Editor’s Note: This story is the second installment of a five-part series highlighting intermodal growth in the Chicago area and its impact on trucking.
As Union Pacific and Norfolk Southern, two of the biggest railroads, prepare to merge, trucking leaders now must consider: how will changes on the track impact operations on the road?
Trucking executives and industry experts predict the merger, which shareholders from both rail carriers approved on Nov. 14, could eliminate some business from long-haul, over-the-road trucking. But for others, particularly drayage carriers, the merger could boost demand for short hauls to and from rail yards and final-mile transfers.
Liberty Baugher, director of international logistics at St. Louis-based freight broker Sunset Transportation, expects the merger to create “more business opportunities for smaller local drayage companies.”
Trucking fleets with established intermodal partnerships stand to benefit, Baugher added. “Someone still needs to handle those final mile deliveries, right?”
Carriers see merger’s pros and cons
The $85 billion rail merger would connect 50,000 miles across 43 states, linking 100 ports. In addition, Union Pacific announced a new rail service connecting California’s Inland Empire with Chicago, adding five trains per week from Los Angeles to Chicago with three-day transit times — 20% faster intermodal transit compared to current industry offerings, the railroad claimed.
UP touted its service as “truck competitive” and “competing head-to-head with team driver truck services.”
While that may seem detrimental to trucking, many fleet executives have expressed positive sentiment around rail expansion and the proposed merger. Analysts see Illinois-based Hub Group benefitting from the merger due to the trucking company’s partnership with both railroads. And C.R. England hailed the merger as a “milestone for intermodal efficiency.” COO Zach England said the merger blends “the best of rail and trucking.” Freight moves farther with fewer emissions, while trucks handle the last mile, boosting speed and capacity altogether.
Trucking carriers in Midwestern states may feel the impact most, given Chicago’s role as a rail crossroads. The transcontinental railway could reduce truck trips from between Chicago railyards, with shipments instead continuing by rail. But the trucking sector doesn’t view this as a drawback.
“I think everybody wants to avoid rubber tire moves across town,” said Dean Croke, principal analyst at DAT Freight and Analytics.
Anthony Apa, Jr., president and owner of Illinois-based Mark-it Express, foresees “a lot of efficiencies” from the merger. His trucking company specializes in final-mile pickups and deliveries for intermodal containers.
But Apa added that the merger has a “monopolistic feel.” With other Class 1 railroads already consolidating, such as the 2023 merger of Kansas City Southern with Canadian Pacific, competition shrinks, railroads gain control, and shippers are left with fewer transportation options, he said.
Baugher said carriers that haul OTR freight may see reduced volumes if shippers shift from long-haul truck to intermodal, with the merger promising more direct routes, shorter transit times and lower costs.
Croke added that the transcontinental railroad might also reduce truckload moves out of Chicago, leading freight to bypass warehousing hubs in Kansas City, Missouri; Memphis, Tennessee; and Phoenix. Volumes and patterns could change for truckload or regional haulers in those markets, he said.
Trucking seeks new business options
Intermodal volumes naturally ebb and flow based on market conditions. When truck rates increase, rail volumes tend to increase. But recently, Mike Kucharski, co-owner and vice president of Illinois-based JKC Trucking, has seen intermodal volumes drop due to a narrowing price gap between intermodal and trucking.
“Trucking rates are so cheap, they’re competing with intermodal rates, sometimes even beating intermodal rates,” Kucharski said. In instances where rates are the same, shippers are opting for trucking because it’s a faster and often more reliable option, he added.
Indeed, intermodal rail volumes fell 4.9% year-over-year the week ending Nov. 8, according to the Association of American Railroads. FTR’s Intermodal Competitive Index, which measures domestic rail intermodal’s competitive landscape versus OTR trucking, is expected to hit a low point in January 2026 and remain negative through next fall — indicating unfavorable conditions for market growth.
Overall, economic indicators point to a currently weak environment for intermodal. The question is whether a rail merger, and the promise of faster service, could drive more volume to intermodal, and how trucking companies are preparing for the possible eventuality.
Apa of Mark-it Express said it’s too early to tell what the merger’s impact will be on his operations. But the trucking company is starting to evaluate potential effects and explore new locations to open trucking terminals to diversify its services for shippers. The goal is to build size and scale, Apa said, so the carrier can continue to win business from shippers, if or when a coast-to-coast railway comes online.
“We’d like to think that we’re on the good side of it,” Apa said of the rail merger.
