Why a Coast-to-Coast Railroad Means Lower Costs for America

As Union Pacific’s senior vice president of strategy, I work closely with industry experts and leadership from both companies to evaluate the Union Pacific-Norfolk Southern combination. As we explained in our amended application to the Surface Transportation Board, the benefits are clear and compelling – especially at a moment when affordability matters deeply to American families and businesses.

Every day, freight moving coast to coast by rail comes to a stop in the middle of the country for a handoff between railroads. Union Pacific serves the West; Norfolk Southern serves the East. The result is friction built into the system.

Approximately 1 million times each year, we exchange freight with Norfolk Southern. In some cases, a third railroad is involved. In others, freight must be transferred by truck from one railyard to another. Each exchange adds time, cost and risk to the supply chain.

The Union Pacific-Norfolk Southern combination will eliminate this inefficiency. On a coast-to-coast railroad, freight will move seamlessly from origin to destination – bypassing costly interchanges and taking the most direct route possible.  

Cars built in Michigan will travel directly to Arizona. Lumber from the Southeast will move to houses being built in Texas. Consumer goods arriving at the Port of Los Angeles will move efficiently to distribution centers in the Northeast. Nearly every sector of the U.S. economy will benefit.

Removing this mid-continent barrier will unlock the full advantages of freight rail. Compared to long-haul trucking, rail is safer, more fuel efficient, lower cost and produces fewer emissions. It also reduces congestion on highways and wear on publicly funded roadways.

Industry experts estimate that a seamless coast-to-coast rail option will remove 2.1 million trucks from America’s roads each year. By shifting freight from higher-cost trucks to lower-cost rail, shippers will save an estimated $3.5 billion annually – savings that will ultimately flow through to consumers.

Customers will save in additional ways. Faster, more reliable service allows companies to reduce inventory buffers. Rail car owners gain through improved asset utilization, turning the same equipment more frequently. Administrative complexity drops, too – shippers will have one-stop shopping to plan their moves, and one customer service team to answer questions and resolve issues.

My career in railroad finance, tech and strategy has reinforced a fundamental truth: efficient supply chains are essential to a strong economy and affordable products. A transcontinental railroad will put that efficiency to work – strengthening American businesses and helping lower the cost of everyday necessities people rely on.

Get the facts at AmericasGreatConnection.com. 

Please review Union Pacific’s cautionary note regarding forward-looking statements.