North American rail traffic rose 4.9% year over year in week 32, according to the Association of American Railroads' weekly traffic update, with a surge in Canadian volume cutting across both carload and intermodal segments. Carload volume across North America was up 4.7% for the week, while intermodal traffic climbed 5.1%. The figures come from the AAR's weekly report, which tracks carload and intermodal volumes across the continent's major freight railroads and serves as one of the most closely watched high-frequency gauges of freight demand — intermodal boxes largely carry consumer merchandise, while carload traffic moves bulk industrial and agricultural goods.

Canada was the primary driver of the headline number, posting strong gains in both carload and intermodal freight — a combination that has been rare in recent reporting periods. CPKC — the railroad formed by Canadian Pacific's 2023 acquisition of Kansas City Southern, which created the first single-line network linking Canada, the U.S. and Mexico — was cited as a key contributor to that growth. Grain also played a significant role in the weekly results, as the end of one crop year and the start of a new one, following a bumper Canadian harvest, boosted shipments.

In the United States, Class I railroads posted more modest but still positive results. Carload volume was up 1% for the week, intermodal rose 2.7%, and total U.S. rail volume came in 2% above the same week in 2025. Eight of the 10 commodity groups tracked by the AAR finished the week in positive territory.

Among the three largest carload commodity groups, grain was the standout at plus 3.4%. Chemicals were essentially flat, up 0.4%, while coal continued its structural decline, falling 5.5% year over year — a slide that has tracked the utility sector's long-running shift from coal-fired generation toward natural gas and renewables. The sharpest negative reading of the week came from motor vehicles and parts, which dropped 13% — though the cause remains unclear, with affordability pressures, loan costs, and automaker incentive strategies all cited as possible factors behind the decline.

"Carload volume in North America was up 4.7% compared to a year ago. Intermodal volume was up 5.1%. That gives us a total for North America of an increase year over year of 4.9% for week 32."

STB Adopts Formal Review Schedule for UP-NS Merger

On the merger front, the Surface Transportation Board adopted a formal review schedule for the proposed Union Pacific-Norfolk Southern combination, pushing a final decision well into the second half of 2027. The deal, announced in July 2025 and valued at roughly $85 billion, would combine UP's western network with NS's eastern lines to create the first single-line transcontinental railroad in the United States — the biggest proposed combination since the industry's consolidation wave of the 1990s. Final briefs in the case are due May 28, 2027, though the board has not yet set a date for the close of the record — a significant detail, since a decision must come within 90 days of that close.

The review falls under merger rules the STB adopted in 2001, after the service problems that followed the last big round of consolidation, which require major rail deals to demonstrate they enhance competition rather than merely preserve it. The board's latest order also directed UP and NS to produce all underlying data behind the market share and traffic projections in their supplemental filing. The directive came after the railroads' work papers indicated that some data had not been included because it was deemed irrelevant.

"It's basically a trust but verify outlook at the board," said Bill Stephens.

Broad Opposition, but Coalition-Building Continues

Opposition to the merger remains broad. BNSF, CSX, CPKC and shipper groups have all asked the STB to reject the application since UP and NS filed their supplemental materials on July 27. CN, which initially opposed the deal, withdrew its opposition after reaching a separate access agreement with Union Pacific — an echo of the 1990s, when approval of Union Pacific's takeover of Southern Pacific came with conditions granting rival Burlington Northern access to key routes.

Nissan was noted as one large shipper that has publicly supported the merger, illustrating the ongoing effort by the merging railroads to build a coalition of customer and carrier backing ahead of any final ruling.

Source: FreightWaves