Union Pacific Pushes Back Against Rivals’ Trackage Rights Demands

Union Pacific pushes back on rival railroads’ trackage-rights requests

Union Pacific CEO Jim Vena is criticizing requests from rival railroads that seek broad access to a future combined Union Pacific-Norfolk Southern network, saying the proposed operating arrangements would not make business sense for the merged railroad or necessarily improve transportation service.

The comments came as the Surface Transportation Board reviews Union Pacific’s proposed $85 billion acquisition of Norfolk Southern. The merger would connect Union Pacific’s western network with Norfolk Southern’s eastern system and create a single-line railroad spanning much of the United States.

BNSF Railway, Canadian Pacific Kansas City and CSX, along with 11 short-line railroads, have told the STB they intend to seek trackage rights and customer access if the merger is approved. The requests are part of the regulatory process surrounding the transaction and reflect concerns among competing railroads about access to customers and routes that could otherwise be controlled by the combined company.

BNSF has made two significant requests. The railroad said it would seek 824 miles of trackage rights over Norfolk Southern between Chicago and intermodal terminals in Harrisburg and Bethlehem, Pennsylvania. BNSF also proposed creating a neutral switching carrier to serve BNSF- and Union Pacific-served facilities along the Gulf Coast, one of the country’s largest chemical-producing regions.

BNSF has argued that the requested trackage rights are needed to preserve competition and service options for customers in eastern Pennsylvania, a major distribution area for consumer goods.

Speaking at the Morgan Stanley 14th Annual Laguna Conference, Vena questioned the economics of allowing a competing railroad to operate over Union Pacific-owned track for hundreds of miles. Without naming BNSF, he said a railroad granting access over an 800-mile segment would charge a per-car-mile fee that could make the competing railroad’s service more expensive.

Vena said Union Pacific could agree to such a request and increase the access price, but he said that would not represent a practical business solution. He described the idea of giving up access to a railroad’s infrastructure without a clear reciprocal benefit as inconsistent with basic business principles.

Vena emphasized that he is not opposed to agreements with other railroads when both sides benefit. Union Pacific and Canadian National reached haulage and trackage-rights agreements in July. Under those arrangements, Canadian National received haulage rights between Memphis and the Eagle Pass, Texas, gateway to Mexico, while Union Pacific received access to Canadian National’s former Elgin, Joliet & Eastern bypass around Chicago.

A separate agreement tied to approval of the Union Pacific-Norfolk Southern merger would allow Canadian National to operate over and serve customers on Union Pacific’s line between the St. Louis area and Kansas City. The arrangement would also include access to Union Pacific’s Neff Yard in Kansas City.

“Would I make a deal with another railroad? Absolutely. But it would have to be a win-win for Union Pacific and for them,” Vena said.

Norfolk Southern CEO Mark George and Vena have also pointed to new interline partnerships among rival railroads as evidence that the proposed merger is already encouraging more competition. George said the possibility of a transcontinental railroad has prompted other carriers to form new commercial relationships.

Vena, however, said a cooperative agreement is different from a merger. In his view, combining the two railroads would provide more consistent service than relying on separate carriers to coordinate movements across interchange points.

That distinction matters to shippers and, indirectly, to truck drivers. Rail and truck transportation frequently compete for intermodal, consumer, industrial and other freight. A single-line railroad can eliminate an interchange between carriers, which Union Pacific says could reduce delays and simplify service. Vena also said single-line moves are often less expensive than interline shipments.

Rival railroads have taken the opposite position, arguing that a combined Union Pacific-Norfolk Southern would become too large and gain too much control over important routes and customers. BNSF, CSX and Canadian Pacific Kansas City have urged the STB to reject the transaction, citing concerns about the size and market power of a coast-to-coast railroad.

Vena disputed claims that the merged railroad would handle half of all U.S. rail traffic. He said BNSF has more gross ton-miles than Union Pacific and that the combined company would not represent 50% of the market on that measure.

The STB accepted Union Pacific’s revised merger application on May 28, beginning the statutory 12-month review period. Comments, protests, requests for conditions and responsive applications from competing railroads and other interested parties are due Nov. 18, 2026.

The merger agreement allows Union Pacific to withdraw from the transaction if the STB approves it only with conditions the company considers excessively burdensome. If Union Pacific walks away under those circumstances, it could owe Norfolk Southern a $2.5 billion breakup fee.

Vena said the railroad needs the merger to improve its ability to compete with trucking, including the potential growth of autonomous trucks. He argued that faster, more seamless rail service could help railroads compete for freight that might otherwise move by highway.

For professional drivers, the dispute highlights a broader competitive question: whether more freight will move through coordinated rail networks or remain on the highway. The STB’s decision will determine not only whether the largest proposed U.S. rail merger in decades can proceed, but also what access competing railroads—and the customers they serve—will have to the resulting network.