The Union Pacific–Norfolk Southern merger is being sold as a cure for one of the most stubborn knots in the U.S. freight system: Chicago rail congestion.

This is reported by the railway transport news portal Railway Supply.

Union Pacific–Norfolk Southern merger and Chicago rail
Photo: E. Jason Wambsgans/Chicago Tribune

Through an $85 billion acquisition of Norfolk Southern, Union Pacific wants to knit together a single coast-to-coast railroad that would carry nearly half of all U.S. rail freight and, in its view, ease a long-standing bottleneck in and around the Chicago hub.

Political pushback and shipping costs

Whether this actually solves Chicago rail congestion and bottlenecks is very much up for debate. A range of shippers and public officials has already voiced concern, as noted by Railway Supply. In a letter sent last month, nine Republican attorneys general warned that the merged carrier’s “increased monopolistic power” could push shipping costs higher and weaken the United States’ competitive position in global trade.

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For ordinary Chicago residents, those shipping costs are already tangible. Capital One’s retail data show that in 2024 Americans received an average of 66 packages—up 78% over seven years—while the average price per package slipped a mere 4%. Union Pacific argues that, over time, the merger and the new coast-to-coast railroad would boost efficiency, remove trucks from highways, and cut both congestion and pollution on Chicago-area roads and on the northeast Illinois rail network that today carries 1 in 4 U.S. freight trains.

Neighborhood impacts and Surface Transportation Board review

Life looks different along the tracks. Neighborhoods clustered around rail lines and terminals where the combined railroad might expand could see longer waits at crossings, more train noise and added environmental strain. That is the concern raised by Earl Wacker, a former CSX executive and now a transportation consultant with RINA North America in Chicago.

“The influx of freight trains through Chicago has the potential to cause substantial delays in local commuters’ schedules and inconvenience their daily lives,” Wacker wrote in Railway Age magazine, bringing the national debate down to the level of daily routines.

Union Pacific intends to submit a detailed merger application to the federal Surface Transportation Board (STB) as soon as this week, spokesperson Kristen South said. The companies have already set out their case for the transaction and for the STB process in a joint press release from Union Pacific and Norfolk Southern, and the formal filing itself is expected to run to thousands of pages.

Once lodged, the application will trigger an 18-month Surface Transportation Board merger review and likely open the door to negotiations between Union Pacific and affected communities and industries, including chemical producers and agricultural shippers.

Depending on how those talks unfold, the board could attach conditions to approval of the Union Pacific–Norfolk Southern merger—restricting route changes or price increases, capping the number of trains the combined company can operate or setting limits on train length. In other words, the Surface Transportation Board review of the rail merger will determine how far the promised efficiencies can go and under what guardrails.

Chicago’s role as a freight hub

The merger proposal lands on top of growth plans that were already in motion. According to data released last year by the Association of American Railroads, carriers were planning to increase rail capacity in the Chicago region by nearly 80% by 2052. The area already has more track mileage than 40 U.S. states, underlining its role as the country’s primary rail crossroads.

That status has deep roots. Beginning in 1848, railroads raced to turn Chicago into the main commercial and financial gateway connecting factories on the East Coast with emerging markets and natural resources in the West. Instead of building continuous transcontinental lines that ran straight through, they generally found it cheaper and easier to bring freight into the city and hand it off to another railroad there.

The same pattern still shapes freight flows. In some yards, including one near McKinley Park about 4 miles southwest of downtown, Union Pacific and Norfolk Southern swap blocks of railcars. Elsewhere in the metro area, the two carriers and other railroads exchange individual shipping containers, reinforcing Chicago’s twin role as a crucial freight hub and a notorious choke point.

Rubber-tire moves and coast-to-coast flows

Union Pacific says a unified transcontinental network would change how freight moves through that hub. Today, 40-foot international containers typically spend about a week traveling from Los Angeles to Chicago and then onward to destinations such as the western suburbs of New York City. The railroad contends that a single through route created by the merger could trim one or two days off that trip.

In the envisioned network, containers would stay on trains operated by one carrier and pass through the Chicago area without being unloaded. At present, many containers are taken off trains in the city, trucked across town and then reloaded onto a different railroad’s trains heading east. Those crosstown truck transfers are known in the industry as “rubber-tire moves.”

Union Pacific argues that a unified Chicago freight rail network could remove hundreds of rubber-tire moves a day in and around Chicago and hundreds more on routes linking Chicago with other Midwest hubs such as Detroit; Columbus, Ohio; and Louisville, Kentucky. The company says this would cut congestion and emissions and help rail win back freight market share from long-haul trucks.

CEO Jim Vena has been explicit about how confident he is. He told reporters this month that he is “99.999% sure” the STB will eventually approve the merger. He is effectively buying Norfolk Southern and maintains that this is the only realistic way for railroads to pull traffic back from diesel-powered trucking.

“A single coast-to-coast network will deliver faster, more competitive service by eliminating car touches and interchange delays, opening new routes, expanding intermodal services, and ensuring faster transit times,” Vena wrote in a July letter to employees. In the same letter, he pledged that the railroad “will take even more trucks off highways.”

Bypass routes and Midwest freight rail jobs

Despite these promises for the coast-to-coast railroad, intermodal container trains have been losing ground. Larry Gross, an independent analyst based in Denver, notes that in the third quarter container trains accounted for only 10.9% of truck-size freight shipments longer than 500 miles in the U.S., down from 12.5% in 2018, with the rest of that traffic moving by truck. Vena has also told Trains magazine that he expects Chicago to remain “the nation’s premier rail crossroads,” and that he does not foresee a wholesale shift of traffic away from Chicago to Kansas City.

Yet railroaders have been complaining about congestion in the Chicago region and threatening to bypass the city for a century. As part of the merger, Union Pacific would pick up a Norfolk Southern line that runs east from Kansas City through Springfield, Illinois, and then northeast toward Fort Wayne, Indiana. On paper, that alignment could serve as a Kansas City–Fort Wayne bypass route for some traffic from southwestern gateways such as El Paso, Texas, allowing certain intermodal trains to skirt Chicago altogether.

The idea is complicated by a practical constraint flagged by Trains magazine editor Bill Stephens: to make that bypass work, Union Pacific would need to use a short section of track in Kansas City owned by its main rival, BNSF Railway. Even a very large merger cannot avoid the realities of the existing national rail map.

Meanwhile, the stakes for the Chicago-area economy are substantial. The rail infrastructure that was originally nurtured in Abraham Lincoln’s time still supports a large share of local employment. Businesses that depend on frequent freight shipments—manufacturing, construction, and wholesale and retail trade—account for roughly a quarter of all jobs in the region, according to the Chicago Metropolitan Agency for Planning.

If, over the next decade or so, rail facilities in other Midwest towns grow at Chicago’s expense, the pattern of freight rail jobs and the broader Midwest logistics economy could shift. Independent railroad analyst Anthony Hatch, based in New York, warns that such a realignment could mean fewer warehouse and logistics jobs, fewer positions at parts suppliers and fewer ancillary roles tied to the railroad.

“And then the question is: Are those the kind of jobs you wish to retain anyway?” Hatch said, framing the Union Pacific–Norfolk Southern merger as a debate not only about network design and shipping costs, but also about the future make-up of Chicago’s freight-related economy.