C4TA Deputy Director Phil Bell attended The Future of Freight Rail in America event at the Capitol Hill Club in Washington, DC. This event was heavily focused on Union Pacific-Norfolk Southern merger and featured a panel consisting of Professor Michael Gorman (University of Dayton), Ashley Baker (The Committee for Justice), Mike Toth (Civitas Institute), and Paul Prentice (Farm Sector Economics).
The discussion included several key takeaways:

• A substantial amount of eastbound intermodal freight leaves the railroad network at Chicago due to the “rubber interchange.” This term refers to containers and trailers being removed from the trains of western railroads such as Union Pacific and BNSF and moved on rubber tires to an eastern carrier across the city of Chicago’s highways. In practice, many of these trailers and containers stay on trucks and continue to their final destination, losing the efficiency that rail has to offer.
• Trains are more efficient than trucks for moves between 1,000 and 2,000 miles. However, due to the ‘friction’ involved in interchanging cars between carriers, beyond 2,000 miles, the advantage shifts back to trucks. Thus, establishing a single carrier with ownership of routes stretching from the east coast to the west coast would remove this impediment and make rail more competitive with trucking beyond 2,000 miles.
• The most vocal participants in most rail mergers are the so-called “2-to-1 shippers.” These are rail customers who stand to lose access to two railroads, having only one carrier as a result of a rail merger. The panel pointed out only one area of overlap between Union Pacific and Norfolk Southern, in the St. Louis-Kansas City corridor where the Norfolk Southern’s former Wabash Route and Union Pacific’s former Missouri Pacific line vie for traffic between these endpoints. Thus, the 2-to-1 shipper situation is largely avoided in this combination, blunting the ‘anticompetitive’ fears.

Coverage from the Kingsport (TN) Times-News: Analysts say rail merger could cut shipping costs, ease delays for farmers | Kingsport Times News