Rail mega-merger revives proposal for new, expanded Atlanta passenger services — and there’s a trucking angle

The tie-up has attracted its share of detractors who claim the monopolistic effects of shrinking the number of U.S. Class I carriers will raise rates and degrade service for shippers. But other stakeholders see a prime chance to extract valuable concessions. Canadian National (NYSE: CNI) recently did just that in an access agreement that would expand its operations to the Mexican border while giving UP-NS access to a route around the congested hub of Chicago.

It is precisely that ‘belt line’ bypass an embryonic coalition wants to bring to Atlanta, which would free up hundreds of miles of track for passenger trains and help thin out the city’s legendary traffic jam.

Like the I-285 interstate, the idea first envisioned a decade ago by Mark Hitchcock of Jacobs Engineering would divert freight trains that currently run through the heart of Atlanta onto existing track operated by NS and CSX (NASDAQ: CSX) in a U-shape route around the city. If 80% of freight trains were diverted, it would open up capacity for 14 commuter rail lines, Hitchcock said in an interview with the local Saporta Report. 

The merger process could help establish an operating agreement between NS and CSX, and kickstart construction of about 12 miles of new track in Atlanta’s southeastern region needed to complete the bypass, said Hitchcock, a member of the nonprofit Atlanta Design Roundtable backing the project.

Shifting thousands of commuters from road to rail will improve the fluidity for freight logistics in and around Atlanta, a business crossroads of the South. Hitchcock admits it’s no small lift, and compared development on the same magnitude of building Atlanta’s Hartsfield-Jackson International Airport, with a price tag of as much as $6 billion. But that’s a bargain compared to the $90 billion price tag a Georgia State House committee last week estimated the state would need to spend on roads by 2050 to keep up with growing truck volume and highway repairs.

“We are going to double the amount of freight between now and 2050,” Hitchcock said. “I don’t think we can build our way out of it. Right now, if there’s no change, 86% of all freight will be going by truck.”

Mayor Andre Dickens has expressed interest in the bypass, and connected the nonprofit with a regional commission for further discussions. Presumably, political support could be cultivated after Union Pacific in its merger applications said it plans to move more than 500 management jobs from NS headquarters in Atlanta to its own base in Omaha. 

“This is a 50-year vision,” Hitchcock said, and compared it to the Georgia Road Improvement Plan (GRIP) launched in 1989 that is 72% percent complete. “Leadership would have to come from the state.”

Stakeholders have until Sept. 4 to sign on to the merger evaluation process with the STB.

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Read more articles by Stuart Chirls here.

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