In the newest episode of FTR’s Rail Market Update podcast, Senior Rail Analyst Joseph Towers focused on two developments shaping near-term rail market expectations: the Surface Transportation Board’s rejection of Union Pacific’s proposed merger with Norfolk Southern, and new weekly traffic data showing a divided freight landscape across commodities and borders.
Together, these issues underscore why regulatory uncertainty and uneven demand patterns remain central to 2026 planning for shippers, carriers, and rail-equipment investors.
Although the ruling was issued without prejudice, allowing Union Pacific to refile, the decision effectively resets the regulatory clock. The approval process, which had been expected to extend into late 2026, now appears more likely to stretch into 2027, delaying clarity around network structure, competitive dynamics, and long-term capacity implications.
Weekly data for the period ending January 17, 2026, revealed modest overall growth for North American rail traffic. Total volumes rose 1.3% year over year, supported by a 2.6% increase in carloads, while intermodal volumes edged higher by just 0.2%.
Several commodity groups delivered notable gains:
These gains provided much of the upward momentum for total carloads.
Other segments continued to lag:
Early-year softness in the automotive sector may point to tariffs and production adjustments beginning to exert greater influence on vehicle flows.
Intermodal results painted a nuanced picture. While total volumes were marginally positive, U.S. and Canadian carriers experienced year-over-year declines. Those losses were offset by a sharp increase in Mexican volumes on GMX.
Weekly Mexican data has been volatile following recent reporting revisions, a point Joseph emphasized in the episode: “I’m always apprehensive to take the weekly data for GMX too seriously, as they have recently submitted significantly revised-down AAR figures.”
Even so, the broader softness in U.S. and Canadian intermodal volumes aligns with expectations for early-2026. Inventory pull-forwards tied to tariff concerns last year continue to shape comparisons, and near-term trends suggest volumes could remain flat to down through the first quarter before stabilizing later in the year.
Between a lengthening merger approval timeline and uneven freight performance across key commodities, the current rail environment remains fluid. Regulatory outcomes will shape long-term competitive structures, while weekly traffic patterns continue to provide important signals about industrial demand, trade flows, and equipment utilization.
FTR will continue monitoring these developments closely and updating subscribers as new data and regulatory decisions emerge.
To hear the full discussion and review the accompanying charts, listen to the complete episode of FTR’s Rail Market Update.