🎣 Pay Attention

We sat down with Rob Liss, Vice President at MAKA Logistics, the largest independent agency of Armstrong Transport Group, to talk intermodal, rail consolidation, and why freight brokers should pay attention to the UP-NS merger.

The Deal That Could Take Freight Off the Highway

Once Upon a Time ... in The United States

The average railroad merger probably isn't keeping freight brokers up at night—but this one probably should be. The UP-NS merger isn't just another deal -it could be the next major shift in logistics.

There was a time when America had 134 major railroads. Today, only six Class I carriers remain.

“Before deregulation, in the 70s and 80s, there was a series of bankruptcies on the East Coast railroads. There are a number of reasons for that. The government had to come in and nationalize the railroads, and that eventually was split off- half became Norfolk Southern, and half became the CSX.”

Now, Rob says, the proposed Union Pacific–Norfolk Southern merger could reduce that number even further and potentially create a railroad giant controlling nearly half of the market.

But getting a Class I merger approved is far from easy:

There are two core requirements.

1. Does it serve the public interest?
2. Does it enhance competition?

If you’re a broker, the second point is where you should pay attention.

Why Should It Matter?

One of the strongest arguments behind the UP–NS merger is that a single coast-to-coast network would create rail lanes that never made sense.

You're probably asking yourself, 'What does that have to do with me?' Well, every lane that moves efficiently by rail is a lane that trucking could lose...

“They really need to look at this UP-NS merger and understand where that enhanced competition is going to come from… one of the things that was in that 8000-page application was about all the trucks they were going to take off the road because they’re going to put together lanes that historically are not rail over the Mississippi watershed.”

For brokers, that means one thing: competition is intensifying. And it could come after your freight.

If the merger succeeds, railroads will need to prove they can reduce transportation costs, add capacity, open new lanes, and provide better service.

But those won’t appear out of thin air.

They will come at the expense of trucking companies and freight brokers. That could mean you.

The Risk of Building a Giant 

Rob points to another major risk.

“The integrations. If you have an issue where their IT system goes down, and you have this behemoth that’s 50% of the market, that’s now at a standstill, that really hurts people who are trying to get places.”

A major IT outage or cyberattack affecting a company controlling a significant market share could have enormous consequences across the supply chain. 

The Trucking Reality: Automation Is Coming 

There’s another factor shaping the long-term battle between rail and truck: automation. 

The trucking industry is already facing an aging driver workforce. On top of that, autonomous technology continues to advance. Combine the two, and the future may look very different from what it does today.

“Things are changing really quickly with automation in ways that people are not going to anticipate, but at the end of the day, everything that you’re trying to accomplish with a driverless truck your basically already accomplishing with intermodal.”

The Most Overlooked Advantage of Intermodal: Security 

When brokers think of intermodal, they often think of slower transit times and less flexibility. 

But they overlook one of its biggest advantages: fraud prevention.

“If you had a load stolen, in the last year, or you had a carrier misrepresent themselves, I guarantee you it was not done with an intermodal carrier… It’s a lot more predictable, it’s a lot more regulated. You’re not going to have bad actors in there. They’re not going to put bad freight on the train. It puts everybody at risk.”

In a freight market increasingly defined by fraud and double brokering, stability matters more than ever.

The Bottom Line

After being rewritten and resubmitted in April, the merger application was rejected again last month. This time, the issue was additional missing required information. The final ruling: submit the additional documentation by July 27, or the process will not move forward.

🎣 The Opposition Is Celebrating

The UP-NS pitch to regulators is that the combined network would pull 2.1 million truckloads off highways annually. Plus: USPS signs a $10B+ deal with DHL, 20+ carriers go under in May, and Hub Group’s CFO and COO are out.

FreightCaviarThe Caviar Desk

Whether the UP–NS merger gets approved or not, the message to brokers is clear:

Do not ignore intermodal. Follow it because the next major competitor taking your freight may not be another broker; it may be a train.

Rob will also have a feature story in Issue 3 on autonomous trucking and rail predictions in Issue 003 of FreightCaviar Print, which is almost here .

Watch it on YouTube now, or listen to the full episode on Spotify and Apple Podcasts.

Presented by TextLocate

TextLocate’s DriverProtect ensures your drivers are exactly who they say they are.

Backed by Driver Pulse’s secure data controls, DriverProtect keeps drivers in charge of their information, protecting their identity while giving brokers confidence in who’s moving their loads.

Fight freight fraud by trying DriverProtect today and share your feedback with us.

Carrier of the Week (Presented by SearchCarriers.com)

CND Trucking Inc

• MC: 411404
• Location: Jacksonville, FL
• Equipment: Dry van, Reefer
• Phone Number: (904) 695 1045

Freight Humor