Major Investment Plans for American Rail Networks

Posted : 03/21/13 6:30 AM

With forecasts of significant growth in the quantity of goods that will be transported in the coming years it is vital that the intermodal freight networks continue to be developed and upgraded in order to be able to accommodate that increase. After enduring a period of decline the American rail network has seen a return to relevance in recent years as the road transport that had largely displaced rail became much more expensive. This focus on efficiency in freight transport has inspired redevelopment and expansion of the American rail networks as the cost effectiveness of rail freight continues to surpass trucking costs. This development of the American rail networks and freight handling facilities is being backed by an investment of $24.5 billion in the rail networks by the nation’s major freightrailroad companies. Of this, $13 billion is earmarked for capital expenditure to be used for the enhancement of their physical infrastructure and safety systems1 that is necessary to keep pace with the increased capacity being demanded of the system. This expenditure is being used in part to create more intermodal freight terminals to facilitate an ever greater efficiency of train to truck transfers. There are also significant investments being made by many companies in new rolling stock with the aim of increasing the overall capacity of the rail networks for transporting freight 2. Unlike many other transport networks, rail freight networks aren’t usually developed with government funding and so these developments have all been driven by increasing revenue over the past few years. In 2011, some rail companies reported an increase of 5% in the carloads, which in some cases has generated record revenues for the businesses concerned. Over this time the US rail networks have been spending around 17% of their revenue on developing their capital investments1 with new bridges, tracks and investment in cutting edge technology to coordinate their operations and to prepare them to deliver greater efficiency into the future. It is also estimated that the US rail network will create as many as 11,000 new jobs in the coming year. With 22% of its workforce eligible to retire in the next five years3 this trend seems set to continue. With jobs in a wide variety of professions from engineers to information technology professionals the rebirth of the American railroads will continue to contribute to the strengthening of the US economy as a whole as well. References: