Imagine my surprise, then, to read this morning that America has functionally not had a transcontinental railroad in spite of all of that.
For decades, a patchwork of regional rail networks across the United States have been forced to grapple with the same headache: Interchanges, where cargo is handed from one rail line to another.
Interchanges are one of the biggest friction points in freight logistics. They slow down the transport of goods that commonly travel on railroads--important products like lumber, food and fuel--while driving up shipping and supply chain costs for important industries like manufacturing, homebuilding, and retail. Ultimately, consumers foot the bill of the higher transport costs, exacerbating inflationary pressures on working-class Americans.
A long-anticipated answer to these problems arrived this week: the formation of America’s first coast-to-coast railroad via the industry-transforming merger of Norfolk Southern and Union Pacific railroads. By connecting over 50,000 miles of rail across 43 states and 100 ports, the transcontinental railroad will transform the U.S. supply chain to the benefit of businesses, manufacturers, consumers, and the American economy.
Union Pacific was one of the original participants in the 'Golden Spike' railroad; you'll see its name painted on one of the historic trains if you watch the movie. The physical railroad went all the way, but no institutional railroad ever did.
There are the usual concerns about monopolies, but the elimination of interchanges will offer a significant efficiency.
2 comments:
There are the usual concerns about monopolies, but the elimination of interchanges will offer a significant efficiency.
True. Also true, though, is that control over the few continental end-to-end shipping routes offers considerable opportunity for monopoly and monopoly abuse.
Also also true: of those two, only the abuse of monopoly power is illegal; monopoly itself is not.
Eric Hines
From my perspective as a railfan that excerpt reads like a UP-NS press release given the hyperbole. The interchange process was figured out long ago by railroads, and it's hardly an encumbrance to them any more given computer technology. The main friction is, and was more so when there were a multiplicity of routing options, for shippers figuring out their preferred routing based on cost and service given that the originating carrier always wanted the longest haul possible, and terminating carriers often didn't get sufficient revenue to make providing expedient delivery service important to them. Freight rail operations have also changed a lot over the decades, with carload or even multi-car shipments becoming far less common compared to unit train operations and transportation of containers and truck trailers. The Staggers act back in 1980 lead to a lot of efficiencies by cutting the government out of the process of rate making. The main efficiency from most rail mergers has been the ability to spread overhead costs across a larger traffic base and improved capital generation capability by a larger system, which drives improvements in the physical plant of the system.
So we have had a transcontinental rail system since 1869 though not a true transcontinental railroad, unlike Canada where the promise of such a line was key to bringing the Pacific Coast provinces into the Confederation.
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