Abraham Lincoln’s vision of uniting the country by rail came to fruition a handful of years after his death. Now, Union Pacific (UP)—the company Lincoln created upon signing the Pacific Railway Act—once again has the chance to continue this legacy by incorporating Norfolk Southern’s (NS) rail system into its network to become the only coast to coast carrier. A network that originally bound the nation together by revolutionizing mobility, trade, commerce, and economic development could further strengthen energy supply chains by improving efficiency.
The acquisition would connect more than 50,000 route miles across 43 states and link approximately 100 ports. The energy sector will greatly benefit.
UP operates predominantly to the west of the Mississippi River, NS to the east. Merging the two would allow petroleum products and manufactured goods to move from production centers along the Gulf Coast directly to eastern markets and ports on a single rail line, eliminating costly and time-consuming handoffs.
Texas is the top chemical producing state in the U.S., with shipments valued at close to $120 billion. Together with Louisiana, the two states produce 80 percent of the nation’s primary petrochemical supply.
The Gulf Coast region is also one of the world’s leading exporters of oil, natural gas, and other petrochemical products (plastics, fertilizers, detergents, lubricants, paint, pharmaceuticals, and many other everyday items) that depart from the heavily congested port of Houston. Shifting some of the workload eastward to other ports via one rail service would relieve some of the burden while simultaneously boosting capacity.
Shipping freight throughout the continental U.S. demands solid logistics. Rail cars traveling great distances often pass through more than one rail carrier and must undergo interchanges, which are complex processes that involve proficient maneuvering and extra resources. Not always seamless, shipments may experience delays due to congestion or bottlenecking; sometimes they are misplaced. Reducing the number of rail carriers and opening new routes will streamline operations, allow for quicker transit times, and lower transportation expenses. Essential fuels and products consumers rely on will be delivered more quickly at cheaper rates.
More efficient and cost-effective delivery methods will entice companies to utilize the rail system more often than the trucking industry, currently the predominant mode of freight transportation. The reduction in trucking means less rigs on the highways which decreases traffic, the deterioration of roads, and air pollution.
Government forecasters expect truck traffic to grow almost three to four times as fast as car traffic over the next three decades. Already tight in most metropolitan areas, the additional vehicles will continue clogging highways and neighborhoods. Making rail a more attractive hauling option could alleviate some of this stress.
Switching more freight from truck to rail will also decrease environmental harm. A truck axle carrying 18,000 pounds may be only 9 times heavier than a 2,000-pound automobile axle but does 5,000 times more road damage. More than three percent of all carbon dioxide emissions come from long-haul trucks; per ton-mile, emissions from trucking are eight times those from rail.
Despite concerns that the merger will negatively impact competition and cause price hikes, uniting the two rail carriers would enhance it, especially along East-West routes, by creating a second transcontinental operation with extensive scale and reach. The recently merged Canadian Pacific—Kansas City Southern railway is the only route serving East to West; providing an alternative carrier forces both to compete for customers.
The petrochemical industry stands to flourish with additional trade, not only here but abroad. As global demand rises for petroleum-based derivatives, improved rail connectivity would help the U.S. maintain its edge over international competitors.
The ultimate winners are the consumers who rely on quick and affordable delivery of thousands of goods to effectively run businesses and/or households. Improving the shipping process while reducing costs will boost the former and enhance the latter.
As “The Great Uniter” Abraham Lincoln can take great pride in bringing the two coasts together by rail. He would marvel at strengthening the railroad he signed into law and its potential to further unleash global connectivity and prosperity.
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