By: Adrian Arnakis, AAR SVP of Government Affairs
Date: September 27, 2019
Potholes grow bigger every day. Bumper-to-bumper traffic and honking horns reflect a sea of frustration. The most routine weather events can result in road closures.
Study after study shows traffic takes a mighty toll on the U.S. economy — and our roads. Because our nation’s highway infrastructure is in a serious state of disrepair, these problems will only worsen over the coming years.
America’s nearly 140,000-mile freight rail network, spanning 49 states and the District of Columbia, offers a striking contrast. Reliable and efficient, it provides value every day to consumers, businesses and the greater American economy. Railroads’ spending on infrastructure, equipment and technology — more than $685 billion since 1980 — has built a system that is the best in the world, and integral to the free flow of commerce.
Freight trains today move along tracks outfitted with highly advanced sensors and across bridges inspected using drones. And, even as the exhaust of idling cars fills our air, the efficiencies of rail provide environmental benefits everywhere trains go. This is what a 21st-century network looks like, and what steady private investment has achieved.
For decades, Washington policymakers and think tanks have denounced the state of our nation’s public infrastructure, yet the current level of investment has failed to fix the problem. The neglect has, unsurprisingly, just made the problem worse, as laid out in a new report from the Transportation Research Board, a division of the National Academies of Sciences, Engineering, and Medicine.
The Interstate Highway System, the report notes, is threatened by a number of “looming challenges,” including increased congestion and sky-rocketing maintenance costs. The report estimates that it would take up to $70 billion annually to rebuild our highway system — almost three times as much as the $25 billion currently spent.
When policymakers in Washington and beyond consider ways to ensure that goods can flow freely and efficiently in a way that best serves the American public, businesses and the greater economy, they have a case study in the nation’s freight rail network.
Local Rail Projects Deliver National Impact
Each year, freight rail companies spend billions of dollars — about 40% of their revenue — on equipment and infrastructure projects across the country, making their network safer and more efficient. In addition to their own projects, railroads have joined with government in public-private partnerships that provide public and private benefits. Railroad infrastructure projects support thousands of jobs nationwide and bolster local economies.
BNSF has announced a $3.6 billion investment plan for 2019, with multimillion-dollar projects planned in California, Illinois, Kansas, Minnesota, Montana, Nebraska, New Mexico, Oklahoma, Texas and Washington.
CSX has partnered with the federal government and individual states to create the National Gateway, a more efficient rail route that is giving Midwest states easier access to East Coast ports. Norfolk Southern teamed up with 13 states to build the Crescent Corridor, a 2,500-mile network connecting the Gulf Coast and East Coast.
Shipping by rail instead of trucks also has significant environmental benefits. An AAR analysis shows that if just 10% of freight moved by the largest trucks were instead moved by rail, greenhouse gas emissions would fall by more than 17 million tons. That’s the equivalent of planting 400 million trees. The National Gateway and Crescent Corridor projects are removing more than one million trucks from the road, helping to reduce congestion and damage to highways along those corridors.
Tech Makes Rail Safer & More Efficient
Infrastructure and equipment investment, coupled with ongoing investment in technology, have allowed freight railroads to become safer and more efficient than ever. Smart sensors placed throughout the rail network constantly monitor locomotives, rail cars and infrastructure, detecting problems before they result in accidents. According to the latest available Federal Railroad Administration data, U.S. railroads have reduced the mainline train accident rate 28% over the past decade.
Cutting-edge technology, such as advanced dispatching software, has driven efficiency gains as well. The software provides real-time scheduling recommendations to railroads, allowing them to add more trains to the network and increase capacity. Technology like this has enabled rail traffic density to increase about 200% with no significant increase in the size of the railroad network.
Remarkably, these safety and efficiency gains have happened while average rail rates (measured by inflation-adjusted revenue per ton-mile) have fallen 46% since 1981. To put it another way, the average rail customer can move roughly twice the amount of freight today for nearly the same price they paid in the early 1980s. The cost-effectiveness of America’s railroads give American industries — from agriculture to energy to forestry — a competitive edge in global markets. Consumers see the benefits, too, because competitive rates help businesses produce more affordable goods.
Rail’s Ripple Effect
Freight railroad investments have a significant effect on the broader economy as well. According to analysis from Towson University in 2017, U.S. freight railroads helped spur about $220 billion in economic activity and supported roughly 1.1 million jobs nationwide. Smart public policy that encourages the movement of more freight by rail will generate even greater returns to communities large and small.
Forecasts from the Federal Highway Administration indicate total U.S. freight shipments will rise from 35% by 2040. Thanks to freight rail’s spending on its network, the industry is better prepared than ever to meet that higher demand without putting additional stress on highways, adding to traffic congestion or increasing greenhouse gas emissions.
Instead of taking a free ride, railroads will continue to invest their own money in America’s future. By investing in infrastructure, equipment and technology, rail isn’t just building out its network. It’s building a stronger America that is prepared to meet the transportation needs of today, as well as those in years to come.