Railroads urged to refocus on growth, reliability, and responsiveness to win back market share
Summary
At the RailTrends conference Adriene Bailey of Oliver Wyman laid out findings from the firm’s updated 2025 North American Class I Freight Rail Performance report. The talk zeroed in on the proposed Union Pacific–Norfolk Southern merger, modal share trends and why rail must put growth, service reliability and customer responsiveness at the top of its agenda to reclaim freight volumes lost to truck.
Bailey highlights that single-line service boosts rail share, that many shippers still prefer rail or are neutral, and that the rail industry’s long-term value creation hinges on attracting growth by satisfying shippers’ core needs: faster responsiveness, closer commercial relationships, consistent transit reliability and more flexible, market-aware pricing.
Key Points
- UP‑NS merger framed as a watershed moment — a single line could handle ~40% of U.S. rail traffic and connect ~50,000 route miles, but shippers are cautious about single-line benefits.
- Oliver Wyman survey: many carload shippers prefer rail (≈50%) or are neutral, while intermodal preferences are more evenly split between rail and truck.
- Rail has ceded share to trucking despite generally lower rail costs; the reason is service experience (responsiveness, equipment availability, on-time reliability) and pricing dynamics in some lanes.
- Price remains the top factor for mode choice, but shipment management/on-time reliability is nearly as important; consistency often matters more than raw speed.
- Shippers shifting to truck cite responsiveness and equipment availability; customer experience issues for carload shippers can outweigh price concerns.
- Four areas rail must improve to win back volume: be more responsive; build closer commercial relationships; deliver reliable, predictable transit times; and offer more responsive, flexible pricing.
- Improving these service dimensions is presented not just as operational work but as the route to sustainable growth and shareholder value creation.
Content summary
Oliver Wyman’s research — based on interviews with senior shipper decision-makers — shows an appetite among shippers to use more rail, but persistent frustrations are driving a modal shift to truck in many corridors. Bailey pointed out that single-line service increases rail share where it exists, yet scepticism remains among some industry groups about consolidation benefits.
Shippers rank price as the top influence on mode choice, followed by shipment management and on-time reliability; transit time is important but secondary. Current market quirks (for example, lower truck rates in some lanes due to a surplus of owner‑operators) also make truck more attractive despite rail’s inherent cost advantages.
Bailey’s prescription is clear: railroads must focus on growth by fixing the customer experience — improving responsiveness, equipment availability, predictable transit times and pricing flexibility — to convert service gains into regained market share.
Context and relevance
This analysis arrives amid major industry change: a proposed coast‑to‑coast merger, ongoing competition with truck, and a broader drive for operational modernisation across logistics. For shippers, carriers and investors, the piece crystallises why service quality and commercial agility are as important as network scale in determining modal choice and long‑term rail growth.
For transport planners and logistics managers the findings reinforce current trends: investment and M&A reshape network options, but day‑to‑day service and pricing remain decisive for mode selection. Addressing these operational pain points is the practical lever for rail to recapture volume.
Why should I read this?
Quick and blunt: if you care about where freight goes and why — this spells out why rail has been losing ground and what actually needs fixing. It’s not just about more track or mergers; it’s about being quick to respond, consistent on time, and sensible on pricing. We’ve done the digging so you don’t have to — actionable takeaways for shippers, carriers and supply‑chain strategists.
