- 2017 will see approximately $22 billion worth of industry investment in privately owned U.S. railroads, the Association of American Railroads stated last week.
- The $22 billion – or roughly $60 million per day – involves improving not only tracks and locomotives, but also technology determined to improve safety.
- Among U.S. industries, freight railroads make capital expenditures six times greater than the average manufacturer. Recent statistics reveal that freight railroads also generated almost $274 billion in economic activity; $33 billion in state and federal taxes, and nearly 1.5 million jobs in 2014.
The railroad industry invests heavily in itself, but in varying degrees, leading to uneven improvement rates. Since 1980, railroads have spent more than $600 billion on themselves, yet there remain areas where upgrades are not only needed, but required.
Full implementation of Positive Train Control (PTC) technology, which aims to avoid head-to-head collisions, is due by the end of 2018, yet just 38% of freight locomotives are equipped, with only 12% of route miles PTC enabled — although 78% of radio towers have been installed and 50% of freight operators have been trained. Among Class I railroads, only BNSF has implemented the technology in over 40% of its locomotives.
So while the railroad industry certainly invests heavily in maintaining its own infrastructure, the investments may not be enough. A recent list of "high priority" infrastructure projects released by the Trump administration reveal just 3 rail projects of the total 50 accounted for 18% of the $137.5 billion in funding requested from the federal government. In other words, while $22 billion a year may seem like a lot, it is but a drop in the bucket for the infrastructure needs of the rail industry.
No wonder the Association of American Railroads has come out in strong support of the Trump administration's $1 trillion infrstructure plan, and nominee Elaine Chao. The challenge, however, will be balancing the nation's passenger rail needs with the freight rail needs — a long-standing division among railroads when requesting additional funding.