Rail & Intermodal Update – August 8, 2025

In this week’s episode of FTR’s Rail and Intermodal Update, Senior Analyst Joseph Towers breaks down the latest developments in the rail industry, covering major merger news, current traffic trends, and the latest ARCI results. Here’s a recap of the key points discussed.

Proposed Union Pacific–Norfolk Southern Merger

The headline story this past week was the announcement that Union Pacific (UP) and Norfolk Southern (NS) intend to merge, creating the first coast-to-coast transcontinental U.S. railroad since 1869.

• The Surface Transportation Board (STB) has confirmed receipt of the notice of intent for the merger.
• UP and NS plan to file their formal application by January 29, 2026.
• Once submitted, the STB will set a procedural schedule for review.

While the length of the approval process is not yet clear, the last major Class I merger — between Canadian Pacific and Kansas City Southern — took nearly two years from announcement to approval.

Weekly Rail Traffic Overview

For the week ending August 2, 2025, total North American rail traffic rose 3.6% year-over-year.

Carloads:

• Overall carloads increased 4.5%.
• Growth was seen in 7 of the 10 AAR commodity categories.
• Leading gains came from:
  • Grain: +21.5%
  • Motor Vehicles: +15.1%
  • Other: +13.0%
  • Coal: +6.0%
• Declines were recorded in metallic ores and metals (-4.0%), farm products excluding grain (-3.6%), and petroleum products (-2.8%).

Intermodal:

• Total intermodal units increased 2.7%.
• U.S. carriers posted a slight increase of 0.2%.
• Canadian carriers saw strong growth at +13.0%.
• Mexican carrier GMX increased 8.2%.
  
  

ARCI Results – Q2 2025

The latest ARCI results show:

• Railcar deliveries: 7,916 units (higher than previously forecast)
• Railcar orders: 6,237 units
• Backlog: 29,871 units — the lowest level since Q4 2010

This marks the eighth consecutive quarter where orders have come in below deliveries, contributing to the ongoing backlog decline.

These developments — the UP–NS merger announcement, steady carload growth, and changes in railcar order activity — will be explored in more detail at the upcoming FTR Transportation Conference, taking place September 8–11, 2025, in Indianapolis. If you haven’t registered yet, you can use promo code 25FTRJOSEPH10 at checkout for 10% off your registration.