Union Pacific-Norfolk Southern Combination: More Routes, More Customers and More Markets for Short Line Partners

The Union Pacific–Norfolk Southern combinationwillcreate 84,000 new county-to-county laneswheretruckfreight could shift tosingle-linerailservice — including 41,000 in the historically underserved Watershed region between Chicago and New Orleans — directly expanding the reach and volume available to short line railroad partners and the communities they serve.

Short line railroads provide the critical first and last mile of America’s freight network. They connect farms, factories, grain elevators and small manufacturers to the national rail network — and through it, to markets across the country and around the world. For decades, that connection has been limited by an artificial divide running down the middle of the country, forcing freight to change hands between eastern and western carriers at congested gateway cities. Every handoff adds cost and complexity that short lines and their customers absorb.

The combination will remove that barrier. For short line partners and the communities and local businesses they serve, that means access to routes, customers and markets that may not have ever been reachable by single-line rail service before.

84,000

New county-to-county lanes eligible for single-line service — 41,000 within Watershed markets

105K

Carloads of merchandise traffic are projected to convert from road to rail in Watershed markets — Oliver Wyman

500M

Tons of goods originate or terminate within 250 miles of
the East-West gateways — currently underserved by rail

Built for Growth

The Union Pacific-Norfolk Southern combination is about building to create growth for the American economy. A transcontinental railroad will unlock new lanes, customers and markets that aren’t there today, creating more opportunities for short lines.

As railroads become more competitive with long-haul trucking, more freight shifts to rail, which means more carloads originating and terminating on short lines.

84,000 New County-to-County Lanes — and 41,000 in the Heartland

The combination will transform an estimated 10,000 existing interline lanes into faster, more efficient single-line service — and create 84,000 new county-to-county lanes where shippers currently move freight by road that could, for the first time, move by single-line rail. Of those 84,000 new lanes, 41,000 are within Watershed markets such as Chicago, St. Louis, Kansas City, Memphis, Birmingham, Louisville and New Orleans. These are some of the communities that have waited longest for this access.

A seamless coast-to-coast network will make it easier for short lines to connect their customers to ports and new markets. Consulting expert Oliver Wyman projects 105,000 carloads of merchandise traffic will convert upon single-line service availability, leading to investment and job creation in short line communities.

Agriculture and the Heartland Connection

Today, gateway barriers and interchange delays limit the options available to farmers who need access to inland elevators and coastal ports. A transcontinental railroad will provide seamless single-line access to markets on both sides of the Mississippi — expanding port options east and west and removing the handoff costs that currently make rail uncompetitive for many agricultural moves.
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The examples are specific: soybean meal from western crush plants to East Coast markets; grain from eastern elevators to Gulf Coast ports; corn and soybeans from Minnesota and Iowa co-ops to customers on the Eastern Seaboard. These are not hypothetical routes; they are existing ones served by truck that will shift to rail when the complexity of interchange friction between rail carriers is eliminated. Short lines that serve agricultural communities are positioned to capture that volume directly.

Oliver Wyman also estimates 55,000 carloads of chemicals and related products will convert from road to rail when single-line service is available, another category where short lines in these communities stand to benefit significantly. Importantly, rail is the safest way to move freight over land and that would mean less of these critical products on the highway.

A combined railroad means one-stop shopping for customer service and one accountable partner for the entire journey, making it easier for short lines to line up service for customers. A seamless coast-to-coast railroad will be faster, more reliable and have a lower cost structure, reducing delays and creating more predictable service. Short lines will be able to offer a more reliable service product.

Existing Short Line Operations Are Protected

Short lines will be the connective tissue extending the reach of the new transcontinental railroad. The Union Pacific-Norfolk Southern combination is built to strengthen, not disrupt, those short line railroad partnerships. The combined company’s operating plan maintains existing connections with current short line partners and includes enhancements in Chicago and St. Louis to reduce operational complexity and expand interchange capacity. Short lines will work with the same integrated partners they do today, with greater market access and volume flowing onto their rails as single-line service opens routes.

“We believe this will help link our rural communities to more markets. In practical terms, that means our co-op can move Minnesota and Iowa corn and soybeans to customers on the Eastern Seaboard or Gulf Coast seamlessly and bring in fertilizer and feed ingredients from afar with less disruption.”

— KC Graner

President and CEO, Central Farm Service

FAQ

Will the proposed combination change existing short line connections or operations?

No — with one important exception that works in short lines’ favor. The combined railroad’s operating plan does not include any changes to existing short line connections. Changes in Chicago and St. Louis are specifically designed to reduce operational complexity and create additional interchange capacity, which benefits short line partners in those markets.

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Will a larger combined railroad prioritize its own network at the expense of short lines?

No. Strong short line partnerships are vital in achieving the goal of growth. Short lines originate and terminate a significant share of rail traffic, and that role becomes more important as the network expands. The combined company has every incentive to strengthen those connections to capture new business and move more freight.

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Could this merger reduce routing options or limit access for short lines?

No. By eliminating interchange barriers between East and West, the combined network will create more seamless, single-line routes. That will expand the number of markets short lines can reach and compete in, with fewer delays and less complexity.

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Will short lines lose leverage when dealing with a larger Class I railroad?

Short lines succeed when they deliver growth, and this combination is built to grow. More traffic, more lanes and more competitive service with trucking all increase the value short lines bring to the table. That strengthens commercial partnerships rather than weakening them.

Make Your Voice Heard

More than 2,000 businesses, unions, farmers and community leaders have already told the Surface
Transportation Board why this combination matters — the largest show of support in STB history.
Tell your representatives in Congress why America needs a transcontinental railroad.

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