Union Pacific collected $91.1 million more in fuel surcharges than it spent on fuel during the second quarter, offering a rare look at how a charge designed to offset rising diesel costs can become a source of profit for a transportation company.

The railroad disclosed the figures in filings with the Surface Transportation Board. Union Pacific said its fuel-surcharge increases were in line with the industry and that the charges are one part of the overall price customers negotiate when choosing rail service.

The gap was much larger than at rival railroads.

Norfolk Southern reported a fuel-surcharge surplus of about $3.6 million during the quarter, while CSX reported roughly $8.4 million. Union Pacific’s surplus was more than ten times either amount.

The company previously said fuel surcharges added about 14 cents per share to second-quarter earnings. Based on Union Pacific’s outstanding shares, that translates to roughly $83.2 million in profit.

Fuel surcharges are typically tied to benchmark diesel prices through formulas written into customer contracts. The complication is timing.

There can be a lag of as much as two months between a change in fuel prices and the surcharge customers actually pay. When fuel prices rise quickly, a railroad can temporarily under-recover its costs. When prices fall or stabilize while the surcharge formula is still catching up, the opposite can happen.

That is exactly what Union Pacific’s numbers show.

In the first quarter, the railroad collected $34.8 million less in fuel surcharges than it spent on fuel. Across the entire first half of 2026, however, surcharge revenue still exceeded fuel expenses by $56.4 million.

Union Pacific was the only major U.S. railroad whose fuel-surcharge revenue exceeded its fuel costs over the full first half.

That comparison makes the numbers more striking.

BNSF, Union Pacific’s major competitor in the western United States, reported fuel surcharges that were $658.1 million below its fuel costs during the same six-month period.

For shippers, the issue is bigger than one quarterly accounting line.

Rail costs ultimately become part of the price of grain, chemicals, automobiles, building materials, consumer products and countless other goods moving through the economy. When transportation surcharges rise, manufacturers and distributors either absorb that expense or eventually pass some of it along.

Rail fuel surcharges have existed for decades and have survived regulatory scrutiny and legal challenges. But railroads provide an unusually transparent window into the practice because they are required to report both fuel spending and surcharge revenue.

That makes Union Pacific’s $91.1 million second-quarter surplus particularly revealing.

The figures also arrive as Union Pacific seeks regulatory approval for its proposed $85 billion acquisition of Norfolk Southern, a deal that would create the first railroad spanning the continental United States.

Critics of the merger argue that a larger railroad could gain additional pricing power. Union Pacific says the combination would improve service and create a more efficient national rail network.

Whatever happens with the merger, the latest filings show something businesses rarely get to see so clearly: a surcharge created to recover a volatile operating cost can sometimes recover considerably more than the cost itself.

JBizNews Desk | Omaha

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