Record-Breaking Railroad Investment Signals Change in Transportation Landscape

By Mike Kilgore, President & CEO, Chainalytics
Tuesday, March 29, 2011

It was estimated recently that major U.S. freight railroads will spend a record-breaking $12 billion in capital investments during 2011 – up from a record $10.7 billion last year. To keep pace with this spending, Class 1s expect to hire at least 10,000 additional workers. Despite some uncertainty in the regulatory environment — including proposed changes to antitrust exemption and economic regulation — rail executives are continuing full steam ahead. How will this impact the near future of the transportation landscape? 

It is not uncommon to see increased rail volumes and subsequent expenditures when fuel and oil prices spike. After all, rail is the least energy-intensive mode. This expected investment, however, signals a fundamental shift in today’s transportation environment: rail is becoming a more viable transportation alternative. Class 1s are investing in equipment, technology, and maintenance initiatives to effectively compete for your freight by offering improved service levels and lower costs. 

How can you leverage this opportunity? Stay tuned for Steve Ellet’s upcoming blog which will address the common obstacle of comprehensively considering rail in your network design initiatives:  rate estimation.

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