Solutions

  • Integrate rail into a national multimodal transportation policy that recognizes and takes advantage of efficiencies;
  • Improve passenger rail as an alternative to air and automobile travel;
  • Increase and expand Amtrak’s corridor services linking major cities less than 500 miles apart.

Conditions

Freight Rail

The U.S. freight rail system is comprised of three classes of railroad companies based on annual operating revenues:  8 Class I freight railroad systems; 30 Class II regional or short-line railroads; and 320 Class III or local line-haul carriers. 1

Approximately 42% of all intercity freight in the United States travels via rail, including 70 percent of domestically manufactured automobiles and 70 percent of coal delivered to power plants. 2  As of 2006, Class I railroads owned and operated 140,249 miles of track 3. However, most traffic travels on approximately one-third of the total network, which totals 52,340 miles.

After years of shedding excess capacity, railroads have been increasing infrastructure investment and spending in recent years. In 2006, overall spending on rail infrastructure was $8 billion, a 21% increase from 2005. 2  More specifically, spending on construction of new roadway and structures increased from $1.5 billion in 2005 to $1.9 billion in 2007. 4  Increased spending on maintenance of railroad networks and systems has become necessary as investments are made in more costly signaling technology, heavier rail, and the improved substructure necessary to accommodate heavier trains. 3

Demand for freight transportation is projected to nearly double by 2035—from 19.3 billion tons in 2007 to 37.2 billion tons in 2035. 4 If current market shares are maintained, railroads will be expected to handle an 88% increase in tonnage by 2035. 4  However, as many look to rail as a more efficient and environmentally friendly freight shipper, rail’s market share could increase and lead to additional increases in freight rail tonnage.

An estimated $148 billion in improvements will be needed to accommodate the projected rail freight demand in 2035. 4 Class I freight railroads' share of this cost is estimated at $135 billion. 4 Through productivity and efficiency gains, railroads hope to reduce the required investment from $148 billion to $121 billion over the period 2007 through 2035. 4

Passenger Rail

Amtrak, the nation's only intercity passenger rail provider, carried 28.7 million riders in fiscal year 2008, an 11.1% increase from fiscal year 2007. 5Further, the 2007 ridership represented a 20% increase from the previous five years. 5 Corridor services linking major cities less than 500 miles apart, such as Milwaukee-Chicago, Sacramento-San Francisco-San Jose and the Northeast Corridor, are experiencing the fastest growth. 5

Increased ridership has led to increased revenue, and Amtrak received $1.355 billion in federal investment in fiscal year 2008.  However, an additional $410 million in immediate capital needs have been identified, including acquiring new cars to add capacity.  In addition, upgrades to comply with the Americans with Disabilities Act (ADA) and improve overall conditions of the 481 stations in its network are estimated at $1.5 billion. 6

While electrical power in the Northeast Corridor cushioned some of the blow of increased fuel prices in 2008, it also represents a major infrastructure challenge for Amtrak. Upgrading the electrical system in the Northeast Corridor, parts of which were installed in the 1930s, is among the immediate needs identified. Failure of these critical systems could bring the entire line to a halt, which would impact not only Amtrak, but also the eight commuter railroads that share the Northeast Corridor. 6

Amtrak anticipates reaching and exceeding capacity in the near future on some routes. For example, approximately half of trains traveling on one northeast regional line were 85% full and 62% were at least 75% full during one week in July 2008. Even though the current economic downturn has dampened growth, trains will soon reach capacity as the economy rebounds and the growth patterns of recent years are reestablished, and the fleet of cars and locomotives continues to age. 6

In the long term, the Passenger Rail Working Group (PRWG), which was formed as part of the National Surface Transportation Policy and Revenue Study Commission, determined that an annual investment of $7.4 billion through 2016, totaling $66.3 billion, is needed to address the total capital cost of a proposed intercity rail network.  It is further estimated that an additional $158.6 billion is needed between 2016 and 2030 and an additional $132.3 billion between 2031 and 2050 to achieve the ideal intercity network proposed by the PRWG. 5 These costs do not include the mandated safety upgrades for freight rail lines that carry both passenger as well as freight traffic and for those routes that carry toxic chemicals as required by the Rail Safety Improvement Act of 2008. 7

While the investments set forth by the PRWG are significant, the benefits would be significant as well. The PRWG estimated a net fuel savings of nearly $4 billion per year by diverting passengers to rail if the proposed vision was adopted. 5 In addition, the investments would reduce the need for even greater capacity investments in other modes.

Intercity passenger rail faces particular concerns not faced by other modes of transportation, such as the lack of a dedicated revenue source. Amtrak owns and/or operates 656 miles of track that are maintained and upgraded using funds from its general operating budget, impacting its ability to fund other projects. The annual congressional appropriations process has provided minimal funding in recent years, leading to a major backlog of deferred track maintenance on the track that Amtrak owns and operates, more than half of which is shared with commuter and freight railroads. For the remainder of its 21,095-mile network, Amtrak relies on freight rail lines that make maintenance and upgrade decisions on the basis of their own business models and shareholders' interests while preserving Amtrak’s statutory rights for access. Freight and passenger rail interests are becoming more aligned as both require increases in rail network capacity, but successful alignment of interests will require both a public and private investment. 5

Resilience

Because of its efficiency and reduced energy consumption, rail is an important component of the nation’s transportation network, supporting the economy through both commerce and tourism. But due to a lack of adequate investment, limited redundancy, intermodal constraints, and energy system interdependencies, the rail system is not resilient. Current rail security strategies are risk-based as determined by corridor assessments, corporate security reviews, intelligence analyses, and objectively measured risk metrics. To improve resilience, future investments must address life-cycle maintenance, rapid recovery, multihazard threats and vulnerabilities, and technological innovations.

Conclusion

Rail is increasingly seen as a way to alleviate growing freight and passenger congestion experienced by other modes of transportation. In addition, rail is a fuel efficient alternative for moving freight long distances.

Anticipated growth over the coming decades, as well as demographic shifts, will tax a rail system that is already reaching capacity in some critical bottlenecks. A substantial investment in rail infrastructure will maximize efficiencies and ultimately reap broad benefits for passengers, shippers, and the general public. 
 

Sources

  1. House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials, Staff Report for Subcommittee Hearing, January 28, 2009.
  2. “Freight Railroads:  Industry Health Has Improved, but Concerns about Competition & Capacity Should Be Addressed”, Government Accountability Office, October 2006
  3. Weatherford, Brian A., Henry H. Willis, David S. Ortiz, The State of U.S. Railroads:  A Review of Capacity and Performance Data, Rand Supply Chain Policy Center, 2007
  4. National Rail Freight Infrastructure Capacity & Investment Study, Cambridge Systematics, Inc., September 2007
  5. Vision for the Future:  U.S. Intercity Passenger Rail Networking Through 2050, Passenger Rail Working Group, December 2007
  6. Crosbie, William L., “Testimony before House Transportation and Infrastructure Committee”, October 29, 2008
  7. “The Rail Safety Improvement Act of 2008”, P.L. 110-432
  8. Alameda Corridor Transportation Authority, Alameda Corridor Project Fact Sheet, accessed February 11, 2009.
  9. “About CREATE,” Chicago Region Environmental and Transportation Efficiency Program Web site, accessed February 11, 2009.
  10. Amtrak Government Affairs, “Amtrak FY 2007 State-by-State Fact Sheets”, February 2008
  11. National Railroad Passenger Corporation, 2007 Annual Report
  12.  Kummant, Alex, President and CEO of Amtrak, “Statement Before the Subcommittee on Railroads of the House Transportation and Infrastructure Committee,” June 12, 2007.

Other Resources:

  • “Principles on Federal Funding of Freight Rail”, American Association of Railroads, August 2008
  • Intercity Passenger Rail Transportation:  2008 Update, American Association of State Highway and Transportation Officials, Standing Committee on Railroad Transportation, 2008
  • American Association of Railroads, Freight Rail Works series, http://www.freightrailworks.org
  • U.S. Department of Transportation, Fiscal Year 2009 Budget in Brief
  • Congressional Budget Office, “The Past and Future of U.S. Passenger Rail Service: Amtrak’s Interconnections with Freight and Commuter Railroads,” September 2003.
  • “Approaches to Mitigate Freight Congestion”, Government Accountability Office, November 2008