At the April Northeast Association of Rail Shippers (NEARS) Conference, Union Pacific reiterated long-term short line partnerships and interchange choice, likely a key STB focus. Rails and FRA pointed to AI adoption, automation-focused grants, but lamented slower RailPulse adoption. Trucking tightness was noted by several attendees, and we believe we are at the early stages of potential modal shifts. While most merger benefits discussed are well understood at this stage, Norfolk Southern’s speaker also positioned it as a way to materially reduce empty miles, a structural disadvantage for rail compared with trucking. Trucks typically run 5% to 15% empty, while railcars often have near-100% empty return rates, i.e., long repositioning moves. A national intermodal network would allow equipment to be repositioned to the next demand market—such as Chicago, North Jersey, Florida or Mexico—rather than returning empty to legacy terminals, improving asset utilization and lowering system waste. He pointed out that NS was able to notably exceed its targets to pull freight off the highway, albeit taking slightly longer than originally planned. Shippers described extreme volatility in rail demand, with feast-or-famine lumber flows driven by sawmill control and weak trucking pricing up until this year. A forest products shipper said diesel at $6 to $7/gallon and tight truck capacity are constraining shipments and could reignite commodity inflation. A trucker we spoke with at the conference noted his flatbed/bulk division was running strong, with some areas of the country having a 100-1 load-to-truck ratio. Housing demand is down ~20% over three years,…
