Rail and Intermodal

North American freight railroads are among the most profitable transport businesses in the world and among the least loved by their customers. Six Class I railroads — BNSF, Union Pacific, CSX, Norfolk Southern, Canadian National and CPKC — own their tracks, face little direct competition on many routes, and since the Staggers Rail Act of 1980 have been free to set most rates. Rail carries a large share of US long-distance freight ton-miles (roughly a quarter to two-fifths depending on the measure, BTS and AAR; verify the current figure) at a fraction of trucking's fuel and labour per ton-mile. From 2017, precision scheduled railroading (PSR) — Hunter Harrison's operating model, imposed at CSX in March 2017 and copied by most of the industry — drove operating ratios from the high 60s into the high 50s and low 60s: Union Pacific reported 59.8% for 2025 (adjusted 59.3%) on ~$24.5bn of revenue and ~$7.1bn of net income (company, 27 Jan 2026). Customers and regulators argued the cost was service, workforce and safety: the 2021–22 service crisis, the near-strike of 2022 settled by Congress, and Norfolk Southern's East Palestine derailment of 3 Feb 2023. Intermodal — containers and trailers moved by rail between trucks at each end — is rail's growth business and its most cyclical, competing head-on with trucking (04). The industry is now in the middle of its biggest structural change in a generation: CPKC (Canadian Pacific–Kansas City Southern, combined Apr 2023) created the first single-line railroad linking Canada, the US and Mexico, and Union Pacific–Norfolk Southern (announced Jul 2025, ~$85bn reported; STB docket FD 36873) would create the first US coast-to-coast railroad if approved. This section explains Class I economics and pricing power, PSR and its costs, intermodal partnerships, STB regulation and merger rules, the two mergers, East Palestine, rail labour, and Europe's contrasting model.