By merging with Norfolk Southern, Union Pacific wants to create a coast-to-coast railroad to carry nearly half of all U.S. rail freight.
Union Pacific says the $85 billion merger would serve the public interest and win federal approval by unclogging Chicago, the cradle of American railroading and still its biggest and most notorious bottleneck.
But the “increased monopolistic power” of the combined railroad will drive up shipping costs and could kneecap America’s global competitiveness, according to nine Republican attorneys general in a letter last month.
Shipping costs are already a pocketbook issue for everyday Chicagoans. Americans received 66 packages on average in 2024, a 78% increase over seven years, according to Capital One retail data. During this time, the average price per package dropped by just 4%.
Over time, Union Pacific’s promise of greater post-merger efficiency could mean less congestion and pollution on Chicago’s highways and on the northeast Illinois rail network that 1 in 4 U.S. freight trains now cross to get where they’re going.
The Chicago skyline can be seen behind freight train segments in the Norfolk Southern Ashland Yard on Nov. 25, 2025. (E. Jason Wambsgans/Chicago Tribune)
But neighborhoods located around tracks and terminals where the combined railroad may want to expand could get inundated with more traffic tie-ups, noise and environmental damage, according to Earl Wacker, a former CSX executive and now a transportation consultant with RINA North America in Chicago.
“The influx of freight trains through Chicago has the potential to cause substantial delays in local commuters’ schedules and inconvenience their daily lives,” Wacker wrote in Railway Age magazine.
As soon as this week, Union Pacific plans to file a merger application with the federal Surface Transportation Board that will run into the thousands of pages, according to spokesperson Kristen South.
The application will trigger not just an 18-month STB evaluation but also, potentially, negotiations between Union Pacific and affected communities and industries, including chemical and agricultural shippers.
Based on the outcome of those negotiations, the STB could place limits on route changes or price increases at the combined railroad. The board could also limit how many trains the combined railroad could run and how long each train would be.
North American railroads were already planning to boost by nearly 80% their rail capacity in the Chicago region by 2052, according to data from the Association of American Railroads last year. The area has more tracks than 40 U.S. states.
Starting in 1848, railroads raced to make Chicago the preeminent commercial and financial crossroads between booming factories on the East Coast and voracious markets and vast natural resources in the West.
But they always found it easier and cheaper to hand their freight off to each other in and around the city than to build transcontinental railroads that actually passed through Chicago. In some yards, including near McKinley Park 4 miles southwest of downtown, Union Pacific and Norfolk Southern exchange groups of railcars. Elsewhere, they hand off individual shipping containers to each other and to different railroads.
By running a single transcontinental railroad, Union Pacific says it can shave one or two days off the full week that 40-foot shipping containers now spend traveling from Los Angeles to Chicago and then on to, say, the western suburbs of New York City.
Instead of getting unloaded in Chicago, and then ferried across town by truck to a New Jersey-bound train operated by a different railroad, the containers would roll straight through Chicago without ever touching the ground.
Railroaders call their current crosstown container shipments rubber-tire moves, referring to the wheels of the trucks.
With a unified rail network, Union Pacific hopes to eliminate hundreds of rubber-tire container moves each day in and around Chicago, and hundreds more between Chicago and surrounding Midwest cities like Detroit; Columbus, Ohio; and Louisville, Kentucky.
Jim Vena, the Union Pacific CEO, told reporters this month he’s “99.999% sure” the STB will approve the merger. He’s essentially buying Norfolk Southern, and he says this is the only way for the railroads to recapture market share from trucks.
“A single coast-to-coast network will deliver faster, more competitive service by eliminating car touches and interchange delays, opening new routes, expanding intermodal services, and ensuring faster transit times,” Vena said in a July letter to his employees.
“We will take even more trucks off highways,” Vena promised in his letter.
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According to Larry Gross, an independent analyst in Denver, container trains captured just 10.9% of truck-size freight shipments longer than 500 miles in the U.S. in the third quarter, down from 12.5% in 2018. The rest went by diesel-powered trucks.
Vena also told Trains magazine in August that he expects Chicago to remain the nation’s premier rail crossroads. “I don’t see a wholesale change that we’re going to move everything out of Chicago and go straight to Kansas City,” he said.
But railroaders have been complaining about Chicago’s congestion and threatening to bypass the city for a century.
In fact, through the merger, Union Pacific would acquire a Norfolk Southern line that winds east from Kansas City through Springfield, Illinois, and then northeast to Fort Wayne, Indiana.
The line would be perfect for bypassing Chicago from southwest intermodal hubs like El Paso, Texas. But there’s one big problem, according to Bill Stephens, the Trains magazine editor. Union Pacific can’t run the line through Kansas City without using a short stretch of track owned by its main rival, BNSF Railway.
As executives jockey for position on a national rail infrastructure that Abraham Lincoln nurtured at its birth, big chunks of the Chicago economy hang in the balance.
Businesses that rely on frequent freight shipments, including manufacturing, construction, and retail and wholesale trading, account for a quarter of all jobs in the region, according to the Chicago Metropolitan Agency for Planning.
“If, over the next decade or so, the rail facilities in these other Midwest towns start growing at Chicago’s expense, then that could mean fewer warehouse jobs, fewer logistics jobs, fewer parts suppliers, and all the stuff around the railroad,” said Anthony Hatch, an independent railroad analyst based in New York. “And then the question is: Are those the kind of jobs you wish to retain anyway?”
For Larry Hopkins, the answer is an emphatic yes. For the last 15 years, he’s been crisscrossing the Midwest in vans to pick up and drop off crews at waiting trains.
Hallcon Corp vans that transport train crews pick up workers from a hotel near Midway Airport on Nov. 25, 2025. (E. Jason Wambsgans/Chicago Tribune)
A van transports a crew member as a Norfolk Southern, left, and two Union Pacific freight engines sit in the Norfolk Southern Ashland Yard on Nov. 25, 2025. (E. Jason Wambsgans/Chicago Tribune)
He works for Hallcon Corp., a Chicago-based company that operates shuttles for railroads, airlines, hospitals and universities across the country. Hallcon didn’t respond to emails requesting comment.
Hopkins, who is 59, lives near Midway Airport. But on any given day, he could drive anywhere from La Crosse, Wisconsin, to Mount Vernon, Illinois, to Toledo, Ohio, as trains start and stop not just at rail yards, but also in the middle of cornfields during federally mandated shift changes for the crews.
He earns $23.07 an hour, but it’s always been a precarious life. He’s on call five days a week, but he doesn’t get paid unless he’s assigned to a train. Of the long-distance Hallcon “road’” drivers who belong to United Electrical Workers Union Local 1177, of which he’s president, about a third routinely don’t get 40 hours of work each week, Hopkins said.
The Chicago-based local represents 625 Hallcon drivers in six Midwest states.
Hopkins said he’ll believe Union Pacific’s rosy growth projections when more of his members actually get assigned to trains. If the number of trains drops instead, and he loses his job, he could wind up doing what he was doing before, he said. That was driving nonemergency medical patients.
“I would do my best to keep the income level I have now,” Hopkins said. “But I would say at least a third of my income would be gone.”
Miya Bell, 45, is vice president of UE Local 1177. She started at Hallcon just under three years ago after her two kids grew up and left home. She’s a “yard” driver, meaning she’s not required to drive more than an hour away from Chicago. She operates under a different set of union work rules than Hopkins and the “road” drivers, typically working 60 hours a week and receiving $18.10 in hourly pay.
Miya Bell, Local 1177 vice president, who represents van drivers that transport train crews on Nov. 25, 2025. (E. Jason Wambsgans/Chicago Tribune)
“Everybody who works at Hallcon honestly loves their job. That’s why so many people have such long seniority,” Bell said.
“We feel like we’re a major part of the functioning of the railroad. And yet, in this whole process, we might still get treated like people who don’t matter,” she said, referring to the proposed merger.
The United Electrical Workers oppose the merger. Four rail unions representing engineers and conductors, boilermakers, firemen and carmen have endorsed it.
Under STB rules, Union Pacific will need to show that the merger will enhance competition and produce public benefits that can’t be achieved any other way.
This could be a tall order since one-off partnerships aimed at boosting growth and cutting costs are proliferating across a railroad industry where volume, market share and market capitalization have been stagnant for years.
In August, for example, BNSF and CSX announced a joint campaign to boost intermodal or container shipping from Los Angeles to Charlotte, North Carolina, and Jacksonville, Florida.
Intermodal trains account for about half the total volume at the big U.S. railroads. They also account for most of their growth potential since traditional businesses like hauling coal are continuing to decline.
The stakes are exceptionally high with the Union Pacific application because an STB approval, depending on how it’s structured, could force the other two big U.S. railroads, BNSF and CSX, to merge, according to Hatch.
These two mega U.S. railroads could in turn absorb their counterparts north of the border — Canadian National and Canadian Pacific Kansas City Ltd., he said.
“The board will be deciding some of the biggest issues in railroading history,” Hatch said. “And if you’re a public servant, man, isn’t that what you get into this for?”
The STB instituted tough guidelines in 2001 after a chaotic set of mergers, including Union Pacific’s takeover of the Southern Pacific railroad in 1996, which stalled rail traffic for months.
“There’s a feeling in the stock market that Union Pacific is trying to hustle this through and make it seem like it’s inevitable,” Hatch said. “It makes sense, you know, from their tactical point of view. But I don’t think so.”
As they try to grow again, Gross said, railroads could find big opportunities in the so-called watershed area that stretches from the headwaters of the Mississippi River south to the Gulf of Mexico.
The area is underserved by railroads because intermodal trains stuffed with Chinese imports often roll from the West Coast straight through to Chicago. Trucks then have to haul the containers back to river towns like Minneapolis, boosting transit times and costs, Gross said.
Railroads could exploit these watershed opportunities by clustering more Minneapolis-bound containers on the same train in Los Angeles, and then running the train there instead of into Chicago.
They could do so, Gross said, either through mergers or one-off partnerships like the one involving BNSF and CSX in North Carolina and Florida.
Vena says such partnerships typically don’t last long enough or go deep enough to generate the kind of systemic change he’s seeking with the merger.
Vena won’t reveal detailed plans until he files his formal merger application. In a preliminary disclosure, he projected $1 billion in annual cost savings for the combined railroad in three years, and $1.75 billion in additional revenue.
These projections could be way too optimistic, according to Rick Paterson, an independent railroad analyst in New York.
“At the end of the day, this is a ‘trust me‘ story, because they’re asking us to believe that these two companies, which have recorded zero volume growth over the last 10 years, will now grow by 10% within three years,” Paterson told the Railtrends industry conference this month, according to Trains magazine.
The merger is also attracting heavyweight critics. In July, the American Chemistry Council, which includes some of the country’s largest rail shippers, said it will fight the merger if it doesn’t enhance competition.
“Many rail customers are currently dealing with high rates and unreliable service,” the council said in a statement. “Further consolidation within the rail industry is likely to make these problems worse.”
BNSF, which is owned by Warren Buffett’s Berkshire Hathaway, said the merger will help railroad shareholders but not their customers.
BNSF also said it doesn’t want to get stampeded by Wall Street and Union Pacific, if the railroad’s Norfolk Southern merger is approved, into buying CSX. “BNSF is not looking to create a national duopoly,” the railroad said in a statement.
In 1960, three dozen so-called Class One or major railroads operated in the U.S. Today, the country has just four. Canada has two.
Vena is doing his best to mollify potential critics by, among other things, promising jobs for life for anyone working at Union Pacific and Norfolk Southern on the day the merger is approved.
But his application still raises many questions about how such tectonic economic and political decisions get made.
In September, Vena told investors that White House officials “understand the value of what we’re proposing,” according to Trains magazine. His statement came after he met directly with President Donald Trump in the Oval Office to discuss the merger and donate money for the White House ballroom.
Earlier this month, former STB Chair Marty Oberman, also a former Chicago alderman, wrote a blistering editorial for Trains magazine. In the editorial, Oberman defended both the board’s ability to make an independent decision and the necessity of doing so to protect the public interest.
“I worked closely with the three current STB members — two Republican appointees and one Democrat,” Oberman wrote. “I witnessed … their near fanatic devotion to examining the volumes of facts in the record and painstakingly basing their votes on that record, alone,” he wrote.
Trump, however, can’t resist sticking his oar in the water.
In August, he fired Robert Primus, a Democrat whom he appointed to the STB during his first term and who later emerged as a merger skeptic. And after meeting with Vena in the Oval Office in September, Trump told reporters the proposed merger “sounds good to me.”
Lippert is a freelancer.
