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Long-term outlook for freight rail appears bright

As we reported yesterday, the trucking industry figures to lead the freight transport industry over the next decade. But what about the extreme long-te...

Freddie Pierce
|May 24|magazine7 min read

As we reported yesterday, the trucking industry figures to lead the freight transport industry over the next decade.

But what about the extreme long-term freight forecast? According to a roundtable discussion on the Wall Street Journal, freight rail experts are expecting freight rail to see spectacular growth over the next half-century.

Bill Rennicke of the Oliver Wyman Group told the Wall Street Journal that “If the traffic-level trajectories are correct, then ton-mile [one ton of paying freight shipped one mile] growth could be in the 80% range by 2035 to 2040, and on this basis, industry prospects are bright. Rail activity could possibly even double by the midpoint of the century.”

With population continuing to expand and a continued drive toward green business practices, freight rail is becoming a more and more attractive freight shipping option. A freight train is capable of moving 435 tons one mile on a single gallon of fuel, making it one of the greenest methods in freight transportation.

“The best thing railroads have going for them is their inherent efficiency, be it in land usage or energy consumption or cost of moving a ton mile of whatever needs to be moved,” Jim McClellan, vice president of railroad consulting firm Woodside Consulting, told the Wall Street Journal.

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In order to accomplish the expected expansion, however, the U.S. freight rail infrastructure needs major improvements. Because the United States has much better highway than rail capacity, freight rail continues to trail trucking by a significant margin in the freight transportation industry.

That will have to change if freight rail is ever going to get on track.

“Railroading is a complicated, network business that lacks the flexibility to be as responsive to sudden changes as trucks or planes can be,” Francis P. Muley, commissioner of the Surface Transportation Board in Washington, told the Wall Street Journal.

The United States continues to invest in upgrading its rail infrastructure, but those effects won’t be seen for years. Take comfort in knowing, however, that rail freight experts expect infrastructure improvement to eventually pay off.