Railroads Must Keep Pace With The Economy

Transportation is ne'er sexy, but it is an integral portion of our economy. In 2024 proscription accounted for astir $1.7 trillion aliases astir 6 percent of U.S. GDP. While astir of america do not recognize it, proscription costs are imbedded successful everything we buy.

America’s railroads are a large portion of nan proscription equation, delivering complete 1.5 cardinal tons of freight each year. But, for illustration each different conception of our economy, railroads request to perpetually summation productivity and little operating costs to support up pinch nan competition: trucking, aerial cargo, h2o transport, and pipelines. More importantly our railroad strategy needs to beryllium world people to support U.S. companies competitory and thief present higher surviving standards for each Americans. As America tries to “reshore” manufacturing railroads will play an moreover bigger portion successful nan U.S. economy. But, will nationalist argumentation let railroads to support up pinch an ever-changing economy?

As a networked manufacture pinch monolithic finance successful track, railbed, and different infrastructure, railroads trust connected immense amounts of freight from various segments of nan system to make their systems run. Railroads put astir $23 cardinal dollars annually to support and grow track, railyards and equipment. Thus, chemic shippers are reliant connected ember movements, and cultivation shippers are reliant connected those moving building materials to make capable gross to continuously reinvest. Accounting for astir 25 percent of railroad revenues, each railroad customers, particularly those shipping bulk commodities, trust connected intermodal movements to thief support railroads viable financially.

Intermodal movements tin easy beryllium diverted to truck. In fact, each intermodal movements will extremity up connected our roads and highways for pick-up, last transportation aliases both. Railroads supply conscionable nan linehaul information — movements of hundreds aliases sometimes thousands of uninterrupted miles that are railroad’s breadstuff and butter. But, if it originates aliases ends connected nan highway, it tin easy beryllium diverted to each road if nan value is right.

Unfortunately, these intermodal shipments and different railroad freight are astatine consequence of being diverted to each motortruck road movements wrong nan adjacent fewer years. Trucking, peculiarly nan linehaul segment, is astir to acquisition a gyration successful really trucks tin beryllium operated that will return billions successful costs retired of nan trucking system. Currently, drivers are nan costliest constituent successful nan long-haul trucking equation, accounting for astir 44 percent of full costs. But, autonomous conveyance exertion is truthful precocious that location are already tractor trailer trucks being tested connected highways successful Texas, New Mexico, and Arizona.

At nan very clip truckers are connected nan verge of adopting driverless technology, Class I railroads, our nation’s largest railroads, are saddled pinch nan Federal request that each trains must run pinch 2 personification crews. The request was passed by nan Federal Railroad Administration (FRA) successful April 2024, contempt location being nary grounds correlating unit size pinch railroad safety. Prior to implementation of nan two-person rule, unit sizes were wished by nan railroads successful conjunction railroad labour unions. As 1 mightiness expect, unit sizes declined from 5 successful nan 1950’s arsenic railroad exertion advanced.

So, nan railroads biggest competitor will soon perchance spot a 44 percent simplification successful costs from nan preamble of autonomous vehicles while railroads are Federally stiff successful clip pinch 2 personification crews.  Studies person shown that reductions successful trucking costs tin easy divert railroad traffic. In fact, 1 study from 2020 showed that a 34 percent simplification successful motortruck costs would trim intermodal postulation by complete 50 percent. One tin expect a akin effect from nan cognition of autonomous trucks if railroads do not person nan elasticity to rationalize unit sizes.

What tin nan railroads do? A bully spot to commencement would beryllium transition of nan Train Crew Choice Act (H.R. 5135) introduced by Rep. Eric Burlison (R-MO). The authorities would repeal FRA’s 2 unit request and let railroads’ elasticity to find train staffing levels.

Additionally, nan Surface Transportation Board should o.k. nan projected merger betwixt nan Union Pacific and Norfolk Southern railroads. The UP-NS merger is projected to destruct 1 cardinal carload interchanges each year, redeeming an mean of 2 days of useless clip successful obstruction yards, allowing for amended work and reduced costs.

American shippers bargain proscription arsenic portion of nan manufacturing process and to present equipment to American and world customers. No 1 really cares really your widget of prime ends up astatine its destination. Cost and work reliability are what matter. Eliminating nan two-person unit request and allowing nan UP-NS merger to spell done will thief summation railroad productivity and let nan railroad strategy to support up successful an ever much competitory world.

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David M. Ozgo is Executive Director of nan Center for Transportation Advancement and President of Advocacy Analytics LLC. He tin beryllium reached astatine [email protected].