Weathering 2026 — After a turbulent 2025, rail industry leaders hope for fewer headwinds in the year ahead

By Jeff Stagl, Managing Editor

It’s rare when almost everyone in the rail industry agrees on something. Yet, many industry constituents have the same response when asked about how 2025 is turning out: “It’s been a tough year.”

Indeed it has. From a polarizing U.S. president who took office in January to his trade-inhibiting tariffs to a volatile economy to a 47-day federal government shutdown to constrained manufacturing to confusing regulatory and legislative moves to an unexpected proposal of a major Class I merger, the reasons for the difficult year are many.

Unfortunately, the early take on 2026 is: Expect another trying year. While dealing with ongoing uncertainty about the economy, tariffs, world peace, supply-chain conditions and the proposed Union Pacific Railroad-Norfolk Southern Railway merger, rail industry members and stakeholders will need to grapple with some highly impactful issues in 2026.

Among them: the next surface transportation reauthorization bill to succeed the Infrastructure Investments and Jobs Act that expires on Sept. 30; a renewal or extension of the United States-Mexico-Canada Agreement (or USMCA) that is set to expire on July 1; the continuation or modernization of federal grant and tax credit programs that are vital to rail projects; and the prevention of federal regulations that could allow bigger trucks on highways or standardize train crews.

There likely will be some growth next year, many Class I and transit-rail leaders believe. But the negative effects from doings in 2025 and anticipated impacts from upcoming developments already have prompted some of them to make difficult decisions.

For example, CN plans to reduce capital expenditures by C$600 million next year compared with its 2025 capex budget, and TriMet recently eliminated 68 staff positions as part of a $17.7 million cost reduction plan to address an ongoing structural budget deficit.

As CN President and CEO Tracy Robinson put it on Nov. 20 during Progressive Railroading’s RailTrends® conference in New York City: “We hope the economy rebounds, but we are not seeing any signs of that. There is no single magic lever here. You have to tighten the cost base and chase every dollar.”

For TriMet General Manager Sam Desue Jr., layoffs are always a last resort, but the agency’s financial realities made them unavoidable.

“These administrative cuts are part of a broader recovery plan to stabilize [our] finances and ensure long-term sustainability so we can continue providing the public transit service our region needs for decades to come,” Desue said in a press release.

Meanwhile, railroad contractors are hoping for some growth in both the freight- and passenger-rail sectors. The tea leaves show there might be more than hope in that regard despite all the headwinds this year.

“The trends and challenges that shaped 2025 will continue to influence the industry into the new year, and several areas show clear potential for growth,” said Curtis Bilow, executive vice president of Ames Construction, in his emailed comments.

In three Outlook 2026 sections posted online, 18 leaders in the Class I, transit and railroad contracting sectors share comments that help gauge the level of growth and other things that likely are in store for next year.