Aug 19 (Reuters) - Activist investor Ancora Holdings, in

a letter to CSX board disclosed on Monday, urged the

railroad to pursue near-term merger options or replace CEO Joe

Hinrichs.

The activist investor urged the railroad to evaluate

potential tie-ups with Berkshire Hathaway-owned BNSF Railway and

Canadian Pacific Kansas City ( CP ) in order to determine the

best merger partner.

It warned that once Norfolk Southern ( NSC ) and Union

Pacific ( UNP ) start operating as a unified transcontinental

network, CSX stands to lose the most.

"If a deal cannot be struck, we assume it will not take us

running a proxy contest to ensure a qualified operator replaces

Mr. Hinrichs," the activist investor said.

Ancora criticized CSX for failing to engage with Union

Pacific ( UNP ) earlier this year. It also argued that regulators may

find it easier to review multiple rail mergers simultaneously.

"Getting something done as early as possible during the

pro-business Trump Administration should also be a priority," it

said.

"Shareholders cannot afford more missteps as CSX plays

catch-up in the rail consolidation race," Ancora added.

CSX told Reuters it welcomes opportunities to enhance

shareholder value and appreciates input from its investors.

The Brotherhood of Railroad Signalmen, representing over

1,200 CSX workers, urged stakeholders to reject any plan that

prioritizes quick profits over long-term safety and service.

"We are not opposed to innovation or progress," union

President Michael Baldwin said. "What we are opposed to is a

slash-and-burn approach from hedge funds and consultants whose

relationship with the railroad ends the moment their profits are

secured."

Ancora's letter, sent privately to the board of CSX on

August 6, comes as Union Pacific ( UNP ) has signaled its intent to

acquire smaller rival Norfolk Southern ( NSC ) in an $85 billion deal

that would create the first U.S. coast-to-coast freight railroad

and reshape the movement of goods and grain nationwide.