The Case for Local Rail: Revitalizing America's Freight Network

The Decline of American Rail Infrastructure

Since 1990, the United States rail network has shrunk by 25%, with much of that loss occurring in rural areas. This decline is particularly stark when viewed historically: while there were 261,871 U.S. rail route miles in 1925, the Federal Railroad Administration now identifies current rail route mileage as less than 140,000. The impact is evident in current transportation patterns, where the market share for U.S. 2000-mile goods movements is 2.5 times more for trucks than rail, according to the 2023 Bureau of Transportation Statistics.

Root Causes of Local Rail Service Decline

The loss of local rail service across North America can be attributed to several key factors:

• Public policies that have consistently favored larger transportation projects and operations
• Regulatory frameworks that create barriers for smaller rail operations
• Financial metrics, incentives, and offers that prioritize large-scale transactions
• Economic development approaches that overlook the value of local rail infrastructure
• Systematic demarketing of branch-line rail service in favor of major corridors

Challenging the Status Quo

The current focus on higher-volume shipping lanes and large shippers has created a false dichotomy. This emphasis need not come at the expense of rural, urban, and direct rail service, nor should it result in increased local truck traffic. The present situation merely adds a significant barrier to revitalizing economically challenged towns and regions across North America.

A New Vision for Rail Service

We need to embrace a new principle: it always makes sense to do the small deals. Every transaction matters, every community counts, and every small town, railroad, and shipper deserves attention. This principle challenges the common misconception about rail's inflexibility compared to trucks. Just as trucks require roads, trains go where we build tracks. The solution isn't to tear up existing infrastructure but to expand it and integrate different transportation modes.

The Economic Case for Smaller Railroads

Smaller railroads and shorter rail movements are more relevant than ever in today's economy. However, these operations face significant challenges due to:

• Limited private-sector funding options
• Government programs oriented toward large transactions
• The misconception that local rail operations are too costly
• Failure to account for the superior efficiency of rail car loading and unloading versus trucks

The Role of Class I Railroads

Major railroads must collaborate with Class II and III operators to provide the local and direct rail service that rural communities need for resilient, sustainable economic development. This collaboration should include:

• Facilitation of multi-rail line access
• Competitive pricing for multi-railroad routes
• Support for "competing" railroads' service to enhance the entire network's value

Beyond Competition: A Call for Collaboration

The current challenges in rail infrastructure reveal a fundamental problem with capitalism's emphasis on commercial and political competition over collaboration. Competition alone is an insufficient regulatory principle for large infrastructure systems. We must reorient our commercial activity and public policy to support collective benefit rather than individual winners.

A Path Forward

Creating a comprehensive growth model for rail transportation requires:

• Coordinated government support for infrastructure projects
• Improved access to funding for private-sector equipment and growth
• Equal distribution of capital throughout the entire rail system
• Reversal of branch line network decline
• Commitment to serving all communities, regardless of size

Only by incorporating all regions and shipment sizes can we achieve a stable, lasting expansion of rail service that benefits everyone. The future of North American rail depends on our ability to return to serving as many towns, cities, and shippers as possible.