Canadian National agreed not to oppose the pending Union Pacific-Norfolk Southern merger under a Memorandum of Understanding that aims to expand the railroad’s connectivity and capacity, according to a July 22 press release.
Under the agreement with Union Pacific, which is contingent on the Surface Transportation Board’s approval and closing of the Norfolk Southern merger, Canadian National will gain access to shipper facilities where Class I railroad options would be reduced, per the press release. This would only be applicable when commercially and operationally feasible.
Pending STB approval, Canadian National will also acquire Norfolk Southern’s ownership interests to the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis. The Canadian-based railroad will have a footprint in Kansas City, Missouri, with Union Pacific's Neff Yard and overhead rights in certain areas in Illinois, expanding Midwest access.
The merger drove the deal between the two railroads, Union Pacific CEO Jim Vena said during a July 23 earnings call, describing Canadian National as tough negotiators.
In July 2025, Union Pacific and Norfolk Southern entered into an agreement to merge networks to form the U.S.’ “first transcontinental railroad.” The STB had initially rejected the original application filed in December, which was refiled in April with additional information. The STB is still reviewing the railroads' merger application, and recently asked applicants to make certain employee data publicly available that was previously marked as confidential.
Industry players have flagged concerns over the proposed merger, alleging that a transcontinental railroad would shift market dynamics, including higher rates and stifled rail competition. Prior to the recent agreement, Canadian National was opposed to the merger.
Vena said in a press release that the Norfolk Southern merger “will preserve and enhance competitive options and create a stronger railroad industry that delivers better service for customers.”
But major railroad BNSF Railway argues that the merger is not necessary for agreements like the Canadian National and Union Pacific deal to come to fruition.
“Its own agreement with CN shows the opposite. The benefits UP highlights can be pursued today without a merger, and significant portions of the arrangement are not even contingent on merger approval,” Zak Andersen, chief of staff and VP of communications at BNSF, said in an emailed statement.
Union Pacific and Canadian National also inked an additional agreement that aims to expand North American connectivity and capacity, according to a July 22 press release. Under the terms, Union Pacific will also expand operating rights over Canadian National’s Elgin, Joliet and Eastern Railway corridor through Chicago. The EJ&E corridor is “one of the quickest ways to go around Chicago,” according to a letter sent out July 23 to Union Pacific customers by Kenny Rocker, EVP of marketing and sales.
Canadian National will also gain rights over Union Pacific's network between Memphis, Tennessee, and Eagle Pass, Texas, to support freight movements between Canada and Mexico, per the press release.
