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 railroads.

The Problem With 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. In addition, the uptick in truck traffic represents a significant burden on the U.S. highway system's aging infrastructure by increasing traffic volume and weight, leading to faster deterioration and soaring congestion. Together, these factors have contributed to stagnant or declining economic growth in affected areas and present a significant barrier to revitalizing these economically challenged towns and regions across the United States.

Factors Affecting Local Rail Service

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

• Public policies that have consistently favored larger transportation projects and operations
• Entrenched 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

Challenges Facing Smaller Railroads

Smaller railroads and shorter rail operations continue to face significant impediments 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 compared with trucks

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 every small town, railroad, and shipper deserves attention. This vision 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 the existing rail infrastructure to improving and expanding the network and integrating it with each land transportation mode.

Class I Railroads Can Lead the Change

Major Class I 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 multiple railroad routes
• Rail 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 as opposed to individual winners.

The 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
• More equitable distribution of capital throughout the entire rail system
• Reversal of branch-line network decline
• A commitment to provide rail service for 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 embrace this vision and make a commitment to serve as many towns, cities, and shippers as possible.