Welcome to the new Steel Wheels ‘E’ Magazine. As I noted in the first Steel Wheels ‘E’ magazine, links to specific articles are on the Steel Wheels cover or one can scroll down the pages to each article. There is also a PDF version of Steel Wheels you can print to read on the train. In addition, RailPAC’s new website has several features to keep RailPAC members informed and to provide resources for their advocacy. At the top of the landing page is an index with links to all the sections of the website. There is the Resources section where members will find links to agency Business Plans, performance data, projects, etc. There are maps of projects and their status. Because of the number of links this section is under development so not all links are posted yet. The Commentary section has recent commentary letters RailPAC has sent to agencies regarding proposed projects and policy actions. There is also Newswire where current articles of interest from newspapers, newsfeeds, magazines, etc. are posted.

2025 opened with the anticipation of a battle over the existence of rail passenger service. However, the dismissal of Amtrak CEO Stephen Gardner, a strategically timed reduction in management positions combined with the promise of break-even on an operating basis seemed to keep the budget cutters at bay. 2025 instead turned out to feature record ridership and ticket revenue at Amtrak. That momentum has carried into the Fall, bolstered by airline reliability issues, and changes in equipment utilization that increased capacity. In addition, strong ticket revenue and advanced bookings helped Amtrak more easily manage its cash flow during the record government shutdown.

One of the issues that is going to dominate the rail news in 2026 is the proposed Union Pacific – Norfolk Southern merger. An article in this issue of Steel Wheels outlines potential strategies UP might employ to achieve approval of the merger, the benefits of the merger and the potential negative consequences.

There certainly are a lot of promises, market potential, concerns, and strong arguments on both sides. All these outcomes are very speculative. No one can really foresee the future impact on the rail industry. The overriding view is that this merger represents a key junction for the rail industry, with one path opening up a new pathway forward or an alternative path leading to chaos and ultimately further stagnation and market share loss. If the transcontinental merger is approved and the UP/NS continues to lose market share to trucks, the railroads will no longer have the excuse of not being transcontinental carriers.

Industry observers have all variations of what is going to happen but there is no definitive argument that offers a high probability of being correct. While the assumption is that the reaction to the UP/NS merger will be BNSF/CSX, that is not a given. Could all the remaining railroads band together in long-lasting partnerships to face the common enemy? Other rail companies might be just biding their time to see whether the merger is approved and the conditions attached to it.

Some unknowns. Will the STB impose so many conditions on the merger that UP will walk away from it? Given the importance of trade with Canada and Mexico does a CPKCS/CSX merger (with UP/NS merger trackage rights concessions) and a CN/BNSF merger (with UP/NS merger trackage rights concessions) create a superior rail network compared to a BNSF/CSX option? Will a mega-merger service meltdown lead to nationalization or will the public finally give up on rail technology?

Since the merger process is just beginning there will be many developments. However, I will be able to keep members abreast of new developments in the Commentary section of the website.

Also inside, Brian Yanity, RailPAC Vice-President South, the outlines background and current status of the transformational project in Southern California, Los Angeles Union Station run-through tracks – LINKUS.

One of the new regular features of the Steel Wheels ‘E’ Magazine is the sharing of articles with Rail Users Network (RUN). In this issue an overview of Congestion Pricing in Manhattan is featured. For seventy plus years, Caltrans highway Districts and highway departments in other states have tried to address traffic congestion by adding lanes, but Level of Service (average vehicle speeds) remained unchanged. New York City and other cities worldwide have changed that strategy by applying the basic economics of using price to manage the demand of a scarce resource (road capacity). As a result, New York City achieved a dramatic increase in Level of Service (faster travel times) by allowing drivers to choose value of that scarce road space. At this point, all the forecasted goals of the program have been achieved.

Predictions of traffic congestion outside the congestion management area by drivers avoiding the toll did not prove correct. There were also predictions of a loss of business in the management area. As is noted in the article, the opposite occurred.

Finally, as in other cities worldwide, opposition to the pricing plan was substantial before implementation but reversed once drivers saw the dramatic improvement in traffic flow and improved transit bus travel times and reliability. Could this be a lesson for California’s urban areas?

Finally on the lighter side, there is the first part of the story of Orange County stations and their importance to the communities.

In closing, wishing everyone Happy Holidays and a productive 2026!