The State of U.S. Railroads

Book excerpt: The volume of freight transported in the United States is expected to double in the next 30 years. An increased use of rail freight could allow the supply chain to accommodate these increased volumes while minimizing highway congestion and improving energy efficiency in the transportation sector. Shippers and policymakers are concerned that the existing infrastructure--much diminished after decades of track abandonment--lacks sufficient capacity to accommodate the increased demand for rail freight. This report draws from publicly available data on the U.S. railroad industry to provide observations about rail infrastructure capacity and performance in freight transportation. Railroads have improved their productivity in the past three decades, mitigating immediate concerns about capacity, but concerns about future capacity constraints appear to be justified. Insufficient data exist to determine whether rail performance is now stable, significantly declining, or improving. The railroad system is privately owned and operated, but there is a public role for easing rail capacity constraints because private decisions about transportation investment and freight shipping have public consequences for safety and the environment. A better understanding of the public and private cost trade-offs between shipping freight by truck and by rail is needed. Improvements to data quality and freight-modeling tools will improve the ability for policymakers to better target public investment in the rail freight transportation system.