Rail Infrastructure Needs $148 Billion Investment

A new study the Cambridge Systematics points out that, "Without this investment, 30% of rail miles in the primary corridors will be operating above capacity by 2035, causing severe congestion that will affect every region of the country and potentially shift freight to an already heavily congested highway system."

Most of the investment (an estimated $135 billion) will be needed on rail networks operated by the nation's major freight railroads. The study suggests about $96 billion can be raised by the railroads. The funding gap equates to $1.4 billion per year, and amount that would have to be funded through railroad infrastructure tax incentives, public-private partnerships, and other sources.

"Since the rail industry's partial deregulation in 1980, railroads have been able to invest over $400 billion back into their operations," notes Edward R. Hamberger, president and CEO of the Association of American Railroads (AAR). "The primary message from this report is that railroads need to materially increase their investments to expand capacity. Railroad earnings and productivity are the key to making these investments."

Hamberger further commented that the situation also speaks to a need for passage of the bipartisan infrastructure tax credit currently pending in Congress. "Its passage would significantly reduce the $1.4 billion gap that exists between what the railroad industry needs to spend each year to meet future demand and what it can raise on its own."

The Cambridge Systematics study is titled "National Rail Freight Infrastructure Capacity and Investment Study."

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