(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.