Union Pacific Railroad has renewed its partnership with longtime supplier Rocky Mountain Steel Mills through a new seven-year contract for domestic steel rail production. The deal also ends a legal dispute filed in Nebraska, with Union Pacific withdrawing its lawsuit against the supplier.
The Pueblo, Colorado mill was recently rebranded under Atlas Holdings ownership and operates as Rocky Mountain Steel. The company plans to bring online a new long-rail mill this year as part of a $1 billion investment in US steel production. The new line will produce 328-foot single-piece rails – which require 80% fewer welds than standard 80-foot rails, improving track safety and reliability, according to Union Pacific.
The renewed partnership followed months of negotiations after Union Pacific had sued the supplier for allegedly demanding 61% above contracted prices. Around the same time, BNSF Railway filed a similar lawsuit in Texas over a 50% price-hike dispute. Union Pacific CEO Jim Vena said in a statement that the railroad had collaborated with the Pueblo mill for nearly 140 years and called the new line "a significant step forward in American manufacturing."
The Pueblo facility directly employs over 1,200 people and supports more than 10,000 jobs in the regional economy. United Steelworkers (USW) International President Roxanne Brown welcomed the deal, underlining that US transportation infrastructure will continue to be supplied by US-based, union-made steel.
In parallel, Union Pacific continues to pursue its proposed $85 billion merger with Norfolk Southern, which would link more than 50,000 route miles across 43 states. The Surface Transportation Board (STB) rejected the application as "incomplete" in December; the railroad plans to file an updated submission later this month. The Rocky Mountain Steel agreement reinforces the strategic importance of domestic supply chain resilience for US Class I railroads.
Key Takeaways:
1. Union Pacific signed a seven-year rail supply deal with Rocky Mountain Steel and dropped its Nebraska lawsuit.
2. Atlas Holdings-owned Pueblo mill will commission a new long-rail line under a $1 billion investment.
3. The new line will produce 328-foot rails, requiring 80% fewer welds than standard 80-foot rails.
4. The facility directly employs 1,200 and supports 10,000+ jobs; USW President Brown backed the deal.
5. In parallel, Union Pacific is preparing a refiled $85 billion merger application with Norfolk Southern.
