Freight Railway Revenues and Investment in Infrastructure Soar/ Shipment of Crude Oil by Rail Is Intense and Controversial

Since their heyday in the 19^th and early 20^th centuries, rail lines in the United States experienced one disappointment after another. Until recently, trains slowly lost out to trucks and airplanes, which offer much more flexible, versatile and quicker modes of transport. Airplanes compete with trains both for freight and passengers. The decline of U.S. railroads started in the 1950s when interstate highways began construction, making trucks a viable alternative for freight transport. Trucks could go straight from factory to distribution center or store, whereas trains required shifting goods from rail car to truck in order to reach the final destination. Trucks had an additional advantage, given the federal government’s funding and management of highway construction, while railway companies manage their own tracks. Simultaneously, commercial airlines came onto the scene, offering faster passenger travel than anything yet experienced. Both of these factors signaled the decline of rail, and the industry slowly lost market share over the following decades. Train companies, struggling to compete in the shrinking industry, launched a spree of mergers in the 1980s and 1990s, leaving only a handful of major railways in North America. In 1955, about 1 million people were employed by U.S. railroads, compared to only 149,100 in January 2023.

Freight train operators have made great strides in efficiency in recent years through the use of precision scheduled railroading (PSR). PSR uses departure schedules and point-to-point delivery methods in order to lower operating ratios and consolidate railroad networks. Logistics software analyzes rail routes, freight cars and traffic patterns. For example, Norfolk Southern invested about $6 million in an in-depth analysis of operations that resulted in annual savings estimated at $100 million. Union Pacific launched technology in late 2019 that sends shippers notifications when railcars reach their destinations as well as services that combine container shipments with other kinds of commodities on one train.

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Freight Railway Revenues and Investment in Infrastructure Soar/ Shipment of Crude Oil by Rail Is Intense and Controversial, Business and Industry Trends Analysis

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