The efficiencies achieved by freight rail benefit rail customers, consumers and the broader economy.
To see an example of this, simply head over to your local car dealer or watch the many vehicles — cars, trucks, SUVs and minivans in every color, shape and size — pass by on the street. Such abundance and variety is possible because car manufacturers can roll out thousands of new vehicles in a single day. Railroads help drive this scale of production and delivery to consumers by moving the raw materials, auto parts and millions of finished automobiles coast-to-coast seamlessly. And since rail customers can ship nearly twice as much freight for approximately the same price that they paid 35 years ago, manufacturers are better positioned to scale up to serve an existing market or to create a new one.
Freight railroads are part of every production stage of an automobile.
Railroads have played a crucial role in America’s auto industry since the earliest Model T rolled off the assembly line. Each year, freight rail moves nearly 75% of the new cars and light trucks purchased in the U.S. In 2018 alone, automakers sold 17.27 million cars and light trucks in the United States, an achievement made possible by freight railroads and the larger integrated transportation network.
Long before a finished car hits the road, it begins as raw materials — plastic, metals and sheets of glass — which railroads move to manufacturers to be turned into the roughly 30,000 individual parts of a car, from bolts to dashboards. Railroads then move these auto parts to vehicle assembly plants before finally transporting the finished vehicles across North America.
In fact, a single train can move 750 vehicles at once. In 2018, U.S. Class I railroads moved 1.8 million carloads of motor vehicles and parts.
Railroads also transport the biggest and heaviest auto parts — car frames, engines, transmissions and axles — without breaking a sweat. Additionally, they carry imported car parts — big and small — from ports like Charleston, South Carolina to inland assembly plants.
Railroads spend billions of dollars to meet the rapidly changing needs of America’s auto industry.
Railroads privately spend an average of $25 billion annually to maintain and modernize their 140,000-mile rail network to meet their customers’ transportation needs.
As auto manufacturers opened new plants in states like Georgia, Kentucky and California, railroads laid new track in and out of plants and built specialized rail yards to enhance productivity. Design modifications to rail equipment used to move automobiles has allowed automakers to ship more cars at once, new routes have reduced shipping times, and special handling protocols at rail yards have made the journey smoother than ever before.
Investments into new technologies are is also helping railroads keep pace with changing customer needs. Freight rail mobile applications efficiently track shipments while predictive analytics give customers improved delivery windows so they can more effectively manage their daily operations.
Trade directly impacts freight rail and automotives.
International trade, facilitated largely through free trade agreements, has benefited the U.S. economy. When U.S. companies — such as freight rail customers — have access to global markets, businesses and customers, Americans gain access to a greater variety of goods at a lower cost. A staggering 42% of all rail traffic is connected to international trade, much of which occurs across Canada, Mexico and the United States. And in 2015, U.S. companies exported over $30 billion in auto parts to Canada and more than $29 billion in U.S. parts to Mexico. Prominent railroad customers, such as the automobile sector, have particularly benefited from free trade. In 2016, 13 automakers manufactured 12.2 million vehicles in the U.S. Automakers have also launched 15 new plants since the creation of NAFTA, leading to 50,000 direct and 350,000 indirect auto jobs.