Surface Transportation 2026 Annual Review & Outlook
Executive Commentary |
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ABH Consulting
Anthony Hatch
Principal www. abhatchconsulting. com
Next year will be a loud, eventful year for the North American freight rail industry, but I predict that the following year, 2027, will be the defining one. That is because the proposed Union
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Pacific-Norfolk Southern merger, which could transform the industry, won’ t be decided until then. Yes, the merger partners are rushing to get their application into the Surface Transportation Board as early as the time of writing( November 2025), and theoretically, while the 390-day review deadline could be expedited( as the dealmakers request), given the magnitude of this deal and its follow-on implications, I expect the decision, and therefore its ramifications, to be a 2027 event. As a good friend who should know says,“ Bet the over!”
There will be lots of noise, press releases, speeches, etc. in the interim,
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“ In the meantime, the freight rail group, some 50 % tradeweighted, will still be subject to the political whims of the White House and industrial inactivity.”
Anthony Hatch
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of course— this stuff gets personal. Is this deal going to pass? What will the deal be that is approved, if so? What are the remedies involved? What will the other carriers then do, if anything? Will shippers take a stand? Will the stakeholders choose between oppose, support and / or extort? Stay tuned …
And in the meantime, the freight rail group, some 50 % trade-weighted, will still be subject to the political whims of the White House and industrial inactivity created by lack of any supply chain / tariff clarity, not to mention the continuing freight recession( trucking oversupply). But buckle up, it’ s going to be a loud, crazy year! Then the real work will begin …
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Association of American Railroads
Ian Jefferies
President and CEO www. aar. org
While many point to an overall freight slowdown, the reality is that freight rail traffic in 2025 has performed admirably, including as compared over the decades. Railroads have repeatedly weathered economic downturns by focusing on fundamentals: investment, innovation and maintaining a long-term view. Railroads will navigate current headwinds as well and will support lasting competitive policies that support their role in the supply chain.
Freight railroads privately own, operate and maintain their infrastructure. This self-sustaining model— supported by partial economic deregulation— creates market conditions that drive reinvestment in safety, technology and capacity, averaging $ 23 billion annually and totaling $ 26.8 billion in 2023. Through continuous investment in infrastructure, technology, workforce training and emergency preparedness, freight railroads have reduced the Class I mainline accident rate by 43 % since 2005.
To sustain this progress, policymakers must uphold the principles that foster private investment: balance, consistency and flexibility. For instance, greater enforcement of federal preemption— supported by customers— prevents a patchwork of conflicting state and local regulations and supports industrial growth.
Federal safety regulators can also help by pursuing performance-based standards that define clear outcomes while allowing flexibility in how they are achieved. This approach encourages new solutions and ensures oversight evolves alongside technology, which is critical for a legacy industry operating under regulations that, in some cases, are more than 50 years old.
Modern, mode-neutral permitting and regulatory frameworks are also essential to advancing infrastructure investment and technology deployment. Aligning policies and streamlining approvals across modes would promote fair competition, strengthen supply chains and put dollars for infrastructure projects to work more quickly.
The 2026 surface transportation bill presents an opportunity to advance these and other forward-looking priorities. With smart policies, freight rail will continue powering US commerce and supporting sustainable growth.
“ Policymakers must uphold the principles that foster private investment: balance, consistency and flexibility.”
Ian Jefferies
“ The freight market has been stuck in neutral, and everyone is feeling the pain, from independent truckers and family businesses to large fleets.”
Chris Spear
American Trucking Associations
Chris Spear
President & CEO www. trucking. org
Americans’ way of life depends on trucking, the mode of transportation responsible for delivering three-quarters of the nation’ s freight. We are the engine that powers America’ s economy. But recently, the freight market has been stuck in neutral, and everyone is feeling the pain, from independent truckers and family businesses to large fleets.
Against this backdrop, discussions over a major rail consolidation are sparking speculation that it could pose another challenge to trucking. It’ s worth noting, however, that trucking and rail compete directly on less than 10 % of US freight. Rail excels at moving bulk commodities like coal. But when precision, speed and reliability matter, rail falls short. Trains don’ t deliver to hospitals, grocery stores, schools, or homes. Trucks do.
Of greater concern to trucking is the threat posed by trial attorneys, cargo criminals and radical environmentalists. They are in large part responsible for pushing motor carriers’ non-fuel operating costs to a record high at a time of lackluster freight demand. Fortunately, hope is on the horizon. The American Trucking Associations
72 Journal of Commerce | January 5, 2026 www. joc. com