The U.S. needs more transportation, and it needs it now. Highways, railways, ports and airports are all straining to keep up with demand. Bad as conditions are now, they will only get worse without prompt, forward looking action. At the same time, we need to find solutions to a number of environmental issues that are tied to transportation.
There is no single solution. Futuristic technology like Maglev may have a role to play, but the cost would be immense and would largely come from public sources. The technology itself is unsuited for the mix of heavy bulk commodity trains, swift merchandise freight trains and fast passenger trains that ply the nation’s rails. So if we are to keep today’s transportation problems from becoming tomorrow’s transportation crisis, rail must be part of the solution.
Railroads help reduce fuel consumption. Last year, trains moved a ton of freight an average of 436 miles per gallon of diesel fuel – the equivalent of moving it from Baltimore to Boston on just one gallon. On average, freight trains are three to four times as fuel-efficient as trucks.
According to the U.S. Environmental Protection Agency, freight trains are also cleaner than trucks, emitting only a third as many greenhouse gases to move the same volume equivalent distances. Freight trains also help beat congestion. A single intermodal train can take 280 trucks off the highways.
Freight trains save money for taxpayers and consumers. The American Association of State Highway and Transportation Officials says that if all rail freight traffic were shifted to trucks tomorrow, current rail shippers would pay an additional $69 billion per year and an extra $128 billion would have to be spent on highway improvements.
Demand for rail service is growing. The two busiest years in history for freight railroads were 2006 and 2007, and Amtrak recently announced that its 2008 fiscal year was the busiest in its history. Commuter railroads across the country are also reporting large passenger increases.
Yet one major stumbling block lies in the path of growth for both freight and passenger rail: capacity, or more accurately, lack of it. Portions of the rail network are already approaching capacity. With the demand for rail transportation expected to almost double by 2035, conditions will worsen unless capacity is increased.
Railroads already invest heavily to renew the system and increase capacity. Over the past 10 years, almost 18 percent of their revenues have gone into improvements, compared with less than 4 percent on average in manufacturing.
Yet by itself, even that amount isn’t enough. A Cambridge Systematics study last year found that $148 billion needs to be invested to expand capacity in the freight rail network by 2035 to keep up with demand. The good news is that freight railroads can raise at least 70 percent of that amount by themselves, according to the study. The bad news is that a gap of $1.4 billion a year between what can be invested and what should be invested remains.
One way to help bridge the gap is through a modest program of tax incentives. Bi-partisan legislation proposed in this Congress would extend a 25 percent incentive to anyone who invests in projects that add capacity to the nation’s rail network.
Another way is through public-private partnerships in which the public pays for public benefits and the private sector pays for its benefits. A number of public-private partnerships to expand both freight and passenger rail capacity have already been successfully developed in California, the Pacific Northwest, Chicago, North Carolina and between the East Coast and the Midwest.
America’s future prosperity depends heavily on transportation. Expanding rail capacity will help insure that prosperity while providing environmental benefits. The time to expand rail capacity is now.
Edward R. Hamberger, a former assistant secretary of transportation, has been president and CEO of the Association of American Railroads since 1998.
