Click the video to watch a recent CBS News piece on the growing use of passenger rail
Retailers of scale like Wal-Mart and Target survive on small margins. The rate of profit may be small, but selling a bazillion units of everything adds up to a tidy sum at the end of the day. In the case of Wal-Mart, their business model is based on keeping costs as low as possible, and requiring their suppliers to reduce costs each year as well.
As we enter into an era of rising energy prices, it’s becoming much more expensive to get all of those imported goods by truck from Baltimore and Long Beach to all those distribution centers in the middle of the country. And companies that thrive on just-in-time shipping via diesel-powered tractor-trailer are seeing the cost of fuel cut into their slim margins.
If only there was some more efficient way to move all of those goods across the country that saved fuel and reduced emissions in the process…
The Wall Street Journal featured a story last week on the massive capital improvements going on in the freight rail industry across the country, as many of the railroad companies are investing in new track and new corridors:
For the first time in nearly a century, railroads are making large investments in their networks — adding sets of tracks, straightening curves that force engines to slow and expanding tunnels for bigger trains. Their campaign is altering the corridors of American commerce, more so than any other development since interstate highways spread to the interior.
For decades, railroads spent little on expansion, even tore up surplus track and shrank routes. But since 2000 they’ve spent $10 billion to expand tracks, build freight yards and buy locomotives, and they have $12 billion more in upgrades planned.
The buildout comes as the industry transitions away from its chief role in recent decades of hauling coal, timber and other raw materials in manufacturing regions. Now, increasingly, railroads are moving finished consumer goods, often made in Asia, from ports to major cities. Their new higher-volume routes, called corridors, often serve the South, where the rail system is less developed and the population is rising.
Railroad operators are pressing for advantage over their main competitor, long-haul trucking, which has struggled with rising fuel prices, driver shortages and highway congestion. Railroads say a load can be moved by rail using about a third as much fuel as it takes to haul it by truck. And rail transport is becoming more efficient still, they say, as operators speed their lines and logistics companies build huge warehouse areas along routes.
Unfortunately, the implications this expansion has for intercity passenger rail are left out of the discussion. Delays in part within many corridors are due to the fact that Amtrak has to lease track space from the freight-centric rail companies, which have first priority in many cases.
(update: See this story about a commuter rail vs. freight rail situation in Central Florida)
So investing in new freight corridors can be a good thing for passenger rail, as it reduces congestion on some existing corridors with heavy passenger traffic. But there’s no question that we need a comparable investment in new tracks, new right-of-way, and new moving stock dedicated to intercity passenger rail — where rail travel can really shine.
Increasing the federal funding for Amtrak and specifically intercity rail travel in the next transportation bill would be a good place to start. The funding is still at 1980 levels, when oil was well under 20 dollars a barrel and climate change was a fringe notion that most Americans didn’t care about. We need a more sustainable solution than simply adding a lane on each side of Interstate 95 on the east coast, as one presidential candidate suggested.
Build it and people will most definitely ride it. As a gentleman says in the video, “If we had high-speed rail service in the United States, we’d never get on another airplane.”