Back on Tracks

Freight rail's renaissance is powering the U.S. economy even without Uncle Sam's help

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Gail Shotlander / Getty Images

Congress is gridlocked over infrastructure. On one side, Democrats want to invest in America. On the other side, Republicans want to tighten government’s belt. But there’s one more side to this story. U.S. freight railroads will get $23 billion worth of upgrades this year, and taxpayers won’t pick up the tab. That’s because the railroads build, maintain and improve their own infrastructure and even pay property taxes on their tracks. Also, freight trains are about three times as fuel-efficient as long-haul trucks, which means they help cut smog and reduce the U.S.’s carbon emissions and oil dependence. And forget those accident-prone trains your kids watch on Thomas the Tank Engine & Friends. In reality, shifting freight from roads to rails sharply reduces crashes and congestion.

We don’t think much about freight trains except when they make us wait at intersections or blow their horns while chugging through our towns. The industry evokes images of ruthless Gilded Age monopolies and hapless 1970s bankruptcies. But railroads are one of my favorite special interests–not because they’re less greedy or aggressive than other Washington lobbies but because what’s good for them really does tend to be good for us.

It’s not just that they are self-sufficient and fuel-efficient, employ 175,000 workers and have poured $500 billion into their trains, tracks and terminals since 1980. They are also quite literally the engines of our economy. America’s passenger rail is a global joke, but our freight rail is the envy of the world, carrying over 40% of our intercity cargo. Trains carry much less of Europe’s freight, which is why trucks clog Europe’s highways. And America’s rail-shipping rates are the world’s lowest, reducing the cost of doing business in the U.S.; they’ve fallen 45% in real dollars since the industry was deregulated three decades ago.

The right should love railroads because they’re proof that deregulation can work and the private sector can upgrade infrastructure. The left should love railroads because they fight global warming and provide union jobs. We all should love railroads because they bring us our stuff and keep prices down.

I love railroads because they’ve got all the right enemies. The welfare queens of Big Ag, who whine about government interference while relying on government handouts, want Congress to lower the prices railroads charge to ship their subsidized grain and ethanol. The similarly retrograde King Coal, which resists regulations that could stop it from poisoning our air and water, also clamors to reregulate freight rates. It’s amusing to see supposed fans of the free market–including a Koch brother who sued the railroads–seek government price controls on productive businesses (which would, of course, lead the railroads to reduce service and pull back on capital investments) in order to prop up their own uncompetitive businesses. Railroad competitors are almost as annoying as railroad customers: the trucking and barging industries perpetually lobby for government to widen highways and dredge rivers–pressuring it to get taxpayers to foot the bill for what the railroads cover for themselves.

Railroads are flourishing, attracting investors like Warren Buffett, and Association of American Railroads CEO Ed Hamberger says their main request of government is to be left alone to continue their renaissance. That said, President Obama provided unprecedented support for freight rail through his 2009 stimulus bill. (Yes, I always come back to the stimulus.) It didn’t include a freight-rail program, but the biggest grants in its Tiger competition–designed to promote transportation projects with the biggest economic and environmental bang for the buck–all went to freight-rail initiatives that will unclog the arteries of U.S. commerce.

These days, Congress won’t spend the bucks on infrastructure, regardless of the bang. But quietly railroads keep spending their own bucks. In an era of austerity, progress chugs along slowly and rarely blows its horn.

2 comments
mahameed40
mahameed40

I want to know whether Michael Grunwald is the son of Henry Grunwald, former Managing Editor of Time. I have something very intertestin to tell him about his father.