With its central location, access to more than 30 ports, more than 300,000 miles of road and 10,000 miles of rail, Texas serves as a premiere logistical hub for the United States. Freight rail acts as a major contributor, with the state moving 385 million tons of goods in 2023 alone. But growing demands and changing infrastructure will challenge freight rail’s ability to support the state's trade activity, a cause for concern for the entire industry.
There is a way to secure Texas’s status as a logistical hub: a Union Pacific–Norfolk Southern merger. This proposed merger would create the first true transcontinental freight rail network under a single system, eliminating the time consuming carrier handoffs that add days and significant cost to cross-country shipments and positioning Texas as a major hub linking freight flows between the East and West Coasts. Strengthening these connections would reinforce the Lone Star State’s role in the national supply chain, improve economic efficiency, and ease pressure on already strained roadway infrastructure.
Texas’ economy and its success are reliant on trade, and to a greater extent, freight efficiency. By investing in infrastructure, the state can maintain its competitive edge in key industries like energy and agriculture. America’s energy industry has become increasingly reliant on freight rail because of its cost-efficient ability to move bulk commodities across long distances, making Texas keenly aware how important an efficient rail system is.
In 2021, extreme weather conditions caused a natural gas pipeline in Texas to fail. Texas’ freight rail system allowed essential fuel to continue moving, keeping homes heated and Texans safe. A Union Pacific and Norfolk Southern merger would create an essential connection of energy corridors and work to resolve potential catastrophe.
But the merger does not only benefit Texas through energy trade. It reinforces Texas’ role in North American commerce through strengthened economic relationship with Mexico. Cross border trade accounts for over $550 billion in goods in 2024, with Texas handling over 70% of commerce activity between the US and Mexico. However, rail accounted for just 15% of the state’s exports and 16% of import activity. A stronger rail system, one granted through the coupling of Union Pacific and Norfolk Southern, could help bridge that discrepancy and increase rail’s roll in Texas’ economy.
The merger could also facilitate increases in southern Texas’ economic activity. Its location along the border and the Gulf of America provides access to international markets, making it a magnet for businesses looking for new opportunities. East Coast producers would have a new, cheaper mode of transportation for getting their products to ports.
Texas is one of the busiest states for semi-truck freight traffic, leading to increased congestion and worn-down roads. Freight rail offers an ideal solution. One rail car has the capacity for three to four truck loads. A single freight train hauls the same amount as 300 trucks, eliminating congestion and reducing the physical toll caused by vehicles with excess weight. Nationally, the merger is projected to shift an estimated 2 million truckloads a year from road to rail, a tangible reduction in wear on taxpayer-funded infrastructure that also will see a reduction in highway related crashes and injuries.
Freight trucking has become a primary driver of damaged roads, with heavy-duty trucks being responsible for 91% of damage despite making up 11% of travel on US roads. This costs taxpayers billions as the trucking industry does not pay its fair share. Current estimates suggest that a fair contribution rate would be $150 billion annually, 2.5 times what the industry contributes to surface transportation.
Outside of the physical damage and its related costs, trucks are often the perpetrators of roadway congestion due to vehicle size, the volume of trucks on the road, slower acceleration times, and reduced speed limits.
Not only does rail eliminate congestion and damage, but it moves goods at a fraction of the cost. For a net ton of shipping, rail costs $70. Trucking costs more than double that. Reduced shipping costs help consumers and businesses alike. The Union Pacific-Norfolk Southern merger will work to move freight off the highway and back to where it belongs, decreasing the burden on Texans.
Policy makers should let this pro-business, pro-consumer merger go through to eliminate supply chain delays, decrease damage to roads, and cement Texas as the logistics hub of the US.