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PwC leaders break down what’s next in freight rail as shifting trade patterns, rising customer expectations, and a potentially historic merger could reshape how the industry moves goods.
Freight rail runs on consistency. But this year, industry conversations focused on changes related to trade routes, customer expectations, the proposed merger of Union Pacific and Norfolk Southern, and what it means to be operationally ready in a more digital world. Those themes were all on display at RailTrends 2025, the annual summit for freight rail leaders.
Here, PwC's Rajeet Mohan, a principal in transportation and technology strategy with PwC US, and Michael English, a principal in transportation and logistics with PwC Canada, discuss their takeaways from the conference, and the rail industry's larger challenges around transformation and customer experience.
Q: What were your biggest takeaways from RailTrends 2025?
Rajeet Mohan: The conversation was definitely dominated by the proposed merger of Union Pacific and Norfolk Southern, which would create the first transcontinental railway and how that could impact industry stakeholders. It was also clear that many stakeholders are divided on the idea of this transaction going through.
Michael English: Yes, the proposed merger dominated many discussions. But there was also recognition that the industry should innovate a lot more to stay relevant in the decades to come.
Q: What are some ripple effects of the planned merger?
Mohan: When a merger happens, it's like moving houses. You can take some time to rationalize what you need, what you don’t need, and expedite tech-debt clean up. Similarly, the CIOs of the merging companies—and the ones who could be affected by the deal—have a rare, perhaps once-in a-generation, opportunity to fundamentally rethink how they enable and invest in future technology foundations such as integrated data and modern infrastructure capable of enabling innovation. Why not try to make the most of this moment and future-proof yourself for the next 15 to 20 years?
English: Trade flows are changing no matter what, and then UPNS is a change on top of a change, all of which creates new and different opportunities and risks. One of the key opportunities, I believe, could be better traceability. Currently, the industry still lacks a critical service fluidity—as it relates to efficiency, traceability, and customer service—when crossing multiple networks. It's a much broader issue, but in the context of UPNS, now there's full east-to-west-coast integrations with greater visibility. That could help reduce the switching times between networks and create better visibility end-to-end, meaning better customer experience. The downside is that those customers are more captive to one rail company, so there could be less negotiation on price.
“When a merger happens, it’s like moving houses. You can take some time to rationalize what you need, what you don’t need, and expedite tech-debt clean up.”
Rajeet Mohan,Principal, Transportation & Technology Strategy, PwC USQ: How is technology reshaping the rail industry?
Mohan: I think predictive capabilities are an area of opportunity that rail companies will continue to explore. Today, a railcar could be passing through the middle of the Mojave desert, and there are cameras on the rail tracks taking pictures of, say, the ball bearings and the wheels. The software that’s analyzing those images can tell you if a wheel has a crack or a hairline fracture and predict how long until failure, so you can go repair it before a catastrophic incident happens. But rail is still behind when it comes to shipment tracking capabilities, for example. When you want to ship a container on a railcar, they’ll tell you it’ll take plus or minus one day to get there. When you’re using trucks or cars, they can tell you a package will reach you at 3pm tomorrow, and you can track it. If executed well, I think AI-enabled technologies now offer the potential for industry participants to get ahead of its trucking competitors.
Q: What are the risks for rail if the industry fails to transform quickly enough?
English: Building on what Rajeet said about tracking and visibility, the biggest competitive threat to rail is trucking. It’s faster, more integrated—and it delivers a better customer experience. When you ship something by truck, you can follow the vehicle in real time, the same way you track a pizza delivery on your phone. So that level of visibility has become our baseline expectation.
We’ve long thought of technology as a service, as something that supports logistics. But today, the biggest competitors in logistics are technology companies. That’s how we’ve ended up with gig workers delivering packages in personal vehicles. The companies orchestrating those deliveries aren’t logistics firms. They’re tech platforms. And if you think about it, the parcel industry has already been transformed by tech. Taxis too. But rail? Rail is the only part of the surface logistics network that hasn’t been completely reinvented yet.
“Rail is the only part of the surface logistics network that hasn’t been completely reinvented yet.”
Michael English,Principal, Transportation & Logistics, PwC CanadaQ: Why does visibility continue to be such an issue for the industry?
English: A key challenge is that you can’t put a tracking device on an asset you don’t own, and the people who own the containers don’t see an incentive to track, because for now they’re able to rent out the container without it. If industry leaders realized how big a threat trucking is, they might make changes tomorrow. But as of now, rail has significant value in its real estate, and sometimes profits can mask future threats. Still, over time, I think relationships with customers will matter most, and it's important for industry leaders to consider that reality since customer preferences always evolve.
Visibility, which could be improved through better tracking, is a big part of the industry’s lagging customer experience, but it’s not everything. The rail industry also charges a high premium on less than truckload (LTL) shipments, for example. With the advanced technology that’s accessible now, perhaps movements could be more efficiently consolidated, so customers would have more reason to choose rail even for smaller shipments.
Q: How should rail companies approach workforce transformation amid aging talent and increasing automation?
Mohan: For hundreds of years, the rail industry was built on an apprenticeship model—one generation passing the baton to the other. But as people retire and things become more automated, like in other industries, the next generation should focus on learning about technology and process innovation. For example, as the time to future horizons become shorter, humanoid robots could emerge and become a perfect replacement for the jobs of the future at the edges of the network and in the middle of the desert. But the question then is, who will train them? Companies should start absorbing the data, putting cameras on top of helmets of welders and trained technicians, and feeding the video into a central place for training. Afterall, AI-enabled outcomes are as valuable as the clean and integrated “data fuel” available for training and inference.
Q: What’s one final message you’d want to share with industry leaders?
Mohan: The opportunity ahead is bigger than a single merger. Whether this deal goes through or not, rail is standing at a critical inflection point. CIOs and operational leaders have a narrow window to modernize—not just incrementally, but meaningfully—in ways that set the foundation for decades.
English: Agreed. Customer experience is changing because expectations are changing. The question isn’t whether rail can move goods—it’s whether it can deliver the visibility, responsiveness, and integration customers have come to expect. The time to build for that future is now.
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