State of Freight TODAY

Rail Volumes Close 2025 on Uneven Footing as Merger Uncertainty Builds

Written by Joseph Towers, Sr. Analyst, Rail | 12/23/25 2:00 PM

As 2025 comes to a close, North American rail traffic continues to reflect a market searching for stable footing. With holiday seasonality limiting news flow, the focus turns squarely to what the data are telling us—and where risks are beginning to surface beneath the surface-level trends.

Weekly Rail Traffic: Broad Softness, Limited Bright Spots

For the week ending December 13, 2025, total North American rail traffic declined 1.1% year-over-year, with both carloads and intermodal volumes remaining negative .

  • Total rail traffic: -1.1% y/y
  • Carloads: -1.6% y/y
  • Intermodal: -0.7% y/y

While the declines were modest, the composition of weakness across commodities remains an important signal as the industry looks ahead to 2026.

FTR will be on-site at the Midwest Association of Rail Shippers Winter Meeting in Chicago, January 13–15, where Joseph Towers and Derek Young will be available for industry discussions, client meetings, and strategic conversations about the freight outlook. 

 

Carloads: Industrial Weakness Still Dominates

Most major carload commodity groups posted year-over-year declines during the week, reinforcing the ongoing softness tied to industrial production and construction-related demand.

Worst-performing commodity groups this week:

  • Metals
  • Non-metallic minerals
  • Forest products

 

These categories show sustained underperformance relative to both 2024 levels and the five-year average, particularly for forest products and metallics. These groups have now been weak for much of 2024 and 2025, underscoring the prolonged drag from housing, infrastructure timing, and manufacturing investment cycles.

Agricultural volumes offered limited support, with gains in grain and grain mill products partially offset by declines in food products and farm products excluding grain. Automotive volumes remained volatile, with recent weeks showing notable downside despite relatively flat year-to-date performance.

Intermodal: Still Negative, But Carrier Performance Is Improving

Intermodal volumes declined 0.7% y/y overall, but the carrier-level data show important nuance beneath the headline number .

  • Western carriers remain the primary source of weakness, though BNSF performance has improved relative to earlier in Q4.
  • Union Pacific volumes remain below last year but have recently tracked above the five-year average.
  • Eastern carriers showed improvement, with Norfolk Southern turning positive y/y for the first time in Q4 and CSX posting stronger growth relative to peers.

 

Merger Watch: Labor Opposition Raises the Stakes

Beyond the traffic data, one of the most consequential developments discussed in the podcast is the Teamsters Rail Conference’s formal opposition to the proposed UP–NS merger .

The Teamsters, representing more than half of the unionized workforce at Union Pacific and Norfolk Southern, cited insufficient commitments to job protection and safety. This position stands in contrast to the SMART-TD union’s earlier support, highlighting the growing complexity facing regulators as the Surface Transportation Board evaluates the proposal.

While the ultimate outcome remains uncertain, the scale and influence of the Teamsters’ opposition introduces a meaningful hurdle that market participants should not dismiss as procedural noise.

UP and NS submit their merger application
 
Following the objections raised by the Teamsters, on Friday Union Pacific and Norfolk Southern submitted their merger application to the STB in the form of a 4-part series totaling nearly 7,000 pages. The executives from both railroads also held an investor call that same day where they highlighted what they see as the expected benefits of the merger, such as:
  • 1.4 million additional intermodal loadings moving on the combined network.
  • 425k addition carloads moving on the combined network.
  • 75% of new rail units resulting from truck-to-rail conversion.
  • 10k new lanes changing from interchange to single-line service.
Now that the application has been submitted, the STB has 30 days to review it and either accept the application as complete, or reject it as incomplete. This decision by the STB will kick off the approval and integration process which is sure to go through 2026 and beyond.
 

What This Means Heading into 2026

The final rail traffic data of 2025 point to a market that is not collapsing—but also not growing. Industrial carloads remain under pressure, intermodal is stabilizing unevenly, and policy and labor dynamics are adding a new layer of uncertainty.

For shippers, railroads, equipment providers, and investors, this reinforces the need to:

  • Monitor commodity-level trends rather than relying on headline volume figures
  • Track carrier-level divergence in intermodal performance
  • Factor regulatory and labor dynamics into long-term strategic planning

Want the Full Rail Outlook?

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To learn more or to discuss how these trends could impact your business in 2026, contact Joseph Towers at jtowers@ftrintel.com or explore FTR’s Rail subscription services.