Key facts
- Union Pacific collected $131.8 million more in fuel surcharges than it paid for fuel in the third quarter, adding 15 cents per share to earnings.
- From January through September, Union Pacific collected $2.81 billion in fuel surcharges, outpacing fuel costs by $188.1 million, per STB filings.
- BNSF's surcharge collections lagged fuel costs by $922.4 million in the first three quarters of 2026, according to STB filings.
- Union Pacific's November 2026 fuel surcharge is 84 cents per mile versus 61 cents for BNSF, per USDA analysis.
- Union Pacific begins recovering fuel costs via surcharges at $2.30 per gallon; BNSF waits until the price tops $3.25, USDA analysis showed.
- CSX had the largest excess quarterly surcharge collection among CSX and Norfolk Southern at $61.4 million in the third quarter.
Union Pacific collected $131.8 million more in fuel surcharges than it paid for fuel in the third quarter of 2026, adding 15 cents per share to earnings, according to filings with the Surface Transportation Board and financial disclosures. The Omaha-based railroad had collected $91.1 million in excess surcharges in the prior quarter, adding 14 cents per share.
From January through September, Union Pacific collected $2.81 billion in levies meant to cover fuel price increases, outpacing its fuel costs by $188.1 million, the STB filings showed. The company said in a statement that fuel surcharge revenues across the rail industry increased substantially due to high fuel prices and that its year-over-year percentage increase is in line with the industry.
BNSF, owned by Berkshire Hathaway, saw its surcharge collections lag fuel costs by $922.4 million during the first three quarters of 2026, according to STB filings. CSX and Norfolk Southern also reported quarterly surcharge surpluses this year; CSX had the largest excess quarterly collection at $61.4 million in the third quarter. Executives at those railroads said the revenues blunted rising fuel costs in their second and third quarters but did not disclose the impact on profits.
The gap between Union Pacific and BNSF surcharge rates is partly explained by how they apply them, according to the US Department of Agriculture. Union Pacific begins recovering fuel costs via surcharges when prices hit $2.30 per gallon, while BNSF waits until the fuel price tops $3.25, USDA analysis showed. Union Pacific's November 2026 fuel surcharge is 84 cents per mile, versus 61 cents for BNSF, according to that analysis. Union Pacific did not immediately comment on the USDA analysis.
The excess surcharges are being imposed as Union Pacific and BNSF battle over Union Pacific's proposed $85 billion acquisition of Norfolk Southern, which would create the first US continental railroad operation. The STB is weighing the purchase, and a decision is believed to be months away. BNSF says the merger would undermine competition and has opposed Union Pacific's attempts to subpoena testimony from investor Warren Buffett, the 96-year-old chairman emeritus of Berkshire. Union Pacific is seeking more information about a meeting Buffett and Berkshire CEO Greg Abel had with the CEO of CSX in August, regulatory disclosures show.
Ann Warner, a spokesperson for the Freight Rail Customer Alliance, said fuel surcharges are a broadly accepted tool for transportation companies to cover unexpected fuel price increases, but utility company members that are captive to one railroad for coal deliveries raise concerns when surcharges become excessive and turn into a revenue generator exercise rather than a cost recoup. FRCA is a member of the Stop the Rail Merger Coalition opposing the potential Union Pacific-Norfolk Southern combination. "The proposed merger puts so much scrutiny on what UP is doing or not doing," Warner said. "You don't want to overreact too much to it, but at the same time, something's not right."
Earlier this year, Union Pacific CEO Jim Vena stirred controversy by saying at a conference that the railroad would increase rates on merger opponents by 3-4% "to teach you a lesson." The company has previously called Vena's comments a joke.