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December 2025
Compiled by Jeff Stagl, Managing Editor
For Class I CEOs, what’s an honest answer to the question: What kind of a year will 2026 be for your company?
CN President and CEO Tracy Robinson tried to provide one during her presentation Nov. 20 at RailTrends® 2025 in New York City.
“The one thing I’m sure is I don’t know,” she said.
But Robinson expounded on that by stating that 2026 likely will be another year of limited growth. And that forecast calls for being prepared now.
“We need to ensure our investments and resourcing reflect this,” Robinson said.
Ditto for the five other Class I CEOs. They expect to carry out similar strategies amid the ongoing economic, political and regulatory uncertainties. Job No. 1 is continuing to find ways to bring more business to their railroad, while job No. 2 is trying to control what they can control.
“Our focus remains squarely on ensuring momentum on safety and service while executing on our strategy and delivering for our customers. We’ve got a lot to be optimistic about,” Norfolk Southern Railway President and CEO Mark George said Oct. 23 during the Class I’s third-quarter earnings conference. “We’re on a good path, and we’re doing what we can on the controllable side to prepare for growth.”
To dive into the elements of their strategies and the reasons they have at least a tad of optimism about 2026, read the following outlook comments and insights from the six Class I CEOs: BNSF Railway’s Katie Farmer; Canadian Pacific Kansas City’s Keith Creel; CN’s Robinson; CSX’s Steve Angel (who assumed the top post on Sept. 28); NS’ George; and Union Pacific Railroad’s Jim Vena. Robinson’s comments are from CN’s third-quarter earnings conference on Oct. 31 and the other five CEOs provided emailed commentary.
ANGEL: CSX is entering 2026 with operational momentum built over the past several quarters and the completion of major infrastructure projects. The Howard Street Tunnel and Blue Ridge subdivision upgrades (in Baltimore and North Carolina/Tennessee, respectively) have expanded our network’s capacity and resiliency, and we’re excited about the anticipated launch of double-stack clearance through Baltimore in the second quarter. This will open up capacity for new intermodal service offerings into the Northeast, which we expect to be a significant driver of volume growth.
Intermodal remains a bright spot for CSX, with volume growth up a solid 3% over the first nine months of 2025. International intermodal has led the way, but domestic growth is increasingly being fueled by new routes and service offerings. In merchandise, we’ve seen strong demand in our minerals business, driven by aggregates and cement, especially in the Southeast, and improving performance in metals and fertilizers. These areas give us confidence as we move into next year.
At the same time, we’re mindful of ongoing challenges. Chemicals and forest products continue to face pressure from tariffs and market softness, and domestic coal, while showing some positive signs as U.S. power demand is starting to accelerate, remains subject to regulatory uncertainty. The broader environment is marked by challenges across a soft industrial economy, shifting trade policies, weak global commodity prices, unsupportive interest rates and a persistently soft trucking market. All these factors add difficulty to business planning and execution.
We’re hopeful that some of these headwinds, particularly in the trucking sector, may begin to ease in 2026, but we’re not building our plans on that assumption. Instead, our strategy is to focus on what we can control: operational excellence, network reliability and the ability to quickly adapt to changing market conditions. The completion of our infrastructure projects gives us a strong foundation to capitalize on new opportunities, and we’re working closely with our customers and partners to convert more freight from truck to rail.
CREEL: Despite ongoing macroeconomic and trade policy headwinds, we see many growth opportunities ahead in 2026. Our new service offerings, diversified portfolio, strong operational performance and strategic investments continue to deliver results.
Our bulk sector — especially grain — is strong, with a good crop in the United States and Canada. The opening of the Americold facility at our Kansas City intermodal terminal is driving expansion in our refrigerated and transload business, notably cross-border temperature-controlled traffic to and from Mexico. This facility is the first on our unrivaled North America network with more cold storage to come.
Both domestic and international intermodal growth are benefiting from our north-south network, offering customers added supply chain flexibility. Our single-line MMX service between the U.S. Midwest and Mexico continues to grow. We also have a strong pipeline of industrial development projects that will be starting up in 2026.
Another key asset for future growth is the Meridian Speedway. Upgraded infrastructure and our new connection at Myrtlewood (in Alabama) with CSX enables more efficient east-west flows, linking Dallas to Atlanta with truck-competitive transit times. This corridor is well positioned for continued industrial investment. Put that together with our single-line network through Texas and across Mexico, this collaboration that we call SMX opens options for shippers never before possible for both intermodal and carload service.
While risks remain with trade policy changes and a challenging macroeconomic climate, our initiatives position CPKC to continue to outperform the economy and lead the industry.
FARMER: We expect intermodal volumes to be one of our largest long-term drivers of growth, and we’ve made the investments to facilitate that growth as we continue to push to convert trucks to rail. We’re leaning in on leveraging our industry-leading capacity, including the largest intermodal facilities in North America, with the only three capable of processing more than 1 million lifts per year.
We will also continue to utilize our Southern Transcon route, running 2,200 miles between Los Angeles and Chicago that is now almost 100% double-tracked, and in many places triple- and quadruple-tracked. We have seen and heard a wide variety of supply chain strategies from our customers this year. Our goal is to offer solutions. The capacity we’ve invested in allows us to flex up and deliver when our customers need us most.
We know that the best way to grow our merchandise business over time is to provide a better service product. There are numerous opportunities for rail to handle increased carload volume, and we’ve been working diligently to enhance our efficiency, resulting in improved velocity and consistency.
Throughout 2025, we’ve increased our merchandise velocity and reduced our dwell by double-digit percentages, freeing up resources to increase weekly service at almost 600 customer locations — adding 63,000 days of service this year.
Our merchandise operation, while not the largest of our businesses, is arguably the most impactful to the network, and every improvement we make benefits all our customers.
By improving merchandise performance, we’re able to free up key resources like locomotives and crews, and it allows us to create capacity and velocity for all our customers by reducing dwell and increasing terminal fluidity.
GEORGE: The pursuit of growth has been foundational to Norfolk Southern’s strategy for years, and in 2026 we’ll continue to lean into the fundamentals that allow us to capture opportunities — even as we pursue what we believe will be a better solution for our customers: one railroad, one standard and one trusted promise from origin to destination, delivered through a coast-to-coast network created by the merger of Union Pacific and Norfolk Southern.
We see 2026 as a year of opportunity, even if we face a decelerating economic backdrop. Norfolk Southern enters the year and the proposed merger with a strong operational foundation — our network is safer, more reliable and more efficient than ever, thanks to disciplined execution and investments in technology and workforce development. These fundamentals position us to capture growth where demand is strongest — no matter what.
We feel confident about merchandise markets, particularly automotive, chemicals and metals and construction, which continue to benefit from U.S. manufacturing resilience and infrastructure investment. As an example, our recent Louisville initiative will create new intermodal and automotive flows, unlocking attractive growth corridors. Additionally, strong fracking activity in the Marcellus and Utica basins supports demand for natural gas liquids and sand.
On the other hand, export coal remains a concern, given sustained pressure on seaborne pricing and global trade uncertainty. Intermodal will also face headwinds from abundant truck capacity and tariff volatility, although we expect highway conversion opportunities to accelerate as shippers seek cost-effective, sustainable solutions.
Predominantly, growth will be driven by service reliability and network efficiency, enabling us to win share from the highway and deepen relationships with customers. Our PSR 2.0 operating model and quality mindset give us a competitive edge.
And once our merger with Union Pacific is approved, the ability to offer seamless coast-to-coast service will redefine what’s possible for rail shippers — creating new lanes, reducing transit times and unlocking growth for this industry unlike what has previously been attainable.
ROBINSON: As we look to 2026, we see another year of limited volume growth with a weak outlook for North American industrial production and housing starts, and some mixed headwinds given the continued impact of tariffs — on forest products in particular. We’re not accepting the macro reality as our fate. We’re just going to have to work harder to achieve our goals.
We’ve taken significant steps to move CN into a position that is tighter and front-footed to deliver for our shareholders. We’ve taken decisive action and will continue to do so. Our commitment to delivering value for customers and shareholders is steadfast through all economic cycles. Our actions — an increase focused on commercial intensity, operational agility, streamlining costs and realigning capital to reflect current realities — have begun to deliver.
We have launched an intense boots-on-the-ground sales program that is chasing every opportunity, no matter the size. This effort has brought in $35 million in the third quarter and is closing in on $100 million in the fourth quarter, and it’s helping offset weakness in other areas. We know where our capacity is and will be aggressive in selling into it.
VENA: As Union Pacific looks ahead at 2026, there are always macro issues that can affect us. If the U.S. and global economies continue to move ahead, we see opportunities across several areas of our diverse franchise to continue growing our business, including in intermodal and manifest.
We will continue investing to maintain our record-breaking service and support our customers’ growth. Our customers recognize the value benefits of our strong service product, and we are focused on continued business development. When we help our customers grow, we grow.
ANGEL: Other pressing issues on our radar include the regulatory environment and the potential for industry consolidation, which could reshape competitive dynamics. We’re prepared to engage proactively with regulators and industry partners to ensure CSX remains competitive. Internally, we’re committed to building a high-performance culture and developing the talent needed to sustain long-term growth.
We are positioned to pursue growth through strategic investments, operational discipline and a relentless focus on service. We’re ready to meet the challenges of 2026 head-on and believe our network improvements and customer-centric approach will help us deliver value regardless of how external conditions evolve.
CREEL: We prioritize controlling what we can control. We don’t focus on policies and factors beyond our control. CPKC is uniquely positioned to navigate uncertain economic conditions by creating self-help opportunities across our powerful, three-country network. Evolving trade policies, macroeconomic headwinds and talk of industry consolidation all leave the rail and wider transportation industry in a constant state change. Of course that can make planning a challenge across the sector.
Regardless of how all that unfolds, CPKC is going to be sharply focused on safely and efficiently delivering for our customers and on the long-term growth potential of our unrivaled North American rail network.
One approach has been to establish new alliances and create new service offerings for our customers. For instance, CPKC is collaborating with CSX to deliver the Southeast Mexico Express or SMX service. With new investments to enhance this corridor, we are unlocking a new service alterative connecting markets from the U.S. Southeast to Texas to Mexico.
Another example is CPKC’s collaboration with Americold that is expanding rail service offerings by integrating Americold’s cold chain expertise with CPKC’s secure, single-line cross-border network. This collaboration has established a new refrigerated supply chain for customers transporting food and other temperature-sensitive goods throughout Canada, the United States and Mexico.
We’ve been doing this successfully since the first days of CPKC two years ago. Our MMX premium intermodal service continues to grow along our north-south corridor between the Midwest and Mexico.
FARMER: We have invested more than $17 billion in our network over the last five years to focus on future growth, increasing our capacity and efficiency. For 2025 alone, we had a capital plan of $3.8 billion.
I previously mentioned our Southern Transcon track expansion, increasing our capabilities at key locations, after nearly four decades of committed investments in capacity. The result is that we can run faster daily priority intermodal trains between Southern California and key markets to deliver consistent and reliable service to our customers. Now, just like trucks on the highway, traffic runs in both directions simultaneously with multiple passing lanes available.
Over the past 10 years, we’ve invested nearly $10 billion on our Northern Transcon, as well. We’ve added almost 100 miles of double track, 12 new and extended sidings and 1,200 miles of centralized traffic control, greatly improving our capacity, efficiency and safety for freight moving across the northern part of our network.
Our logistics centers and certified sites help leverage capacity on the carload side, providing access to rail-served origins and destinations where customers may not be able to utilize the benefits of rail today. (We currently have four operational logistics centers, four in the pipeline and 38 certified sites across 17 states and 1 Canadian province ready for development.)
Our Shortline Select program, announced one year ago, also demonstrates our commitment to serving our customers. Eight short lines are now part of our shared initiative to provide superior service by expanding opportunities for our customers to an even broader consumer base.
By continuously driving greater efficiencies, we strengthen our competitive edge and unlock reinvestable returns that fuel even more growth. This disciplined approach positions us to thrive in times of economic expansion and remain strong and adaptable during periods of uncertainty.
GEORGE: Uncertainty remains a defining feature of the current environment, whether it’s global trade dynamics, tariff volatility or competitive reactions to industry consolidation. For Norfolk Southern, the biggest challenge is planning for volume swings while maintaining service excellence and cost discipline. Intermodal markets are sensitive to macroeconomic shifts and truck market oversupply, which we expect to persist into early 2026.
We don’t anticipate uncertainty disappearing overnight, but we do expect clarity to improve as supply chains recalibrate and trade policies stabilize. Our approach is to control the controllables: run a safe, efficient network; deliver reliable service; and maintain a sharp focus on productivity. In 2025, we raised our efficiency targets to a cumulative goal of $600 million by 2026, and we’re on track to achieve that through disciplined asset utilization and technology-driven process improvements.
At the same time, we’re preparing for growth by investing in digital tools, operational analytics and customer-centric solutions that enhance resiliency. These steps ensure we can respond quickly to demand shifts and provide the flexibility our customers need.
And when the merger closes, the ability to offer single-line service across a unified coast-to-coast network will give shippers confidence and stability — helping mitigate uncertainty by unlocking new efficiencies and competitive advantages.
ROBINSON: We can rightly point to the challenges of a markedly worse macro environment and the impact of unanticipated shocks from tariffs and labor, which have impacted CN more than other rails. The reality is that lower volumes have prevented us from delivering on the full earnings growth we forecasted. We can do better on guidance, and we will. We’re not alone in facing a challenging growth environment, but it’s important to remember that even with the unique shocks we faced, we’ve delivered.
Over the last three years, revenue and earnings-per-share growth is at or near the high end of our North American peers, and we have consistently delivered top or near-top margins. The macro headwinds have been an industry issue, but our operating ratio has been more resilient than most over this period. That said, I know we can do more.
We’ve set our capital spend in 2026 to $2.8 billion, down nearly $600 million from 2025’s level. This will put our spend at mid-teens from a percentage of revenue standpoint, and we expect it to remain at or about this level going forward. The vast majority of the change in spend is driven by the completion of capacity expansion projects and our locomotive and rail-car fleet upgrades. Both the network and the fleets are now properly sized for this volume environment.
The team also is doubling down on productivity efforts. Adjusting cost structures is critical, especially in a soft macro environment, and we’re pursuing all opportunities across our full workforce and asset base, including taking $75 million out of management labor costs as part of our plan to continue to drive improvement in our operating efficiency. We know there’s more to get here, and we’re after it.
VENA: Our “Safety, Service and Operational Excellence” strategy continues to be our foundation. Railroading will always be full of ups and downs, but at Union Pacific, we expect the unexpected, and address uncertainty by focusing on the things we can control.
We will continue our journey to be the best at safety — it’s the cornerstone of everything we do. We will also continue investing in our service, which has reached record levels of reliability.
Maintaining that strong service product, while always keeping a buffer of key resources, will remain at the heart of how we navigate uncertainty. At Union Pacific, we know what we do is really important, not what we think.
By Chuck Baker
Short lines overall have had a steady year in terms of volume growth. However, there are roughly 600 short lines across the country, and if you know one, you know one.
While short lines are aware of global economic trends and hear all the talk of a freight recession, and their customers are affected by whipsawing trade and tariff policies just like everybody else, the reality for most short lines is that what matters is most often right in front of them.
They focus relentlessly on each customer they have in the small towns and rural areas they serve and are obsessed with helping those customers succeed. The shippers that short lines serve are generally in the energy, agriculture, manufacturing and industrial spaces. These are extraordinarily competitive fields where reliable, competitive and flexible rail service, or the lack thereof, can make the difference between those customers winning or losing.
It was gratifying to hear at our recent regional meetings that Class Is are recognizing short lines as growth engines. All six Class Is have implemented programs focused on leveraging their short-line partners to achieve volume growth, and several noted that their interline short-line carload business has been growing faster than any other part of their business for the last few years.
In two other areas that impact short lines and their potential growth — regulatory policy and congressional action — we are also seeing promising signs. A former short line railroader, David Fink, is leading the Federal Railroad Administration (FRA). Having him at the helm gives us great confidence that the unique nature of our businesses will be carefully considered as the FRA considers regulatory reform. Regulatory policies that are written with small business constraints and rail growth in mind will be a very welcome development.
In the congressional arena, after getting past the nation’s longest government shutdown, we are deeply engaged in conversations in both houses of Congress. We are focused on the development of the Surface Transportation Reauthorization bill, ensuring short lines have what is necessary to continue to drive growth, make significant infrastructure investments, operate safely and maintain connections to America’s heartland.
This includes the hugely popular and successful Consolidated Rail Infrastructure and Safety Improvements (CRISI) grant program, which is the only federally funded program that short lines are directly eligible for. Short lines have used the hundreds of awarded CRISI projects over the past decade to improve safety by upgrading rail and bridges, installing hundreds of thousands of new ties and adopting innovative new technologies. The ASLRRA is focused on ensuring a successful future for CRISI in fiscal-year 2027 and beyond.
H.R. 516 and S.1532 — bills that would modernize the 45G short line tax credit — are rapidly gaining bipartisan co-sponsors. More than a quarter of both the House and Senate members have cosponsored the bills to date and we’re working indefatigably to earn more support.
Finally, the Surface Transportation Board (STB) will likely issue an important policy statement in the near future to provide greater clarity and consistency in Interstate Commerce Commission Termination Act preemption, which would provide greater certainty for capital and operational planning, reduce unnecessary litigation and regulatory costs, and promote investment and growth. The STB will also, of course, need to grapple with the proposed major Class I merger, and we intend to be fully engaged in those deliberations.
As we move into the nation’s 250th birthday celebrations in 2026 and the 200th anniversary of U.S. railroading in 2027, short lines will look to honor our successful past and drive our economy forward, serving customers with the can-do attitude we are known for and connecting America’s shippers to the U.S. economy and beyond.
Chuck Baker is president of the American Short Line and Regional Railroad Association
CREEL: Looking forward, we continue to be well positioned to outperform the industry and the economy because of the strengths of our three-nation network paired with our unique growth initiatives.
Finally, in the area of potential future rail consolidation, we will continue to encourage stakeholders to make their voices heard. Shippers and others in the supply chain are right to be skeptical that merger conditions will be able to fully offset the inherent risks associated with the proposed and unnecessary UP-NS merger. A merger of this magnitude introduces unprecedented risk by heavily concentrating much of the decision-making for our national rail network with undeniable implications on the entire supply chain.
Collaboration among the railroads without mergers in high-density east-west transcontinental traffic lanes can achieve the kinds of benefits UP and NS say they are pursuing by merging. All stakeholders should closely examine the application and other evidence carefully and provide timely feedback on any gaps or competitive concerns.
GEORGE: One of the most transformative developments for Norfolk Southern — and for the entire U.S. freight-rail industry — is the creation of America’s first coast-to-coast railroad through the merger of Union Pacific and Norfolk Southern.
This combination will eliminate the artificial East-West divide that has long constrained rail’s ability to compete effectively with the highway. By integrating two complementary networks, we will deliver true single-line service across 43 states and more than 100 ports, unlocking speed, reliability and consistency that today’s interline model cannot match.
The benefits for rail shippers are profound: optimized national intermodal infrastructure that leverages rail for long-haul efficiency and trucking for local agility; reduced highway congestion by shifting freight from highway to rail, cutting emissions and improving safety; faster transit times and lower logistics costs, thanks to the elimination of interchange delays and variability; expanded market reach, particularly in underserved “watershed” markets along the Mississippi River, where rail has struggled to compete because of interchange complexity; and enhanced supply chain resilience, supporting U.S. manufacturing, reshoring and national defense priorities.
For customers, this merger means one-stop shopping: unified commercial terms, integrated logistics solutions and end-to-end shipment visibility through a single digital platform. It also positions rail to compete head to head with the highway by offering truck-like reliability at rail economics.
In short, this coast-to-coast network will unleash the full power of American freight rail, creating a stronger platform for growth, sustainability and global competitiveness.
ROBINSON: The industry does not need a merger to provide better service to the North American economy. What we need is more cooperation and less regulation. No level of mitigation can offset the reduction of options and the increased cost of service to customers.
That said, we intend to be an active and engaged participant in the UP-NS merger review with a view of protecting our franchise and, more broadly, competition. If the regulator decides to approve the merger, we will, as we always do, entertain all options to create value for our shareholders.
VENA: Union Pacific will continue pursuing our merger with Norfolk Southern. As the Surface Transportation Board reviews our application, we will prove how this combination is good for America, meets the threshold of advancing public interest and enhances competition.
While there have been many oppositional voices, we have more than 1,900 letters of support from stakeholders who understand how we are transforming the industry and helping ensure rail is not left behind.
We know connecting the country from coast to coast, eliminating unnecessary touch points, removing 24 to 48 hours from interchanges and providing rail solutions to underserved areas of the country will advance Union Pacific, our entire industry and the U.S. economy.
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