Schneider Dumps CSX for Norfolk Southern in Eastern Intermodal

Schneider National is moving all of its eastern intermodal business from CSX to Norfolk Southern, ending a long-standing rail partnership and making NS its exclusive eastern rail provider alongside Union Pacific in the West.

The deal landed the same day Schneider reported third-quarter earnings, and both companies frame it as a growth play, not a break-glass move. Norfolk Southern now holds the eastern leg of a two-railroad national intermodal network for one of the largest asset-based intermodal marketers in North America.

Michael Baumgardt, Schneider's EVP of Intermodal and Logistics, said the decision followed a lengthy evaluation of network reach, train frequency, and proximity to population centers.

"It starts with growth and it's really about, okay, how can we get closer to our customers? How can we make sure that we get more truck freight off of the road and into intermodal where it makes sense?" Baumgardt said.

Customer response in the first 24 hours after the announcement was positive, he added, with particular interest in Schneider's asset-based model — company drivers, company chassis, and company containers.

Why Norfolk Southern won the business

Shawn Tureman, Norfolk Southern's vice president, said the railroad has been building toward this moment for years. NS grew from the third- to the second-largest intermodal franchise in the United States by 2018. In 2022, at its Investor Day, it set a target to double the franchise again and has been directing discretionary capital toward that goal ever since.

"It's not a question of if, but when. And the way we're going to get there is by partnering with powerful partners like Schneider," Tureman said.

The rate environment adds commercial urgency. Truckload rates currently carry a 30%-plus premium over intermodal rates, widening the spread that convinces shippers to shift boxes from road to rail.

Baumgardt was blunt about where the real capacity constraint sits. It's not equipment — boxes are available. The bottleneck is dray capacity and driver supply, and he argued Schneider's company-driver model gives it a structural advantage in managing precisely that chokepoint.

What about the NS-CSX merger?

The pending Norfolk Southern-CSX merger — a topic that surfaces weekly in industry conversations — was not the driver of this agreement, both executives insisted. They did concede the merger could improve the product if it closes.

"The merger would be icing on the cake in terms of enhancing service, reliability, and speed," Baumgardt said.

Tureman pointed to single-line service, shorter routes, and reduced interchange friction as potential merger benefits for Schneider's customers.

How smooth will the handoff be?

Planning began immediately after the agreement, and both sides aim for a seamless transition. Tureman said Norfolk Southern pulled forward some infrastructure investments specifically to prepare.

"What I hope, 3 months from now, for our customers not to have noticed anything," Tureman said.

A clean handoff would set up joint sales efforts heading into what he called a strong intermodal market in 2026 and 2027 — a timeline both executives appear to be underwriting with this deal.

Earnings backdrop

Schneider reported earnings growth in its intermodal segment in Q3, in line with its stated growth pillars of logistics, dedicated, and intermodal. Dedicated revenue per truck rose 3.1% in the quarter.

Baumgardt emphasized that disciplined freight selection and appropriate driver allocation remain priorities as the company manages through the current freight cycle — a reminder that even with a 30% intermodal rate advantage, execution still depends on drivers and drayage capacity.

With the eastern alliance locked to NS and the West anchored by Union Pacific, Schneider is betting the next intermodal upcycle rewards carriers that control their own assets end to end.