Record fuel prices are pushing freight off U.S. highways and onto trains, helping railroad companies record higher revenue and profits as shippers look for cheaper ways to move goods long distances, Reuters reported on Thursday, October 22. Union Pacific, Norfolk Southern and CSX all reported a jump in third-quarter profit and revenue this week, with executives saying high fuel costs and fewer available trucks were sending more business their way.
Source: Reuters via WNFL — US railroads pull ahead as high fuel costs hit truckers harder, Oct. 22, 2026
“Railroads are much more efficient. It costs us way less per ton to move products across the US. So when fuel prices go up, it's naturally an advantage,” Union Pacific CEO Jim Vena told investors on a post-earnings call on Thursday, Reuters reported. Diesel, a key cost for freight carriers, reached a record $6.53 a gallon in September, according to AAA data cited by Reuters — that is about $6.53 for roughly 3.8 litres, the price pressure truckers have been paying at the pump all autumn.
Source: Reuters via WNFL — US railroads pull ahead as high fuel costs hit truckers harder, Oct. 22, 2026
The gains are showing up most clearly in intermodal shipments, where freight moves by rail for the long-haul portion and trucks handle pickup and final delivery, Reuters said. “We are seeing long-haul truckload shift to intermodal and increased use of transload and rail-served distribution centers,” said James Mourafetis, head of transportation, logistics and services at consulting firm EFESO. Shrinking trucking capacity is also moving freight onto rail: a prolonged freight downturn has forced smaller carriers out of the market, and high operating costs and stricter driver enforcement are limiting trucking capacity's return, Reuters reported.
Source: Reuters via WNFL — US railroads pull ahead as high fuel costs hit truckers harder, Oct. 22, 2026
In its own third-quarter report, also covered by Reuters on Thursday, Union Pacific beat Wall Street estimates: adjusted profit was $3.53 per share against analysts' estimates of $3.47 compiled by LSEG, and total operating revenue for the quarter ended September 30 was $7.2 billion, up 15% from $6.24 billion a year earlier (yaani about $7,200 million in revenue for three months). Freight revenue excluding fuel surcharges rose 6%. Higher fuel costs hurt Union Pacific's operating ratio by 140 basis points, although the ratio still improved 10 basis points to 59.1%, and its shares rose about 2% in early trading.
Union Pacific, based in Omaha, Nebraska, is also chasing an $85 billion deal for Norfolk Southern, which would create the first coast-to-coast freight railroad in the United States, Reuters noted (yaani $85 billion — about $8,500 crore). For Punjabi owner-operators and fleet drivers, the rail shift does not remove trucks from the chain — intermodal freight still needs trucks at both ends — but it takes away the longest, best-paying highway miles first, which is where diesel at record prices hurts carriers most.
What is solid
- Union Pacific, Norfolk Southern and CSX all reported higher Q3 profit and revenue this week, and executives linked part of the gain to freight shifting from trucks as fuel costs rose — Reuters, Oct. 22.
- Union Pacific's Q3 adjusted EPS was $3.53 vs $3.47 estimated, operating revenue $7.2 billion, up 15% year on year — Reuters, Oct. 22.
- Diesel reached a record $6.53 a gallon in September, according to AAA data cited by Reuters.
What is only claimed
- How much of the railroads' gain comes from the fuel-driven shift versus pricing and their own efficiency is not separated in the reports; the companies also say high fuel raises their own costs and squeezes their margins.