The Case for Local Rail: Revitalizing America's Freight Network

The Decline of American Rail Infrastructure

Rail service in the United States is in crisis. Since 1990, the active rail network has shrunk by 25%, with much of that loss occurring in rural areas. This decline is particularly stark when viewed historically. According to the Federal Railroad Administration, there are currently fewer than 140,000 rail-route miles compared with a peak of 261,871 miles in 1925. The impact of this difference is evident in current transportation patterns. For example, the 2023 Bureau of Transportation Statistics indicate that 2.5 times more 2000-mile goods are moved by trucks as compared with rail.

Root Causes of Local Rail Service Decline

The loss of local rail service across in the United States can be attributed to several key factors:

• Public policies that have consistently favored larger transportation projects and operations
• Regulatory frameworks that create barriers for smaller rail operations
• Financial metrics, incentives, and offers that prioritize large-scale transactions
• Economic development approaches that overlook the value of local rail infrastructure
• Systematic demarketing of branch-line rail service in favor of major corridors

Challenging the Status Quo

The current focus on higher-volume shipping lanes and large shippers has largely come at the expense of rural, urban, and direct rail service as well as increased local truck traffic, all of which have contributed to stagnant or declining economic growth in affected areas. Moreover, this situation presents a significant barrier to revitalizing these economically challenged towns and regions across the United States.

A New Vision for Rail Service

To address this state of affairs, we need to embrace a new principle. We must acknowledge that every transaction matters, every community counts, and that every small town, railroad, and shipper deserves attention. This principle challenges the common misconception that trucks are a more flexible means of transporting freight when compared with rail service. Just as trucks require roads, trains go wherever we build tracks. Now is the time to shift from ignoring or tearing up existing infrastructure to improving and expanding the network and integrating each land transportation mode.

The Economic Case for Smaller Railroads

Smaller railroads and shorter rail movements are more relevant than ever in today's economy. However, these operations face significant challenges due to:

• Limited private-sector funding options
• Government programs oriented toward larger projects
• The misconception that local rail operations are too costly
• Failure to account for the superior efficiency of rail car loading and unloading versus trucks

The Role of Class I Railroads

Major railroads must collaborate with Class II and III operators to provide the local and direct rail service that rural communities need for resilient, sustainable economic development. This collaboration should include:

• Facilitation of multi-rail line access
• Competitive pricing for multi-railroad routes
• Car supply and service that encourages smaller and start-up rail shippers

Beyond Competition: A Call for Collaboration

The current challenges in rail infrastructure reveal a fundamental problem with capitalism's emphasis on commercial and political competition over collaboration. Competition alone is an insufficient regulatory principle for large infrastructure systems. We must reorient our commercial activity and public policy to support benefits for more stakeholders rather than just individual winners.

A Path Forward

Creating comprehensive growth for freight rail transportation requires:

• Coordinated government support for infrastructure projects
• Improved access to funding for private-sector equipment and growth
• Equal distribution of capital throughout the entire rail system
• Reversal of branch line network decline
• Commitment to serving all communities, regardless of size

Only by incorporating all regions and shipment sizes can we achieve a stable, lasting expansion of rail service that benefits everyone. The future of North American rail depends on our ability to return to serving as many towns, cities, and shippers as possible.