Freight rail doesn’t set consumer prices, but it plays a powerful role in keeping the transportation system cost‑efficient. By providing a cheaper, cleaner, and more reliable option for long‑distance freight, rail helps reduce transportation costs for many goods, strengthens supply chain resilience, and supports a more competitive U.S. economy.
How do freight railroads help keep goods affordable?
America’s freight railroads help keep the U.S. economy more affordable by making the most cost‑intensive parts of freight movement more efficient and predictable. Decades of productivity gains have helped hold down inflation‑adjusted rail rates, which were 44% lower in 2024 than in 1981 (based on STB data on railroad revenue per ton‑mile) and have remained essentially flat over the last five years. This reflects substantial productivity gains that have reduced the real cost of shipping by rail over time.
Freight rail’s affordability is thanks in part to its massive scale and inherent efficiency. Rail accounts for about 40% of long‑distance U.S. freight ton‑miles, more than any other mode, which makes it the backbone of America’s heavy‑haul supply chain. By moving huge volumes of grain, energy products, construction materials, industrial inputs, autos, and consumer goods, rail’s efficiencies extend far beyond the network itself.
Rail’s scale is reinforced by its fuel advantage: freight railroads move a ton of freight nearly 500 miles on a gallon of fuel, on average, making them approximately three to four times more fuel efficient than trucks, on average.
How does freight rail’s cost stability affect supply chains?
Trucking costs often jump quickly when demand or fuel prices spike. Historically, aggregate rail revenue trends have shown less volatility than spot trucking rates, reflecting differences in contracting structures and cost composition. That stability helps manufacturers, wholesalers, and retailers plan better and avoid sudden spikes in shipping expenses.
And because rail moves so many of the materials at the very start of the supply chain—grain, energy products, building materials, industrial parts—its efficiencies ripple outward. When early‑stage shipments stay affordable and reliable, it benefits everyone along the way: farmers, factories, distributors, retailers, and the small businesses that depend on them.
How important are freight rail investments to affordability?
Unlike trucks, barges, and airlines, America’s privately-owned freight railroads operate almost exclusively on infrastructure that they own, build, maintain, and pay for themselves. Railroads’ substantial private investments in track, equipment, and technology further support affordability by improving capacity, reliability, and productivity. U.S. freight railroads spend billions of dollars annually to maintain and enhance the infrastructure they operate on, reinforcing long‑term cost effectiveness for shippers.
Together, sustained productivity gains, a balanced regulatory framework, and ongoing private reinvestment make freight rail a stable, efficient backbone of the transportation system. The benefits of rail ripple throughout the supply chain and support affordability for businesses and consumers alike.