A software industry veteran is taking on one of the toughest problems facing the U.S. railroad industry: the chronic traffic bottleneck surrounding Chicago that can take more than a day for freight trains to move through.

Frank Patton, 73 years old and chairman of fledgling Great Lakes Basin Transportation Inc., wants to build a privately-financed rail route through Illinois, Wisconsin and Indiana that would allow trains to loop around the congested rail hub.

Mr. Patton’s proposed 280-mile line would reduce the about 30-hour train travel times through Chicago to eight or 10 hours. It would take about five years to permit and build and cost $8 billion, he said, monies that eventually would be paid off by user fees from the six major North American railroads the line intends to serve.

Its hurdles are many. Great Lakes Basin Transportation still has to assemble financing and obtain regulatory and environmental approvals. And the plan faces opposition from affected landowners and a so-far cool reception from railroads, which are pushing their own plan to dislodge the Chicago rail logjam.

But Mr. Patton is undaunted. “Anybody who looks at the projections for a 60% increase in traffic by 2040, they know something has to happen,” he said. “The Chicago terminal is one snowstorm away from disaster.” He is moving quickly to get regulators’ approval and to line up financing.