
What Comes Next for Freight Shippers
The Union Pacific and Norfolk Southern merger remains the biggest question mark. Congressional representatives from 47 districts sent letters to the Surface Transportation Board expressing concerns about the proposal. The review process will likely extend through most of 2026.
Meanwhile, shippers can already access new BNSF-CSX routes without waiting for regulatory decisions. The service agreements between competing railroads offer immediate alternatives to traditional shipping lanes.
Companies evaluating cargo terminal options need to consider whether direct single-carrier service or multi-railroad connections better fit their supply chains. The infrastructure investments and technology upgrades happening across the industry suggest railroads are preparing for volume growth regardless of how merger decisions play out.
Private freight terminal development continues as companies seek alternatives to congested public facilities. The push toward automation, faster transit times and expanded route options reflects the rail industry’s response to persistent competition from trucking on long-haul lanes.
