KEY FACTS
- Freight rail reduces transportation expenses, helping keep goods more affordable for consumers.
- Rail’s cost stability helps prevent sudden spikes in shipping—and ultimately consumer prices.
- Massive scale, fuel efficiency, and private investment make rail a backbone of an affordable, resilient supply chain.
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Adapted for listening and narrated by a real person. Read the full narration at the bottom of this page.
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.
Read the AAR Audio Narration
How Freight Rail Helps Keep Goods Affordable
This is AAR Audio, and you’re listening to How Freight Rail Helps Keep Goods Affordable.
When you buy groceries, build a home, or order something online, you’re paying for more than the product itself.
You’re also paying to move it.
Transportation is built into the price of almost everything we buy.
The less it costs to move goods, the less pressure there is on prices.
That’s where freight rail comes in.
Railroads don’t decide what products cost. But they do help keep transportation affordable. And because transportation affects nearly every product in the economy, those savings ripple far beyond the railroad.
How does that work?
Think about a train.
One freight train can move the equivalent of hundreds of trucks.
It can carry grain from the Midwest. Steel from a mill. Lumber from the Pacific Northwest. New cars from a factory. Or shipping containers filled with consumer goods.
Moving that much freight at once makes rail one of the lowest-cost ways to move goods over long distances.
It’s also the most fuel-efficient way to move goods over land.
On average, a freight train can move one ton of cargo nearly 500 miles on a single gallon of fuel.
That’s about three to four times farther than trucks can move the same amount of freight.
Using less fuel means spending less money moving products across the country.
Another advantage is stability.
When fuel prices rise or demand suddenly increases, trucking costs can climb quickly.
Rail shipping costs have historically been much more stable.
That helps manufacturers, wholesalers, and retailers better predict their transportation costs and avoid sudden increases.
But freight rail’s impact starts even earlier.
Many of the products we buy begin their journey on a train as a raw material — from grain that will become food to chemicals that will become medicine.
When that freight moves efficiently, every business farther down the supply chain benefits.
There’s another difference that many people don’t realize.
Most freight railroads own the tracks they operate on.
They build them.
Maintain them.
Repair them.
And invest billions of private dollars every year to improve them.
Those investments increase capacity, improve reliability, and help trains keep moving efficiently.
All of that helps control transportation costs over the long term.
The numbers tell the story.
Adjusted for inflation, the average cost of shipping by rail was 44 percent lower in 2024 than it was in 1981.
That’s the result of decades of productivity improvements, better technology, and continued private investment.
No single industry determines what Americans pay for everyday goods.
But freight rail helps make the entire transportation system more efficient.
Lower shipping costs.
More reliable supply chains.
Greater fuel efficiency.
Those benefits spread well beyond the railroad itself.
They help businesses stay competitive.
They help supply chains stay resilient.
And they help keep the goods Americans depend on moving as affordably as possible.
THE BOTTOM LINE
Freight rail helps keep American life more affordable by lowering transportation costs, stabilizing shipping rates, and improving supply chain efficiency. Its unmatched scale, fuel efficiency, and long-term investment reduce cost volatility and limit how much freight expenses translate into higher consumer prices—benefiting businesses, workers, and households across the economy.