01-08-2025
Editorial: Will Chicago see fewer freight trains after the megamerger of Norfolk Southern and Union Pacific?
As fans of 'The Gilded Age' know, great fortunes were made by building railroads across the width of the USA.
Chicago, of course, was the epicenter of all that. Celebrities going from New York to Hollywood had to change trains in Chicago, usually with time for a quick visit with legendary gossip columnist Irv Kupcinet in Booth One at the Pump Room. And cross-country freight, for the most part, also had to make a change in Chicago. It still does. What today is known as the Norfolk Southern Railway serves states to our east. The Union Pacific railroad, as its name suggests, operates in 23 states west of Chicago and New Orleans.
On Tuesday, in a deal Cornelius Vanderbilt would have loved, Norfolk Southern and Union Pacific said they had agreed to merge, thus creating, for the first time ever, single ownership for a rail link from the ports of New Jersey to the Pacific Ocean. This is a stock-and-cash acquisition of Norfolk South by Union Pacific that is worth more than $71 billion. It will need regulatory approval. Legitimate concerns unsurprisingly have been raised by unions, which fear job losses flowing from consolidation, and by freight customers, who fear that reduced competition will lead to worse service and rising prices, especially if the similarly aligned rail-freight competitors, BNSF and CSX, feel forced to merge to remain competitive. That's a likely outcome.
Clearly, competitiveness for customers has to be maintained and the way to do that in this instance would be to insist as part of the approval process that other railroads get some trackage rights on the newly coast-to-coast Union Pacific rails, a concept known as 'reciprocal switching' in the industry. The proposal also should not be approved without incentives and penalties designed to protect levels of service.
On the other side of the ledger, the CEOs of the two railroads have been out there arguing that the merger will mean more freight moves by rail and less by truck, which is obviously good news for anyone who drives on the interstates alongside 18-wheelers.
What will this Big Freight deal mean for Chicago? That's no small question, since 25% of all U.S. rail traffic currently originates, terminates, or passes through our immediate area.
Some have speculated that a merger would mean fewer trains rolling through northern Illinois, given that there would be no need to hit the start and end points of two different railroads. That would be good in the long term for mass transit in our region, especially Amtrak and Metra, which often share tracks with freight railroads. Anyone who has sat on a passenger train is familiar with the delays caused by the lumbering passage of freight. In this new world, in theory, Chicago would no longer be the main locus of moving cars from one railroad to another.
Surely some benefits would accrue. That is something for the regulators to consider.
In the industry publication FreightWaves, though, Union Pacific CEO Jim Vena poured cold water on the idea of streams of trains soon taking a different route across the nation. 'We don't see a huge amount of business changing from Chicago to go to Memphis or go to New Orleans,' Vena reportedly said, 'because the out of route miles just don't add up.'
But if trains aren't likely to disappear from the notoriously delay-prone crossings in DeKalb County and elsewhere, they should at least move through Chicago more quickly and efficiently. And that should help both local drivers and the many bottlenecks that frustrate rail passengers here.
The era of celebrities doing photo shoots between trains here was killed off by coast-to-coast flying. That was a local loss. But freight trains don't stop by Booth One. We'd all be better off with fewer of them. Unless, that is, you rely on moving cargo from one railroad to another for your livelihood.
