Freight Rail Poised for Manufacturing Boom, Norfolk Southern Exec Says
Robert Martinez, vice president for business development at Norfolk Southern Corp., told participants at the Indiana Logistics Summit on Nov. 16 that he is excited about the long-term opportunities underway thanks to energy abundance in the United States.
“First, opportunities based on extraction, but later natural gas will give rise to basic chemical production,” Martinez said. “Eventually, cheap energy will induce manufacturing industries in which energy costs are a higher share of total cost — those are going to come back to the U.S., or will rise in the U.S.”
Martinez said rail companies are poised to service businesses all along the chain of development, from moving specialty pipe and fracking sand to sending manufacturing components and finished products to and from ports.
He acknowledged that currently low-cost oil and natural gas, along with stringent federal environmental regulations, are reducing rail business from coal companies and making oil-by-rail shipments from North Dakota largely unaffordable.
But he said Republican President-elect Donald Trump has pledged to promote the use of cheap coal, eliminate government mandates and develop new energy pipelines that will, over time, benefit rail companies and the country.
“Near term, from a cyclical perspective, this is an area of challenge,” Martinez said. “On the other hand, it is the availability of cheap, sustainable energy that will catapult the United States back into manufacturing in a serious way.”
Indiana already is home to more manufacturing jobs as a percentage of its workforce than any other state. It’s also extensively crisscrossed by freight rail lines, particularly in Northwest Indiana near the national rail hubs in Chicago.
Hundreds of leaders in the state’s transportation, logistics and manufacturing industries are attending the two-day summit, which is designed to promote global connections.
