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Union Pacific and Norfolk Southern Enhance Merger Application
Union Pacific (UNP) and Norfolk Southern (NSC) enhanced their merger application by offering customer protections that go beyond those provided in any prior rail merger. The new commitments are provided with the supplemental information requested by the Surface Transportation Board, or STB, when it accepted the companies' merger application as complete on May 28. The filing includes four new or expanded commitments: The combined railroad will significantly expand Committed Gateway Pricing, or CGP, doubling the number of eligible shipments, and extending benefits to bulk unit train shippers. The expanded program is the functional equivalent of thousands of haulage agreements in a single enforceable commitment, creating even more opportunities for customers to benefit from the merger. The railroads will preserve Class I rail options for 3-to-2 shippers as well as 2-to-1 shippers, where they can legally grant access to another railroad. No prior rail merger has included a similarly broad commitment to preserve 3-to-2 access. In the unlikely event that service performance declines during merger integration, customers will be able to obtain temporary access to alternative rail service. This commitment provides an additional safeguard to help keep freight moving if unexpected service issues arise. If the merger's public benefits are not being delivered in a timely manner, customers will gain access to a new rate relief process. Combined with the new integration period service protection, this new process provides added accountability to customers. As the Board continues its review of the merger application, Union Pacific and Norfolk Southern expect the transaction to be completed in mid-2027.
Norfolk Southern Reports Q2 Revenue of $3.5B
Reports Q2 revenue $3.5B, consensus $3.38B. "Norfolk Southern delivered a strong second quarter, exceeding our expectations as demand improved across key markets," said Mark George, President and Chief Executive Officer. "Our team adapted to a dynamic operating environment with focus and an unwavering commitment to safety. The progress we achieved reflects the dedication of our railroaders and the strength of our franchise."
Operating Ratio for Q2 2026 at 65.5%
Adjusting for the effects of merger-related expenses in 2026 and restructuring and other charges and the Eastern Ohio incident in both years, the operating ratio for second quarter 2026 was 65.5%, 210 basis points higher than adjusted second quarter 2025. Higher fuel expense and the corresponding growth in fuel surcharge revenues translated to 110 basis points of headwind to the operating ratio on a year-over-year basis.
CN and Union Pacific Sign Binding MOU
CN (CNI) and Union Pacific (UNP) announced that they have signed a binding Memorandum of Understanding establishing a framework for CN to secure competitive access in connection with the proposed transaction between Union Pacific and Norfolk Southern (NSC). The settlement agreement preserves customer options and resolves terminal railroad ownership issues, while expanding CN's presence in the Midwest and reaffirming gateway protections for all customers and railroads. Under the settlement agreement, which is contingent on the Surface Transportation Board's approval and closing of the merger: CN gains access to shipper facilities where Class I railroad options would be reduced from 2-to-1 or 3-to-2, where commercially and operationally feasible. CN acquires Norfolk Southern's ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis. CN gains new access in the Midwest through overhead rights between Tuscola, Illinois, and East St. Louis, Illinois, and rights to serve customers between St. Louis, Missouri, and Kansas City, Missouri. For the first time, CN will have a footprint in the heart of Kansas City, with usage of Union Pacific's Neff Yard. CN will not oppose the Union Pacific-Norfolk Southern merger. Both parties will collaborate through the STB process to ensure that this agreement takes effect.
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