When it comes to the quality of America’s infrastructure, railroads have moved to the top of the class. In a newly released infrastructure report card from the American Society of Civil Engineers (ASCE)*, America’s rail network received the highest grade awarded this year, a B.
The high marks for America’s privately funded freight rail system stand in stark contrast to taxpayer funded transportation infrastructure. Bridges, ports and roads, for example, continue to age and suffer from overuse. Reflecting their poor condition, ASCE respectively gave these systems grades of “C+” “C+” and “D.”
By spending billions of dollars to sustain, modernize and grow the freight rail network, U.S. freight railroads are easing the burden on these transportation systems—and the taxpayers who support them. In fact, since 1980, freight railroads—not taxpayers—have spent more than $630 billion to build the safe and cost-effective network that exists today. The industry is on track to spend more than $22 billion this year too.
These investments have resulted in innovative breakthroughs, including new ultrasound technology and acoustic listening devices that can identify track flaws before an accident occurs. It has also enabled the industry to increase capacity by upgrading existing and laying new track, expanding siding extensions and increasing rail yard capacity.
Huge investments have also been made in growing customer segments like rail intermodal. Tunnel projects, intermodal terminals, track upgrades and other infrastructure projects have made rail intermodal more reliable and cost-effective. For example, tunnel-raising projects allow railroads to utilize double-stacked containers to move consumer goods, greatly enhancing the productivity of each train. Such foresight provided one of the few bright spots in recent years with intermodal shipments on track to set annual intermodal records.
Thanks to freight rail’s private spending, the industry now returns $10 to the U.S. economy for every $1 spent. In fact, in 2014, U.S. freight railroads helped spur nearly $274 billion of economic activity and supported almost 1.5 million American jobs. This included $88 billion in wages and close to $33 billion in tax revenue—more than the annual tax receipts of 30 states. Meanwhile, average rail rates paid by shippers have fallen 45 percent since 1980. And building upon decades of safety improvements, rail accident rates have reached an all-time low.
This incredible record of success is only possible in an environment of smart and balanced regulation. Through the choices made today, Washington can help write another chapter in freight rail’s story of success—or close the book on an era of incredible infrastructure investment and widespread economic growth.
Misguided Proposals Undercut Important Public Policy Goals
Right now, some powerful freight rail customers are trying to convince the U.S. Surface Transportation Board (STB) to change the rules that have helped to make freight railroads one of America’s greatest success stories. One proposal, known as forced access, would require private rail companies to use their infrastructure—their tracks—for the benefit of competing railroads. Some shipper interests are also asking the STB to regulate the railroads’ return on investment—a measure critical to attracting new capital—by instituting caps on rates. These interventionist, re-regulation proposals stand in stark contrast to the free market principles that have allowed freight railroads to prosper and deliver for U.S. industry.
Ultimately, if adopted, these proposals could result in decreased investment, reduced productivity and a diversion of freight from freight rail’s privately funded network onto trucks operating on underfunded and overused roads.
By rejecting these misguided proposals, the STB can preserve the safe, efficient and cost-effective freight rail network that U.S. industry and consumers have come to rely on while preserving taxpayer funded infrastructure like roads and highways.
Together with tax reform that makes business more competitive, trade policies that both protect American workers and the benefits reaped by trade, and a regulatory environment that empowers private industry to find innovative solutions to shared goals, Washington can ensure that freight railroads have the resources to continue investing in a world-class rail network, and can keep America’s economy moving swiftly, affordably and safely for years to come.
*The Rail category of ASCE’s 2017 Infrastructure Report Card assessed both passenger and freight rail infrastructure. More than 70 percent of the miles traveled by Amtrak trains are on tracks owned by other railroads—mainly freight railroads—and many commuter railroads operate at least partially on freight-owned corridors.