What have the mergers that built today’s Burlington Northern Santa Fe system accomplished? It’s important to ask this question, because it predicts where BNSF might be headed in the future. In basic terms, mergers have four outcomes. Strategic mergers create seamless service in new or existing traffic lanes and open new markets. Tactical mergers reduce operating costs by eliminating parallel or poorly located lines. Overhead mergers reduce duplicate shops and headquarters, and gain purchasing power. And accretion mergers recognize it’s probably better to take the partners — and work out the operating details later — than leave them to wander into the camp of the enemy … in this case, Union Pacific.
While the BN merger of 1970 had a tactical outcome, the additions of the Frisco in 1980 and the Santa Fe in 1995 so far are accredtion mergers. In contrast, the mergers that created today’s Union Pacific have had broad strategic outcomes, creating new traffic lanes: Memphis-Los Angeles on the Texas & Pacific and Southern Pacific; Chicago-Los Angeles on the Golden State and Sunset Routes. This last lane is made possible, curiously, by trackage rights on the Santa Fe between Chiccago and Kansas City granted to SP as a condition of the BNSF merger: Merger with C&NW also unlocked to UP the greatest prize of all, Wyoming’s Powder River Basin coal mines.
Few new lanes were created by adding Santa Fe to Burlington-Frisco in 1995, with the exception of corn from Minnesota, Iowa, and South Dakota into Santa Fe territory. BN and Santa Fe territory. BN and Santa Fe intermodal lanes are distinctly separate and operate much as they did 30 years ago. Rather than augmenting each other like UP, MP, and SP, the BN and Santa Fe overlap along a West Texas-Chicago axis like two halves of a badly assembled plastic model, with the Frisco dangling on the rim like a piece from another kit.
Mergers don’t follow perfect paths — the all-seeing Oz doesn’t work for a railroad. Expediency and exigency intervene, along with wars, government policies, and luck. The question for the future is how BNSF managers will find traffic and profits in the system created from its predecessors.
Railroads included in this map:
Atchison, Topeka & Santa Fe; BNSF Railway; Chicago, Burlington & Quincy; Chicago, Milwaukee, St. Paul & Pacific; Chicago, Rock Island & Pacific; Colorado Southern; Denver & Rio Grande Western; Fort Worth & Denver; Great Northern; Missouri Pacific; Missouri-Kansas-Texas; Northern Pacific; Southern Pacific; Spokane, Portland & Seattle; St. Louis-San Francisco; St. Louis Southwestern; Texas & Pacific; Union Pacific; Western Pacific
