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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

Since their heyday in the 19th and early 20th 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.
Another way railroads are increasing efficiency is to add cars, making trains 10% to 15% longer.  This allows more freight to be transported per train, while fewer trains overall reduces fuel consumption and staff requirements.
Logistics analysis has enabled rail companies to dramatically improve operating efficiencies through well engineered revisions.  Among these are the formerly unreliable schedules of trains caused by waiting for full loads.  This scheduling required that some cars wait in a train-yard for days.  Companies such as Burlington Northern, the second-largest railway company in the U.S., and the Canadian National Railway Co., the leading railway in Canada, now offer set schedules for train departures.  If the train isn’t fully loaded, it moves anyway, for the sake of getting the cars it does have loaded to their destination on time.
In addition, railways are increasing the use of advanced information technology.  Radio frequency identification (RFID) tags have made a major break into rail systems.  There is tremendous potential in the use of RFID by train operators.  With a tag on each train car or freight container, a tag reader at every terminal and central databases monitored by dispatchers, trains and their cars can be monitored remotely and individual cars and containers can be tracked effortlessly.  This system has been instituted in almost every line and on every car, adding an immense amount of efficiency to the entire rail system.  In contrast, only a few years ago, dispatchers were monitoring trains with paper and pencil, making any centralized data collection virtually impossible.  In addition, engineers now have headsets and can communicate with dispatchers over a national private telecommunications network.  Other installations include systems to help trains run more smoothly and fuel-efficiently, including computerized power control, GPS mapping of train routes and remote-controlled locomotives.  All of these technical innovations are helping trains keep on schedule, use less fuel and prevent delays and accidents.
Strides are being made in autonomous trains as part of a$10 billion, 12-year safety upgrade to North American rail systems ordered by the U.S. Congress.  Called Positive Train Control (PTC), the program calls for sensors on tracks and switches that relay data to central servers.  Should engineers fail to respond to a dangerous situation, the system can override him or her.  In September 2019, an autonomous freight train with three locomotives and 30 loaded freight cars traversed 48 miles of test track in Pueblo, Colorado solely by computer control.  In Australia, mining company Rio Tinto uses fully autonomous trains to carry iron ore from 16 mines over hundreds of miles.

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