Meeting the demands of the digital age

In the digital age, speed and efficiency are everything. Emails are delivered in the blink of an eye, supply chains are managed using just-in-time strategies, algorithms adjust GPS navigation systems in hundredths of a second and products are purchased with the click of a mouse and delivered nationwide the very next day.

Due in part to the on-demand nature of this modern economy, pressure on America’s transportation system is growing. In fact, the U.S. Federal Highway Administration estimates that total U.S. freight shipments will see a 45 percent increase by 2040.

Yet while demand continues to grow, increasing the capacity of our highways, runways and waterways is more difficult than ever before. Perhaps most noticeably, highway maintenance and construction have failed to keep pace with the growth in motor vehicle traffic, particularly as governments face shrinking budgets. As a result, many public officials are looking to private companies to innovate and invest to meet this growing demand for infrastructure and freight railroad companies are delivering.

Unlike other modes of freight transportation, railroads operate almost exclusively on infrastructure that they own, build and maintain themselves – a model of vertical integration that has allowed them to quickly respond to the growing capacity challenge. In the last decade, freight railroads have reinvested $209 billion of their own money to purchase new equipment and improve rail lines and facilities – from upgrading signal control systems, to replacing aging bridges and expanding the capacity of intermodal yards. Plus they are looking to spend another $26 billion in infrastructure and equipment in 2014. Railroads also use innovation to add additional capacity on the existing network. Trains have been improved to carry more cargo in a single journey, freight cars have been designed to carry specialized goods and sophisticated control systems have been installed to track and coordinate freight movement every step of the way.

Investments like these have not only kept America’s economy moving, but have kept prices low for businesses and consumers alike. From 1981 to 2013, average rail rates (measured by inflation-adjusted revenue per ton-mile) decreased by 42 percent. As a result, the average rail customer today can now ship nearly twice as much freight for almost same price that it paid more than 30 years ago – savings that can be passed on to the consumer.

In fact, freight railroads in the United States are the most affordable among the world’s major countries. According to data from the World Bank and other sources, U.S. freight rail rates are less than half those in major European countries and well below China and Japan as well.

Throughout history, railroads have worked to meet the needs of American businesses and consumers by growing rail network capacity and innovating to meet the demands of tomorrow. Today, America’s freight railroads continue to answer the call. By investing billions of dollars in private capital into the growth and modernization of their rail system, freight railroads are helping to solve a national transportation capacity crisis and keeping the economy moving to meet the demands of the digital age.

See how freight rail maintains our rail bridges.