CAPSI’s initial Industry Action Plan is VitalRail, a comprehensive strategy to accelerate freight rail service growth to the continent’s industries and communities. Revitalizing rail infrastructure and fostering collaboration among rail stakeholders are crucial for promoting sustainable economic growth, mitigating environmental impacts, and enhancing the national freight network.

Evolution of American Rail Infrastructure

The U.S. rail network has experienced significant changes over the past century. According to the Federal Railroad Administration, the industry reached its peak at 261,871 rail-route miles in 1925, compared to about 135,000 miles in 2025. By the 1970s, the North American rail system was in disarray and on the verge of financial collapse. The Penn Central bankruptcy in 1970 was the largest in U.S. corporate history at that time. Its failure revealed serious financial issues facing the railroad industry, which was burdened by outdated regulations and changing economic conditions. The federal government had to intervene to preserve critical rail infrastructure and services after the Penn Central bankruptcy. This included creating Amtrak to take over unprofitable passenger routes and later establishing Conrail to absorb the profitable freight operations of Penn Central and other bankrupt railroads in the Northeast, Mid-Atlantic, and Midwest regions.

The Railroad Revitalization and Regulatory Reform Act of 1976 was a direct response to the Penn Central bankruptcy and the rail industry’s struggles. The act provided transitional operating funds and established the initial framework for regulatory reform in the rail industry. The Staggers Act of 1980 further significantly reduced government control over railroad rates, allowing for more market-driven pricing and increased competition. This deregulation, driven by the desire to save the rail industry from collapse and improve its financial viability, was a direct outcome of the lessons learned from the Penn Central bankruptcy and the continuing challenges faced by the rail sector.

The post-Staggers period is sometimes referred to as the Rail Renaissance. The positive and negative effects of the Rail Renaissance, however, have been unequally distributed geographically. While deregulation likely saved the North American rail system, it set up the conditions for rationalizing the network by encouraging Class I railroads to divest less profitable branch lines, limit direct carload rail service, and pursue mergers and acquisitions. As a direct result of these policies, the active rail network has shrunk by approximately 23% since 1990, with a substantial portion of the adverse economic impact of this reduction falling on rural areas.

This shift is reflected in the impacts on contemporary transportation patterns. For instance, data reported by the Bureau of Transportation Statistics for 2023 suggests that 2.5 times more goods are moved over 2000 miles by trucks compared with railroads. Furthermore, trucks serve as the only mode of surface freight transportation for roughly 80% of towns across the U.S.

Despite these trends, railroads remain a vital part of the nation’s transportation system, offering an efficient, cost-effective, and environmentally friendly means of moving large quantities of raw materials and finished products. They remain essential to North America’s economic and social well-being.

Challenges in the Current Freight System

The current focus within the freight rail industry generally prioritizes higher-volume shipping lanes and large shippers, often at the expense of direct rail service to small towns, rural areas, and urban centers. The resulting increased reliance on trucking for freight movement places substantial strain on the U.S. highway system. The higher volume and weight of truck traffic contribute to accelerated infrastructure deterioration and increased traffic congestion. This contributes to stagnant or declining economic growth in affected areas and presents a significant barrier to revitalizing economically challenged towns and regions across the United States, as it increases transportation costs and limits logistical flexibility.

Factors Constraining Local Rail Expansion

Several factors contribute to the challenges in expanding local rail freight transportation across the United States:

• Public Policy and Regulation: Public policies have traditionally favored larger-scale transportation projects. This often results in regulatory frameworks that create obstacles for smaller rail operations.
• Financial Priorities: Conventional financial metrics, incentives, and funding programs often prioritize large transactions and wide-ranging economic development plans, neglecting the specific needs of local rail shippers and the importance of local rail infrastructure.
• Market Focus: There has been a strategic emphasis on major rail corridors, sometimes resulting in less focus or investment in branch-line rail services.

Overcoming Challenges for Smaller Railroads

A key challenge for sustained growth and improvement in the rail sector, particularly for smaller operations, is securing adequate financing. Investment is crucial for developing new rail infrastructure, loading facilities, and equipment, especially in rural and underserved regions.

Financing for rail projects, especially smaller ones, often requires tailored approaches rather than standardized solutions. A lack of understanding or focus on these specific needs has led to undercapitalization of many smaller railroads and projects. Historically, lenders have misunderstood and underappreciated the North American railroad industry as a lending marketplace. Consequently, smaller railroads continue to face limited private-sector funding options, and government programs generally prioritize larger projects and companies. This is partly due to the misperception that local rail operations are too costly, which overlooks the superior efficiency of rail compared with trucks.

To overcome this assumption, it’s essential to develop public–private funding models that integrate state, federal, and private resources to directly address these financial barriers. These models can provide the necessary capital to expand and improve local rail services. OnTrackNorthAmerica has demonstrated the success of this approach on behalf of individual railroads and projects and now advocates for institutionalizing it across the continent and the industry.

A New Vision for Integrated Rail Service

To address these barriers, we must adopt a new principle. We must acknowledge that every transaction matters, every community counts, and every small town, railroad, and shipper deserves attention. This vision challenges the common misconception that trucks are a more flexible means of transporting freight when compared with rail service. Just as trucks require roads, trains go wherever we build tracks. Now is the time to shift from ignoring or tearing up the existing rail infrastructure to improving and expanding the network and effectively integrating railroads, highways, air freight, and pipelines.

Success requires a new level of coordination between stakeholders who traditionally operate independently. Public planners can engage closely with business owners and transportation service providers, targeting smaller enterprises that are typically overlooked by traditional economic development efforts. This regional and corridor-based approach can weave multiple smaller shipping needs into viable infrastructure improvements. Plans must advance entire industrial ecosystems and supply chain strategies rather than focusing on individual projects. In addition to pursuing new enterprises, stakeholders should build on current businesses, identifying expansion opportunities and solving logistics challenges that limit rural growth. Additionally, utilizing brownfields and inactive infrastructure is often more efficient than building projects from scratch.

By reimagining rural development through the lens of rail connectivity, communities can foster sustainable economic growth that benefits both current and future generations. 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 embrace this vision and serve as many towns, cities, and shippers as possible.

Class I Railroads Can Lead the Change

Class I railroads are well-positioned to play a significant role in this transformation by collaborating with Class II and Class III short-line operators. This collaboration should involve:

• Facilitating multiple rail-line access.
• Offering competitive pricing for various railroad routes.
• Ensuring the availability of rail cars and services to support smaller, new, and expanding rail shippers.

State leadership can further support this collaboration by fostering more effective relationships among Class I railroads and the state’s economic development agencies.

Environmental and Economic Advantages of Rail

Rail transportation offers compelling economic and environmental advantages, especially for rural and other underserved communities. Integrating rail planning with regional economic development strategies can maximize benefits and minimize the negative impacts of industrial activity.

• Reduced Road Damage and Congestion: A single truck causes road damage equivalent to 9,500 passenger vehicles. Moving freight by rail reduces wear and tear on highways. A single 1-mile-long train removes the equivalent of a 27-mile-long truck convoy from our highways, causing a concomitant decrease in infrastructure maintenance costs and a substantial reduction in congestion.
• Lower Emissions: Rail transport also produces significantly fewer carbon emissions per ton-mile compared with trucking. Increasing rail freight transportation can contribute to improved air quality, enhancing the marketability of businesses that want to present lower environmental footprints to their customers and investors. For example, shipping by rail versus truck over long-haul corridors, such as Los Angeles to Chicago, can generate a 62% reduction in carbon footprint for an intermodal unit train and up to a 75% reduction for a manifest (carload) train.

Beyond Competition: A Call for Collaboration

The challenges in rail infrastructure highlight a broader need for collaboration within large infrastructure systems. While competition can drive innovation, a purely competitive framework is insufficient for optimizing complex infrastructure networks, such as freight transportation. We must reorient our commercial activities and public policy to support benefits for a broader range of stakeholders, rather than a select few individual winners.

Incorporating all regions and shipment sizes will lead to a more stable and lasting expansion of rail service. Ultimately, realizing the vision of an integrated, sustainable, and economically vital North American rail system depends on a commitment to serving a diverse range of towns, cities, and shippers, understanding that rail and road networks are best maintained as an integrated and collaborative system.

Recognizing the urgent need for sustainable transportation solutions, OnTrackNorthAmerica (OTNA), founded in 2007, addresses North America’s aging infrastructure and environmental challenges by optimizing railroads as the cornerstone of a revitalized, multimodal transportation network. By bridging critical gaps between government, industry, and citizens, OTNA revitalizes local rail freight services, promoting significant economic benefits through job creation, cost reduction, and community revitalization.

To achieve these objectives, OTNA established the Continental Action Plan for Sustainable Industry (CAPSI), which brings together representatives from all sectors to co-create integrated strategies for sustainable innovation. CAPSI’s first initiative, VitalRail, facilitates collaborative discussions and education toward innovative policies, programs, and marketplace improvements for North America’s freight rail service. These developments are guided by insights from VitalRail’s IntelliConference series, leveraging expertise from key industry participants.

OTNA’s inclusive structure—enabling everyone to have a seat at the table and an equal voice—encourages unprecedented collaboration and drives meaningful change. This approach is crucial for establishing a resilient and efficient rail network that benefits communities, industries, and the environment throughout North America.