Leading US railway companies Union Pacific and Norfolk Southern have agreed a US$85bn deal to merge their networks and create the first US transcontinental railroad.
As a combined company valued at more than US$250bn, the merged Union Pacific company would operate more than 80,467km of track across 43 states from the East Coast to the West Coast, serving around 100 ports, the companies said on 29 July.
The merger would create US$2.75bn in annual synergies and deliver a faster, more comprehensive freight service to US shippers by eliminating interchange delays, opening new routes, expanding intermodal services, and reducing distance and transit time on key rail corridors, the firms said.
Both companies are major grain and soyabean shippers, according to a 25 July World Grain report.
Grain shippers could benefit from the merger, which would provide a single-line service on the US Class I rail network, which was currently divided so that no single railroad reaches from the East Coast to the West Coast, according to the US Department of Agriculture (USDA).
Union Pacific transports about 1.3bn bushels of grain/year, with exports accounting for 30%-40% of those shipments, according to the company.
The company serves most of the US major grain markets, connecting the Midwest and Western production areas to export terminals in the Pacific Northwest and Gulf Coast, as well as Mexico, according to the World Grain report. It also serves significant domestic markets, including grain processors, animal feeders and ethanol producers in the Midwest and West.
In its second-quarter earnings report on 24 July, Union Pacific said grain products volume was up for the three months ended 30 June compared to the previous year and continued to be driven by new soyabean crush production in Nebraska and Kansas.
According to the FreightWaves report, Norfolk Southern has the most extensive intermodal network in the eastern USA. It serves a majority of the country’s population and manufacturing base, with connections to every major container port on the Atlantic coast as well as major ports across the Gulf Coast and Great Lakes.
Norfolk Southern moved 18,107 carloads of grain and grain mill products in 2024, according to its weekly performance reports. Agriculture products shipped included soyabeans, wheat, corn, feed, flour and ethanol.
The companies said they expected to file their application with the Surface Transportation Board (STB) within six months.
