Uncle Sam’s Reindustrialization Needs A Spark From Transcontinental Railroad

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The U.S. may finally have a coast-to-coast railroad owned by one company. What does it mean for competition and pricing power at a time when American businesses and consumers both could use some deflation, not more inflation?

Union Pacific’s proposed $85 billion merger with Norfolk Southern is the industrial version of the “Trump Corollary” of the Monroe Doctrine 2.0 in action, as described in the White House’s National Security Strategy memo last November. By uniting the two rail networks into one transcontinental railroad, the merger could unleash the power of the American manufacturing base by streamlining logistics and stripping out costs associated with having to unload goods on a train, and load it onto another train, or to multiple trucks that guzzle expensive diesel.

The North American economy is increasingly viewed as a continental manufacturing platform. The Union Pacific-Norfolk Southern merger creates a rail spine connecting Pacific ports, Mexico, the industrial Midwest, Gulf Coast manufacturing and agriculture to – finally – the Eastern Seaboard.  Looking at it that way, a somewhat dull railroad deal becomes a massive geopolitical logistics story instead.

The transcontinental railroad would deliver the strengthened logistical backbone needed to support the return of industry back to the American heartland. (RELATED: The Race America Can’t Afford To Lose)

Providing cross-country single-line rail service means American-made goods can reach customers more quickly and at a lower cost, relieving Americans from the pressure of creeping inflation. American manufacturers will have faster and more affordable access to ports, allowing them to compete........

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