Class I Shakeups, Tariff Talk & Traffic Trends: Rail Industry Mid-Year Pulse Check

In this week’s Rail and Intermodal Update, FTR’s Joseph Towers covered a lot of ground—from potential blockbuster mergers to shifting trade policies and evolving traffic patterns. Here are the top takeaways from the episode:

🚨 Class I Merger Buzz: East Meets West?

Two potential mergers could reshape the North American rail landscape:

• Union Pacific + Norfolk Southern
  • Now in advanced discussions, this potential merger would create a 52,000-mile rail network.
  • Regulatory approval? Not a done deal. Expect years of STB scrutiny and complex provisions.
• BNSF + CSX
  • Rumors are swirling, but Warren Buffett (whose Berkshire Hathaway owns BNSF) has publicly denied at least his involvement in the rumored merger activity
  • If it did happen? Another 52,000-mile network—again, transformational in scale.

🎯 Strategic Insight: Mergers of this size would be game-changing but come with steep regulatory hills to climb.

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🌐 Tariff Tremors: Japan Locked In, EU on Deck

Two major trade updates could have ripple effects across rail volumes:

• Japan Deal
  • A new 15% tariff (up from 10%) on autos and most goods.
  • Avoids steeper tariffs originally slated for August 1.
• EU Discussions
  • Not yet finalized, but the preliminary agreement includes 15% tariffs on most goods, including autos, pharmaceuticals and semiconductors
  • A steep 50% steel, copper, and aluminum tariff remains intact.

📈 Rail Traffic Snapshot: Strength in Grains, Weakness in Forest Products

For the week ending July 19, 2025:

• Total Rail Traffic: Up 5.4% y/y
• Carloads: Up 5.2% y/y
  • 📉 Down: Forest products, metallic ores
  • 📈 Up:
    • Grains (+18.6%)
    • Motor vehicles & parts (+13.0%)
    • Coal (+8.1%)
    • “All Other” (+5.7%)
• Intermodal: Up 5.5% y/y
  • Strongest gains came from BNSF (best week since April)
  • Norfolk Southern saw its first year-over-year gain in six weeks
  • Canadian carriers (CN & CPKC) continue to outperform

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📊 Mid-Year Recap: Intermodal Leads, Carloads Lag

Zooming out, here’s how 2025 is shaping up through mid-July:

• Total North American Rail Traffic: Up 2.9% YTD
  • Intermodal: +4.7%
  • Carloads: +1.1%
• By Region (Intermodal YTD):
  • • U.S.: +5.0%
    • Canada: +4.2%
    • Mexico: +0.5%

🚦 Insight: Intermodal continues to exceed carload growth, boosted by early-year pull-forward activity, though continued moderation will pull this YTD figure down as we progress through 2025.

🎙️ Final Thoughts

Mergers may be speculative, but trade policy and traffic data are moving in real-time. Whether you're monitoring equipment planning or network strategy, this midpoint in the year offers critical directional cues.

Got questions or insights of your own? Joseph is always open to connecting—reach him at jtowers@ftrintel.com.

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Missed the live session? Catch the replay of our Key Issues in Transportation webinar to hear expert insights on rates, forecasts, and the trends shaping freight in 2025—free and on your schedule.