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December 2025
Taking some time to reflect on the “Woodstock of Railroading” that is RailTrends® makes it easier to draw some conclusions about what it all meant, what we learned and what is to come.
The proposed merger (you know the one) was, naturally, the underlying topic and reason behind the packed bleachers at RailTrends ‘25 (sold out!), but actual operations, new technologies, the growing importance of short lines and other "normal" rail topics were also discussed and debated. Lots, too, was written about RT25, from journalists and analysts — including, I swear, from those not in attendance (caveat emptor). So, below are some reflective highlights from an intense round of conversations. We’ll look back in terms of 10 and 5:
Sellouts are great for rock bands, lousy for analysts.
Jim Vena is a force of nature.
Regarding the merger, everyone "talked their book."
Partnerships don't work — or do they?
A few companies talked about themselves and their own hopes, dreams and plans: CSX, GATX, CN, CPKC.
Was the STB presentation — and its revised format — fully understood?
Technology is really blossoming in the rail industry, and perhaps not in a flowery way — maybe AI isn't the 21st century tulip?
But still, it's not fast enough! Thank you Michael Miller!
Short lines are the entrepreneurs of the rail industry — will they be put into a multi-year merger-caused penalty box?
I think the biggest surprise at RT came from — welcome back! — Ferromex (FXE), which looks to have leap-frogged its Class I peers in creating the truly digitalized railway (see AI).
The Proposed Merger, or "Talking your book" — UP, BNSF, NS and, of course, the STB. Oh, and our "Transcon Merger Update" and Analyst panels.
Rail operations: We're still here and we've got something (else) to say. But OK, we'll talk about that, too: CSX, FXE, CPKC, CN
We've got something to say and it doesn't concern The Merger: GATX, the short-line panel, Wabtec.
Rail technology is an undiscovered power source: the RailTech Panel, the Consulting panel. Michael Miller/Genesee & Wyoming (GWR), Nexxiot.
The Associations, cherishing their role in public policy and issues other than what's on the STB's plate: the AAR, ASLRRA, RAC; RSI, IANA, REMSA and my friends at the NRC.
We interrupt this review for TWO breaking announcements!
This is — or was — expected to be UPFAW (Union Pacific application filing week). But first, should we look back? And second, let’s take a brief time out, courtesy of Mr. Henley:
"Out on the road today, I saw a DEADHEAD sticker on a Cadillac A little voice inside my head said, "Don't look back. You can never look back" I thought I knew what (competition) was What did I know? Those days are gone forever I should just let them go but —"
First: BNSF filed a petition for review with the STB on Nov. 29 requesting a review, enforcement and (if necessary) modification of the 1996 UPSP merger! There has been a lot of talk among the merger skeptics of going back and reviewing prior rail merger applications to see how the projections (of volumes, share, etc.) came out in the end. Here, BNSF says that in many ways, the merger competitive maintenance (not "enhancement") provisions from 30 years ago did not/do not work — and used some strong language — "gamesmanship," "obstruction," "delaying" (a lot), "manipulative or mismanaged" and "deliberately impeded" — in its filing, and referred to some specific customers, lanes and locations (including Eagle Pass, to which they retreated after fear of issues at CPKC-dominated Laredo). I view this as an interesting gambit — if "maintaining" doesn't work, how can enhancement? Can, they ask, UP even be trusted?
Second: UP announced a delay of "about two weeks" for filing its NS merger application. (I've heard rumors of January, it was expected and broadly advertised to be filed sometime this week). It's said they blamed their consultants! In the fullness of time, this means nothing — after all, borrow from Mr. Creel, this is an attempt to build a "forever railroad." But it does seem like a slight setback to the steamroller effect UP was deploying.
OK, here I am kicking it off, and then, by category, a few gnarly tidbits:
Irresistible force versus immovable objects — RailTrends on the proposed merger. First, I should remind everyone that I am neither opposed nor a supporter of the proposed merger for two reasons. One, it's not the analyst's job to support or oppose, but to analyze and predict. Two, we don't yet know what the merger is, what the real proposal contains, what the pushback will be or what the final proposed "newco" will look like — whether it will be worth $85 billion and the time and distraction. That said, on with the show.
The most important thing to tell folks who were shut out is that Jim Vena was everywhere at RT, even when he wasn't. Many in the audience were already supporters of his White House forward strategy. During RT, the Wall Street Journal opined that in this president’s second term, "Light regulation makes U.S. mergers a much bigger deal," noting the DoJ and FTC having a "lighter touch" and linking in this rail deal. Even though the DoJ and FTC have no say in the matter (nor should the White House, Congress, etc.). What we heard may serve as a preview of the arguments we'll hear in applications, counter-filings, hearings and, likely, court cases.
Union Pacific itself projected extreme confidence. Vena correctly noted that 1996 (UP-SP) was three decades ago, and an entirely different kind of merger, not to be compared to this end-to-end NS deal per the proposal; BNSF, however, raised some fresh issues regarding the past, after the conference (as noted). Jim stressed that he was approaching this transaction from a position of operating strength and highlighted the successful Net Control IT cutover (Rahul Jalali, UP's star CIO, was an RT presenter in 2023). In addition, on a theme repeated by many presenters, Jim's view is that R2R cooperation isn't useless, especially if it is the only alternative, but that such rail partnerships tend to fail over time as priorities change — and that railroads will by nature "self-prioritize" in operating areas such as bloc creation, power, etc. He noted in terms of growth focus that "the OR is a product of what you're doing," a paraphrase of Mr. Creel's that it is the "outcome of a pro-cess." ... Jim graciously accepted our 2025 RailTrends Innovator of the Year award, becoming the 5th member of the CN Diaspora to be so honored. See the excellent November issue cover story in Progressive Railroading by Pat Foran. And: Jim wanted it on the (my) record: He was born in Italy (as was I).
Norfolk Southern was there in great numbers, reflecting what presenter and head of strategy Mike McClellan (in his 20th RT — out of 21!) reminded us: NS is still an operating company, it isn't just a "deal stock." Mac also talked about R2R partnerships, noting that for his career at NS, there were 19 such "ventures," of which only 11 remain extant, and but three labeled "active." ... The big '90s pre-split bet on a Conrail partnership linking Atlanta to New York/New Jersey was the big example of failure — basically, Conrail didn't care about their short haul and never prioritized it, but after the split/acquisition, an explosion of NS capex in their now combined lanes and a re-energized growth focus ensued (the Corridors, Pan Am, etc.). Ultimately, this argument has implications for both cooperation versus single line as well as the watershed effect. Does that past example fully apply here?
Oliver Wyman's rail practice head Adriene Bailey, always a key "performer" at the festival, subtly argued for a merger. In a major shipper survey, OW noted issues regarding (and improvements in) "ease of doing business," but also noted that price remained the number one shipper focus. No real surprise there, but in this "unique market," there are some lanes where intermodal is more expensive than truck! She shared some interesting observations: (1) ~70% of the surveyed shippers use 3PLs, many without rail experience or contacts or inclusion in their TMS platforms, which certainly can cause disadvantage to rails; (2) OW found that single-line service, having the sole-owner advantage, and the no interline advantage, often come with lower rates! (??) See? Subtle. ... OW also saw no quick fix for the (macro) truck oversupply issue, although there are indeed mounting regulatory issues that may constrain driver supply.
On the other hand, BNSF presented some survey results of their own. From a merchandise/carload perspective, 97% of their customers stated that they did not think a merger was necessary, 95% were concerned about integration risk and equally 95% do not have confidence in oversight (as we learned later, neither does BNSF itself). CMO Tom Williams also questioned historic highway conversion promises (versus actual results) and asked how "enhancing competition" jibed with Vena's public statements of "no conditions, no concessions." "this isn't socialism," etc. Not surprisingly, the commercial leader of a carrier that has recently initiated partnership deals with FXE, CSX — and NS! — thinks cooperation can work.
The STB presentation was, given the limitations on public commentary on the "Big Topic," really a demonstration of unity, competency and nonpartisanship. Commissioner Karen Hedlund allowed that she was "a proud Democrat" while Commissioner Michelle Schultz and Chairman Patrick Fuchs are, of course, not. The fact that all three presented was perhaps too subtle for some, so I want to reiterate that point. Incoming member Dick Kloster was in attendance. ... Clearing the STB backlog, being timely and hitting deadlines were a clear priority for the board (and there are signs of real success in this regard) — BUT so is, as was stressed, careful, thoughtful and thorough deliberation. Did most hear all of that or just the first fragment of the sentence? ... In fact, as an aside, again, to emphasize, many if not most of the speakers stayed for the entire event, past their time on stage, and the audience included at least two supplier CEOs and other notables beyond Dick K. ... By the way, Jim Vena was the first to ask a question of the board.
Our Expert Panel of Farrukh Bezar, the former CSX strategy head, and Roger Nober, former chairman of the STB and chief legal officer of BNSF for 16 years, was a great way to end the proceedings. This is similar to the webinar RT organized a few weeks before the fest — and one we'll do again after the application is dropped (and read). ... Roger asked a key question: When you ask what are the percentages of UP-NS getting approved, the key, the better question, is — what will be approved? For that, we need the application and the responses from the STB and the stakeholders. He also asked another key question: In assessing the "downstream effects," how can you ask a company (in this case, UP) to decide what their competition (in this case, BNSF and CSX) might do? To which I would add: What if they are on record as taking a course of action that may not be the one we/I/others expect they might take IF an unharmed merger is approved? ... Farrukh allowed that railroads certainly can grow, but they haven't (is this the path forward?) and of late he had begun to ponder: What if there were just one merger? In other words, what if BNSF and CSX (and CP and CN) got sufficient concessions that they don't feel the need to do anything further?
The Analyst Panel consisted of our usual partners, Larry Gross and Rick Paterson and myself. You know my thoughts. Larry discussed intermodal's relative underperformance versus benchmarks (GDP, TL growth rates, etc.) and the expectation for negative "comps" for Q4 into at least Q1 2026. He also saw the potential for Gaza peace re-opening the Red Sea — obviously great for the world but not so much for railroads as it is further biased toward truck-friendly east coast ports. Rick was bored — all of the rails are operating fluidly, so what's a doom-sayer to do? But he warned: "Enjoy it while it lasts!" He noted that UP and NS were the two rails at the bottom of the growth tables this century, and for them to project some 10% volume growth (based on their initial, pre-application EBITDA guidelines) in the first three years post-integration, in what is the exponentially most difficult merger, was ... aggressive. That's not the word he used.
Rails that talked railroading (but of course opined to varying degrees on The Merger — how could they not?)
CSX was represented by CFO and former CMO Kevin Boone, who talked about their renewed focus on self-improvement under their new CEO Steve Angel, who is burning the midnight oil to lean the business. Meanwhile, COO Mike Cory is taking up the baton from departed Joe Hinrichs on the labor side. Pan Am's rebuild is almost complete; the Howard Street Tunnel is done and related bridgework will allow double-stacking in the early spring. On the (Big Topic) issue of the day, he had two interesting points: (1) Cooperation can and does work, enhanced by technology and the fact that, as Rick Paterson pointed out, the industry is running so well. Kevin was excited about the BNSF deal already once expanded, and the JB Hunt business that comes with it; he noted that this took a while to plan, obviously pre-dating the UP-NS surprise. And (2) The "watershed opportunity" just might just be over-hyped, and in any event might well require a lot of capex.
CN CEO Tracy Robinson was on fire, as determined as I have seen her. This year is CN's 30th as a public company, and looking at them in the fullness of time, it's been a glorious ride. The immediate future is less certain, given the current state of the economy and the uncertainty (itself an injury) of the USMCA revision/resigning (see Wabtec’s Gina Trombley, too). There are things they can and are doing on their own — on the offensive, continuing to pursue growth where they see it; one example is Prince Rupert carload exports. Today 55% of Rupert, mostly known as the intermodal "gift that keeps on giving," is actually carload. By 2030, Tracy expects that to be 60%. Another is defensive, cutting capex by ~15% or C$600mm. Tracy assuaged my concerns about this by stating that major pinch-point projects had been completed and major fleet upgrades are done. In addition, Tracy promised that CN would be better at forecasting after having to walk back the Investor Day forecasts, but given the tsunami of macro events (from port strikes to indigenous blockades to trade wars to sharply reduced outlook for EVs to ...), I don't blame CN that much. On the Big Topic, Tracy noted:
"We do not see how (this proposed merger) can pass (new rules) muster."
The comparisons of Canadian transcons and the U.S. are silly, noting on the one hand, the density of Canada, 1/10th of that of the U.S.; and on the other, the burdensome costs of allowing transcons up north in the form of "heavy regulation," "inter-switching" (aggressive reciprocal switching) and FORR (arbitration).
CPKC SVP Merchandise, Energy and Transload Coby Bullard actually showed that the so-called "Land Bridge," here defined as Canada to/from Mexico over the U.S., was in fact not a pipe dream as I had mistakenly suspected — at ~C$430mm in revenues, it was 2X 2024 numbers. However, I do believe that if it gets much bigger, and USMCA breaks down, someone in the White House will notice. ... On the Big Topic, he said:
Keith Creel has made it clear his legacy is CPKC (i.e., he's not going anywhere).
They have confidence that the STB can handle the "bundling issue."
The proposed UP-NS does not "enhance" competition.
FXE was — or, in normal times, would have been — the revelation of the Fest. Faced with the border issue — a "humanitarian crisis" to be sure, one stopping 60 trains/day— CEO Fernando Lopez Guerra had "to rethink everything." And what he/they came up with was what FXE called the “Maquanista Project” — an AI transformation for planning, routing, fuel efficiency, yard management, etc. It is hard for this troglodyte to express how amazed the room was at this presentation. They developed this — and fast! — with Microsoft and E&Y and professed to be willing to share. Will the rails who believe in the spirit of cooperation take him up on this?
Short lines! (GWR is covered below). Our annual panel consisted of this year Patriot Rail (CEO Brandy Christian), Watco (SVP Sales-Railroad Zachary Boehme); Livonia, Avon & Lakeville Railroad (President and CEO Bob Babcock), Railroad Develoipment Corp. (VP and COO Ida Posner) and R.J. Corman (new President and CEO Justin "Big Leaguer" Broyles). All of these fine folks noted that Class I interest had been truly reignited — in fact, the panel was led by moderator and NS VP Business Development and (I always get this wrong) First and Final Mile Markets Stefan Loeb for the second year in a row. ... But the panel (and I) worry about a cultural "backsliding" as merger mania takes hold. In fact, their biggest concern is losing the momentum they have all jointly built of late.
3. Other company presentations (and I don't mean it to be dismissive — they just didn't fully fit into the review's theme)
GATX EVP and President Rail North America Paul Titterton articulated his well-thought-out view that the rail-car fleet had broken from old boom/bust patterns and entered a self-correcting supply-constrained market phase. Good for leasing rates, no bueno for OEMs.
Meanwhile, Wabtec EVP and CCO Gina Trombley pivoted from her expected technology presentation to make the case for full industry involvement in re-establishing the USMCA. She noted not all of the greater rail ecosphere had submitted comments before the deadline passed. That's a shame. Hear, Hear! Pat Ottensmeyer would be proud. I'll keep covering this topic as it evolves.
Rails & Technology — a blossoming?
This has become an important sub-theme, and I will go into this further at a later date. Many tech-related folks attended; the world's changed in this regard. But I must say, I noted a singular lack of public acknowledgement for RailPulse — its director David Shannon was there, we have featured it in the last 3-4 fests, and it was mentioned in passing by some of its founding members, but only in passing and not mentioned in presentation where it seemed to fit (OW, Consultants). Its significance, especially being conceived in what we will look back on as the "dark ages of rail-tech" in the last administration, can't be overlooked. One of its providers, Nexxiot, spoke well.
Our second annual RailTech Panel had leaders from Intramotev, RailSpire, Railinc and Commtrex. Each was looking at a different area where data and new hardware and software can be a major help. Once again, the railtech was pretty thrilling. Ask me for any info you might need.
The Panel of Consultants, the representatives of PriceWaterhouseCoopers, McKinsey & Co. and BCG, returned and were so informative. Again, not my area of expertise, but highlights included:
Surprisingly, the overhauling of a huge legacy system (the rails are full of them — somewhere there are punch cards) does not have a great ROI. I am shocked — maybe that doesn’t include breakdown risk-avoidance?
Tech integration is not an issue solely for the CIO — it is enterprise-wide.
Rails must cooperate more (recurring theme) — often they mistakenly feel that their new technology is a competitive advantage when it isn't, or is for a very brief window.
Build versus buy: As PWC's Rajeet Mohan noted, especially in light of the above and the "not built here syndrome" (and BNSF's recent decision to go from buying to building) — a hybrid!
On the other hand, GWR's CEO Michael Miller threw his annual ice bash. Last year it was — that's cool! Not good enough!" As GWR is working with Intramotev and last year's presenter Parallel Systems, Miller put his company's monies where his mouth is in terms of rapid adoption (or at least testing). This year, he noted that while "physical friction (steel wheels/steel rails) is our friend, transactional friction is our foe. To illustrate, he demonstrated by ordering a truckload shipment from origin to destination on UberFreight, Mike's usual boogieman. The entire pricing to booking deal took ... 45 seconds! That compares to 4-6 weeks on a single-line railroad, twice that for an interline move (and 2-3 years if capacity additions like switches are involved! Not good enough!
The Rail Trade Associations
Cherish is the word that use to I describe ... AAR, RAC and the ASLRRA. Only the ASLRRA (Chuck Baker) offered thoughts on the merger — well, he said they would participate in the procedure. The Americans were concerned about the coming ('26-?) Reauthorization bill, and with encouraging the STB to use "muscular pre-emption" on the issue of local authorities ruling on national rail issues (for example, CARB).
Perhaps the best question I asked at the conference was the one I asked of AAR CEO Ian Jefferies, who is forced, of course, to play the role of "Switzerland" in the merger process (two of his members for, three against, CSX leaning no): What, I asked, would happen if long fought for ideals of the AAR — no open access, truck size and weight, etc. etc. — were bargained away in the application process? Then would you have to take a stand?
REMSA, NRC, IANA & RSI talked about how uncertainty hurts the suppliers. IANA pledged to be a more forceful and public advocate, and to work hard on the cargo theft issue. All of these organizations hold what I consider to be mission critical annual conferences, starting with NRC/REMSA (Jan. 7-10, 2026), as well as Railway Interchange and IANA's Intermodal EXPO later in the year.
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