By Michael Sussman, CEO, Strategic Rail Finance, with J. Vann Cunningham, former Assistant VP, BNSF Railway

A Framework for Rural Economic Renaissance

Rural communities across North America face significant economic development challenges. The prevailing approach often centers on attracting large industrial players to metropolitan areas—a strategy that frequently leaves smaller communities behind. However, there’s another path forward: strategically designed rail corridors that empower small to mid-sized businesses, creating interconnected economic ecosystems across entire regions.

This innovative approach has shown promise in Mississippi, where Strategic Rail Finance recently evaluated the feasibility of rebuilding the Great River Railroad (GTR) to serve the Port of Rosedale. Our recommendations offer more than just local solutions; they provide a nationwide blueprint for rural economic revitalization.

The Rural Rail Paradox

While America’s population has more than doubled since 1920, rail route mileage has nearly halved. This contraction has disproportionately affected rural communities, limiting their ability to attract businesses and forcing an overreliance on trucking. The economic and infrastructure consequences have been severe: damaged roads, increased maintenance costs, air quality issues, lost economic development opportunities, and a diminished quality of life.

The contrast becomes evident when examining success stories like Columbus, Mississippi—a thriving industrial hub positioned at the strategic intersection of highways, waterways, and multiple rail arteries. Similarly, Grenada, Mississippi, demonstrates the transformative power of rail restoration, having attracted significant new manufacturing investment following the revitalization of the Grenada Railroad. These examples aren’t outliers—they’re proof that robust rail infrastructure serves as the backbone of sustainable rural prosperity.

Rail-Enabled Rural Economic Development: A Different Approach

Success in less populated rural areas requires a development approach that differs from what serves larger urban centers. Key features of this approach include:

1. Attracting smaller businesses than are targeted by typical economic development plans
2. Focusing on existing businesses and their growth opportunities, not just new prospects
3. Aggregating needs across businesses to create viable service plans and infrastructure investments
4. Emphasizing regional opportunities for developing natural resources
5. Addressing gaps in transportation services
6. Developing plans for entire industrial systems and supply chains
7. Optimizing infrastructure by designing across whole corridors and regions while repurposing existing facilities and brownfield properties
8. Connecting businesses as customers and suppliers in synergistic commerce
9. Bridging coordination gaps between transportation modes
10. Ensuring community involvement in planning to align development with local values and needs

The Value of Collaborative Infrastructure Development

Traditional infrastructure planning suffers from siloed thinking. Projects often serve the narrowest stakeholder groups, and systems thinking is nearly absent. The Mississippi rail assessment employed what we call “Collaborative Infrastructure Development”—an approach that bridges gaps in understanding and coordination among businesses, governing jurisdictions, and public/private sectors.

This collaborative method yielded valuable discoveries. For example, Steel Dynamics in Columbus is building a biomass-fueled power generator while planning to source feedstock from out of state—yet in-state wood products industries struggle with an oversupply of biomass. Connecting these parties would benefit multiple sectors and Mississippi’s overall economy.

Similarly, while assessing another rail line across the state, we discovered a rail tie recycler that could process the approximately 90,000 scrap ties created by the GTR rebuild. These synergistic connections showcase the power of systems thinking in infrastructure development.

Beneficiaries of Rail Renewal

The benefits of renewed rail service extend across numerous sectors, including:

• Forest products industry, including new energy and alternative products
• Agricultural and soil enhancement producers
• Steel and aluminum industries
• New industrial development opportunities in counties and towns along rail corridors
• Existing businesses seeking improved logistics
• Supply chains for new energy and waste/scrap material streams
• Companies seeking improved environmental footprints in their supply chains

Keys to Success

Successful implementation of rail-enabled rural economic development requires:

1. Informed understanding of rail operations and value engineering
2. Detailed planning for materials procurement and construction
3. Practical engagement with existing and potential shippers
4. Assistance to potential shippers in navigating logistics challenges
5. Study of freight data to identify service opportunities
6. Involvement of all economic development entities in advancing rail-enabled growth
7. Mapping of natural resources and related stakeholders across commodity sectors
8. Understanding current logistics patterns of freight shippers
9. Development of new strategies that leverage rail-port connections
10. Management by experienced entities with track records in logistics assistance

The State’s Vital Role

Freight rail service is too essential to a state’s economic vitality to leave planning solely to railroads. Class I railroads operate under business models emphasizing long trains and long-distance hauls to major terminals and large shippers—a rational response to competing with long-haul trucking, which benefits from publicly funded infrastructure.

State leadership can facilitate growth by marshaling economic development professionals into statewide programs of rail-enabled economic development. This approach offers railroads an attractive business growth opportunity.

The Environmental and Financial Case

Rail transportation provides unmatched social, financial, and environmental advantages. With growing market demand for sustainable transportation options, particularly from companies seeking to reduce their ecological footprint across products and supply chains, freight railroads are increasingly important. Their efficiency supports environmental goals and reduces dependency on public funding for infrastructure maintenance and development.

Unlike road transport, which places heavy financial burdens on state budgets, railroads privately finance infrastructure construction and maintenance, easing pressure on taxpayers. For example, each truckload of freight causes road damage equivalent to 9,500 passenger vehicles. In contrast, an 80-car freight train eliminates the need for a 27-mile convoy of trucks, significantly reducing road wear, maintenance costs, and air pollution.

As states like Mississippi grapple with infrastructure funding shortfalls, rail transport presents a cost-effective, sustainable solution that supports economic growth.