Union Pacific and Norfolk Southern announced Thursday that they are in talks to merge into a single transcontinental railroad. The announcement came just a week after rumors began to swirl about the possibility of a new round of Class I mergers between the two western roads and the two eastern roads. 

“Union Pacific and Norfolk Southern stated that they do not intend to make additional comments or provide an update on this matter unless and until they determine that disclosure is required or otherwise appropriate,” the railroads stated in a press release. 

Earlier this week, reports surfaced that BNSF was considering a merger with CSX. However, Berkshire Hathaway CEO Warren Buffett later dismissed that rumor. However, observers say that if UP and NS pair up, BNSF and CSX would likely follow. 

The news that UP and NS are considering to start what could be the final round of railroad mergers comes just two years after Canadian Pacific and Kansas City Southern completed what many believed would be the “final” merger. That merger between North America’s smallest Class I railroads was not governed by a stricter set of merger rules drafted in 2001 after the merger mania of the 1990s. However, any future consolidations would need to meet that higher standard to ensure they serve the public interest. At the time of the CP-KCS merger, the U.S. Surface Transportation Board seemed cautious about any further consolidation, especially with Chairman Martin J. Oberman leading. But some believe that Patrick Fuchs, the 37-year-old appointed to the board in 2019 by President Donald Trump who now serves as its chair, might be more open to the idea of additional mergers. 

—Justin Franz