Can the Railroad Come Back?

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At one time riding the rails was a delightful way to travel; quick and easy as well as a reasonable and profitable way to move goods. Something happened over the last 50 years. Some people objected to railroads as unsightly. They also became crowded and in many cases run down. A new report prepared by the Worldwatch Institute and the Apollo Alliance, Global Competitiveness in the Rail and Transit Industry, draws on lessons from dominant international rail manufacturing countries to conclude that greater investment in the U.S. rail industry could revive America’s former leadership in the world rail industry—and potentially create hundreds of thousands of jobs.

Rail transport is the means of conveyance of passengers and goods by way of wheeled vehicles running on rail tracks. In contrast to road transport, where vehicles merely run on a prepared surface, rail vehicles are also directionally guided by the tracks they run on. Track usually consists of steel rails installed on ties and ballast, on which the rolling stock, usually fitted with metal wheels.

One of the earliest evidence of a railway was a 3.7 miles Diolkos wagonway, which transported boats across the Corinth isthmus in Greece during the 9th century BC. Trucks pushed by slaves ran in grooves in limestone, which provided the track element. The Diolkos ran for over 600 years.

Today, most rail transport in the United States is based in freight train shipments. The U.S. rail industry has experienced repeated convulsions due to changing U.S. economic needs and the rise of automobile, bus, and air transport. Despite the difficulties, U.S. railroads carried 427 billion ton-miles of cargo annually in 1930. This increased to 750 billion ton-miles by 1975 and doubled to 1.5 trillion ton-miles in 2005. In the 1950s, the U.S. and Europe moved roughly the same percentage of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8% of freight traveled by rail.

As early as the 1930s, automobile travel had begun to cut into the rail passenger market, somewhat reducing economies of scale, but it was the development of the Interstate Highway System and of commercial aviation in the 1950s and 1960s, as well as increasingly restrictive regulation, that dealt the most damaging blows to rail transportation, both passenger and freight. Soon, the only things keeping most passenger trains running were legal obligations. Meanwhile, companies who were interested in using railroads for profitable freight traffic were looking for ways to get out of those legal obligations, and it looked like intercity passenger rail service would soon become extinct in the United States beyond a few highly-populated corridors.

Case studies of four of the leading countries in intercity rail and urban transit—Germany, Spain, Japan, and China—illuminate a set of common principles that those countries have used to nurture and grow some of the largest, most successful railroad manufacturing companies in the world. Among them are:

  • Sustained, long-term national investment in rail and transit far and above the one-time injection of $8.3 billion provided by the 2009 American Recovery and Reinvestment Act. In terms of investment in rail infrastructure, the United States currently lags far behind countries like Austria, the Netherlands, and Russia, and just ahead of Turkey.
  • Commitment to protecting and nurturing young industries until they have achieved the economies of scale necessary to compete globally. All of the countries in the report were served for decades by strong and competent national rail monopolies, which helped ensure robust demand for rail products and technologies.
  • A national vision that ensures that rail development will be linked with other forms of urban transit; use an integrated, uniform system of operations; provide extensive geographic coverage; and be well run. The report shows that systems that do this help produce a strong domestic market for rail transit, thus ensuring continued growth.

“Growing a strong rail transit industry demands large and sustained capital investment combined with national vision. Rail ridership in the U.S. is going up, but that demand alone won’t generate the private investment necessary to compete globally,” author Renner said. “The federal government needs to be committed to building a strong, national system with competitive prices, solid geographic reach, and reliable trains. If it does that, not only will people ride it, but the United States will create hundreds of thousands of new jobs as well as internationally competitive companies.”

The report contains a wealth of facts and statistics that show the U.S. position relative to other countries, as well as the potential for growth. Some are shown below.

  • The global market for passenger and freight rail equipment, infrastructure, and related services was $169 billion in 2007 and is projected to grow to $214 billion by 2016.
  • China invests far and above the most money in its rail network relative to its economy, spending $12.5 dollars for every $1,000 of GDP. In contrast, the United States spends $0.8 dollars per $1,000 of GDP.
  • By 2015, the number of high-speed train sets in operation worldwide is expected to rise by 70 percent.
  • European high-speed rail travel grew from 9.3 billion passenger miles in 1990 to 61 billion passenger miles in 2008.
  • Measured in passenger miles, Spanish rail travel increased 55 percent between 1990 and 2008, far outstripping population growth.
  • Spain will double the length of its high-speed rail network over the next three years, to 2,136 miles by 2012. Government plans call for an expansion to 6,200 miles of high-speed track by 2020.
  • Germany’s rail transit and related construction and operations industries employ some 580,000 people.
  • Total passenger miles for rail transit in Japan increased 29 percent between 1980 and 2007, while population expanded by just 9.1 percent.

In order to change US policies towards railroads must change. The benefits are improved efficiency, lower costs for delivered good, and, in some vase, reduced pollution

For further information, visit Worldwatch. For the full copy of the report, email rsimon@worldwatch.org.

Article by Andy Soos, appearing courtesy ENN.

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