The Rail Merger That Could Finally Fix America’s Broken Freight Network

The proposed Union Pacific and Norfolk Southern merger has sparked debate about its potential impact on the US freight network. While some view it as a straightforward Wall Street transaction, the reality is far more complex. At its core, this deal represents an opportunity to address decades of inefficiencies in America’s rail system – inefficiencies that have been hidden in plain sight.

The country has tolerated a disjointed and archaic network for too long, built on competing rail barons and territorial rivalries from a bygone era. This legacy infrastructure is a constant source of frustration for shippers, retailers, and consumers alike. The costs associated with this inefficiency are staggering: over $108 billion in trucking industry costs annually due to highway congestion alone.

The merger offers a chance to rectify these issues. By combining their resources, Union Pacific and Norfolk Southern can create a more integrated rail network that would significantly reduce the time, cost, and uncertainty associated with long-haul shipments. Freight railroads move one ton of cargo nearly 500 miles on a single gallon of fuel – three to four times as efficiently as trucks.

The Surface Transportation Board (STB) must consider whether this merger will deliver real improvements in service quality, interchange access for short line railroads, and pricing transparency. The STB has the authority to impose meaningful conditions if it approves the transaction – conditions that can determine whether a merger delivers on its promise or simply consolidates market power without public benefit.

These conditions include enforceable service quality standards, guaranteed interchange access, and clear penalties for service failures. In essence, the STB must weigh the competitive risks against the potential benefits of a more integrated rail network.

Beyond this specific deal, there is a broader infrastructure picture worth considering. Federal highway funding has dropped in real terms since the early 1990s, and public resources cannot keep up with the maintenance backlog on the national road network. Private capital flowing into freight rail infrastructure helps ease that burden – without needing a congressional appropriation and without adding to the federal balance sheet.

In an era where ideological debates often overshadow practical solutions, it’s refreshing to see organizations like the Alliance for Innovation and Infrastructure advocating for infrastructure decisions based on performance, not ideology. The right questions for any major change to national infrastructure are: Does a proposed change make the system more reliable, efficient, and resilient? Does it serve the public interest over the long term?

The operational need for a more integrated rail network is real, and the STB is well-positioned to weigh the competitive risks and arrive at a balanced decision. The review itself should model the standard of timeliness that the industry demands – after all, in an industry where timeliness is everything, procedural hurdles can create unnecessary delay.

The Union Pacific–Norfolk Southern merger deserves serious consideration because the alternative is a system never built to work. By investing in a more integrated rail network, America can reap significant economic and environmental benefits. It’s time for policymakers to put aside ideological differences and focus on what truly matters – creating a system that serves the public interest over the long term.

Policymakers should follow the lead of forward-thinking organizations like the Alliance for Innovation and Infrastructure, which has consistently advocated for infrastructure decisions based on performance, not ideology. By embracing this approach, America can create a freight network that is efficient, reliable, and resilient in the face of growing demand.

As the STB weighs in on this critical issue, it’s essential to remember that the true test of success lies not in approving or rejecting the merger but in ensuring that any resulting changes serve the national interest. With careful consideration and a commitment to performance-based decision-making, America can create a freight network that truly serves its people – one that is built for the 21st century, not the 19th.