One word-China! I hate to admit it but America has become a land bridge for the world. Although we recieve many imports from China and the far east, alot of that cargo goes right on through. The dollar is slowly taking a back seat to the Euro and many foreign economies are not going to tolerate American tariffs that flucuate with the sluggish dollar. What does this have to do with mergers? American railroads now basically operate in an east and west grid. NS,CSX-East…UP,BNSF-West. Container trains have basically four big transfer points that I know of situated around the mid-section of the country (Chicago, K.C., Memphis, New Orleans). I’m not an expert on these things but I have sense enough to know that if an east-west route between the big ports were one railroad, the less the cost for foriegn markets. We already know that UP and NS have been kicking around the idea. Look at this months issue of TRAINS. NS is trying to upgrade its route from Memphis, through Tennessee, Virginia, ect. towards Harrisburg. CSX?..I don’t know what CSX is doing at the moment but they already have a couple of routes linking the eastern ports to direct interchange with UP and BNSF. America is not calling the shots in this deal folks. I see foriegn markets putting pressure on our railroads to make “their” land bridge more fluid, i.e.–merge the railroads. I love my country, but China and other markets are advancing beyond ours. I hope this is all theory, I personally don’t want any more mergers but this is a possible scenario that I see.
I see a lot of solid blue containers on Union Pacific Sunset Route trains going through southern Arizona between Los Angeles/Long Beach and Florida with “ITALIA” (Italy) in large white letters on them. These may be some of those that are just crossing from one ocean to the other.
Not to long ago, one of the threads had a pretty good discussion on the land bridge idea. I wish I could remember which one. The long and short of it, is that this is not as prevalant as we all believed. Most container traffic crossing North America is for local consumption. The amount going on to Europe was quite small.
What ever “land bridge” traffic there might be now-insiders say that it is virtually nonexistant-is sure to be gone on completion of the Panama Canal expansion. Coincidently, construction on that expansion was inaugarated today with a public gathering and detonations of blasts to start the earth removal process. I understand that the new locks are sized to handle all but the very largest post-panamax vessels. This will make all water movement from the far east to Europe even less costly than at present.
On completion of the canal, it is expected that a substantial portion of the far east traffic destined to the Eastern US will move through the canal to Eastern US ports rather than coming through our west coast ports. That shift is one of the major reasons why the Norfolk Southern is raising tunnel clearances on the former N&W main through West Virginia. The port facilities in the Norfolk, Virginia area already have the water depths to handle any existing container ships and even have the capacity to handle the larger ships now on the drawing boards. NS is wisely positioning itself to get a greater market share of traffic imported from China and other far east countries.
The seven US Class I’s may merge, but not for reasons to provide better service for China. Besides, when the Union Pacific takes over all the other lines, think all the additional locomotives that could be painted up in Heritage colors, and all the new lines that would be opened for steam excursion operations. [tup][:D]
i believe, that as time goes on, the class one railroads will
demonstrate that they are quite capable of developing smooth
and seamless connections between east and west without
actually merging. And, as has already been mentioned, a
widened and deepened Panama Canal will likely be the most
significant factor regarding this China business.
After what has transpired so far in this era of railroading, I
don’t believe that either Washington or shippers collectively
are very much in the mood to entertain anymore mega-merger
ideas–and that this will be true for some time yet to come.
And from the railroads’ perspective, I think the notions of
economies of scale, etc., have already reached the point of
diminishing returns. There’s really not all that much more to
be gained by continued mergers.
Quite frankly on the whole land bridge concept, I think I’d fear outside acquisition of two of the railroads by one entity, which would then effectively turn them into one railroad, merger or not. There are very likely companies that have the money to do it.
Heck with the name…what would the reporting marks look like?
If you could use more than four letters, it would be something like “UPBNSFCSX”
Since you need no more than four letters, they might take a page from the Chessie System /Seaboard Coast line (CSX) and call the new system the “USX”…or just, “US”.
Dont hold your breath until that happens, however…
Well, never say never, but it won’t be soon if it is.
The NS Crescent Corridor plan is more about getting domestic traffic off (or accomodating growth on) I-81 and I-85 than it is about east/west international travel.