Editor's note: This article is the second in a five-part series focusing on intermodal growth in the Chicago area and its impact on the trucking industry.Click to read the previous report。

As Union Pacific and Norfolk Southern—two of America's largest railroads—prepare for a merger, trucking industry leaders are forced to consider: How will changes on the tracks affect operations on the highways?

Trucking executives and industry experts predict that the merger, approved by shareholders of both railroads on November 14, could reduce some long-haul over-the-road trucking business. But for other companies, especially drayage carriers, the merger could increase demand for short-haul transportation to and from rail yards and last-mile transloading.

Pros and cons as seen by carriers

Liberty Baugher, international logistics director at St. Louis-based freight forwarder Sunset Transportation, expects the merger to bring "more opportunities for smaller local drayage companies." Baugher added that trucking fleets with established intermodal partnerships will benefit: "Someone has to handle the last-mile delivery, right?"

The$85 billion rail mergerwill connect a 50,000-mile rail network across 43 states and reach 100 ports. Additionally, Union Pacific has announced a newrail serviceconnecting California's Inland Empire with Chicago, adding five new weekly trains from Los Angeles to Chicago with transit time reduced to three days—which the railroad says is 20% faster than current industry intermodal options.

Union Pacific touts the service as "truck-competitive" and says it "competes head-on with team-driver truck service."

Although this may seem detrimental to trucking, many fleet executives have expressed positive views on rail expansion and the proposed merger.Analystsbelieve that Illinois-based Hub Group will benefit from the merger due to its partnerships with both railroads. C.R. England, meanwhile,praised the mergeras "a milestone in intermodal efficiency." The company's Chief Operating Officer, Zach England, said the merger combines "the best of rail and trucking"—goods travel long distances with fewer emissions, while trucks handle the last mile, improving overall speed and capacity.

Trucking carriers in Midwestern states may feel the impact most, as Chicago is a rail hub. This transcontinental rail line could reduce truck shuttle traffic between Chicago's rail yards, as freight can continue to be transloaded by rail. But the trucking industry does not view this as a disadvantage.

"I think everyone wants to avoid rubber-wheel transloading in the city," said Dean Croke, chief analyst at DAT Freight and Analytics.

Anthony Apa, Jr., president and owner of Illinois-based Mark-it Express, expects the merger to bring "a lot of efficiencies." His company specializes in last-mile pickup and delivery of intermodal containers.

Union Pacific intermodal
A Union Pacific train hauls containers. Some trucking industry experts say the railroad's merger with Norfolk Southern could shift business from long-haul trucking to intermodal.
Image credit: Union Pacific

But Apa added that the merger has "monopolistic overtones." With other Class I railroads already consolidating, such as the2023 merger of Canadian Pacific and Kansas City Southern, competition decreases, railroads gain more control, and shippers have fewer transportation options, he said.

Baugher said that if shippers shift from long-haul trucking to intermodal due to more direct routes, shorter transit times, and lower costs resulting from the merger, companies hauling over-the-road freight could face volume declines.

Croke added that this transcontinental rail line could also reduce truckload shipments originating from Chicago, causing freight to bypass warehousing hubs in Kansas City, Missouri; Memphis, Tennessee; and Phoenix. He said truckload or regional volumes and patterns in those markets could change.

Trucking industry seeks new business directions

Intermodal volumes naturally fluctuate with market conditions. When truck rates rise, rail volumes often increase. But recently, Mike Kucharski, co-owner and vice president of Illinois-based JKC Trucking, has seen intermodal volumes decline as the spread between intermodal and trucking narrows.

"Truck rates are so low that they compete with intermodal rates, sometimes even below them," Kucharski said. He added that at the same rates, shippers choose trucking because it's faster and generally more reliable.

In fact, according to data from theAssociation of American Railroads, intermodal rail volumes fell 4.9% year-over-year for the week ending November 8. FTR'sIntermodal Competitiveness Index(measuring domestic rail intermodal competitiveness versus over-the-road trucking) is expected to bottom out in January 2026 and remain negative through next fall—indicating unfavorable market growth conditions.

Overall, economic indicators point to a weak intermodal environment currently. The question is whether the rail merger and the promise of faster service can drive more volumes to intermodal, and how trucking companies can prepare for that possibility.

Mark-it Express's Apa said it's too early to tell how the merger will affect his operations. But the company has begun evaluating potential impacts and exploring locations for new trucking terminals to diversify service for shippers. Apa said the goal is to build scale and volume so that carriers can continue to win shippers' business when—or if—the east-west rail connection materializes.

"We'd like to believe we're on the favorable side," Apa said of the rail merger.