Addressing Rail Needs

Recommendation

Establish a National Rail Transportation Policy—Intercity passenger and freight rail are critical components of the nation’s surface transportation system. States are developing intercity passenger rail corridors to ease congestion, improve air quality, and provide improved personal mobility options. Freight-rail capacity has decreased over the past 20 years while demand for freight capacity in all modes has increased dramatically. Freight shippers in many states have expressed serious concerns about their transportation options which may seriously compromise the system’s ability to support our national economic growth. Current rail capacity is not sufficient to meet passenger or freight needs.

It is imperative that the Commission develop and recommend a national rail policy that addresses institutional roles, passenger and freight capacity, and new, non-Highway Trust Fund funding and financing options. This policy must be developed in partnership with Federal and state governments and the railroads.

Freight Rail Faces Capacity Shortage

America’s freight rail system carries 14 percent of the nation’s freight by tonnage, 29 percent of ton miles, and 5 percent of value. In 1980, the freight-rail industry faced financial crisis. That year it was deregulated by the Federal Government. Since then the railroads have increased their productivity by cutting track mileage from 380,000 miles to 172,000 miles, cutting back on rolling stock and employees, and consolidating ownership into seven Class I Railroads, and 551 Shortlines. After years of downsizing, the railroads face a capacity shortage because the growth in freight-rail demand has now outstripped what they can carry. This is especially true for rail intermodal freight which is forecast to grow over 200 percent by 2035.

In 2003, AASHTO’s Freight Rail Bottom Line Report estimated that the level of investment in rail infrastructure required for freight rail to maintain its current market share and handle its “fair share” of growth was approximately $195 billion over 20 years. The report anticipated that the railroads should be able to provide around 75 percent of the funding required, estimated at $142 billion, but the remainder (up to $53 billion, or $2.65 billion annually) would have to come from public sources, in the form of direct assistance, low-interest loans, tax credits, and other forms of public-sector participation. The report concluded that highway agencies have a direct interest in the railroads receiving the public funding support needed. The report reasoned that if public support enabled railroads to add capacity and shift freight from highways to rail, especially long-haul intermodal freight, this would help reduce highway congestion.

Recommendation

Existing Federal programs that increase capacity and efficiency in freight-rail transportation, such as the railroad rehabilitation and improvement financing program, should be continued. The current eligiblility of freight rail for receiving funding assistance through programs such as the Congestion Mitigation and Air Quality Program (CMAQ) and the highway-rail crossing program should be preserved. Incentives for new investment in freight-rail infrastructure by rail companies, such as through investment tax credits, should be created and Federal funding from revenues outside of the Highway Trust Fund should be provided to states for participation in public-benefit freight-rail projects.

Planning Railroads for the 21st Century

Much of the current network of railroads was designed and built in the late 19th and early 20th Centuries. The country has changed a great deal since then. A huge amount of growth has taken place in the South and West, NAFTA has stimulated the need for more North–South capacity, trade with Asia is up dramatically, major metropolitan areas have developed which did not exist 50 years ago, and major new distribution centers are being developed. AASHTO believes it would be in the national interest if a trunk rail system for the 21st Century with the efficiency and direct connections needed for the future were planned, designed, and built.

Recommendation

The Federal government, in collaboration with states, the freight-rail industry, and shippers should develop a description of the freight-rail system needed for the 21st Century as a framework for rail policy and investment.

There is a widespread conviction that states must play a leadership role in ensuring that any intercity passenger rail solution that is ultimately adopted will meet the mobility needs of 21st Century passengers and freight shippers, and contribute positively to the economic growth and vitality of this nation. However, a national intercity passenger rail system requires action by the national government. Without the Federal government as a strong investment partner, there is no chance that the nation will have the intercity passenger rail service that is needed.

Intercity Passenger Rail Improvements

Nearly all intercity passenger rail service is currently provided by Amtrak, which serves 23 million passengers annually, generating annual ticket revenues of about $1.1 billion. Services are provided over a network of approximately 23,000 miles of rail over which about 270 trains operate per day, serving 500 communities in 47 states. Over the past 10 years, Federal assistance for Amtrak has averaged about $1 billion annually.

Several states have invested in intercity passenger rail corridor service through contracts with Amtrak. Investment in the Chicago–Milwaukee–Minneapolis corridor, as part of the Midwest Regional Rail Initiative may increase ridership from 321,000 in 1996 to 3.2 million in the future. Planned investment in California’s three state-supported corridors will support ridership of 11.6 million in the future, compared with 2.6 million in 1996. For the Northeast Corridor, planned investments will maintain and expand the current annual ridership of 14 million.

Despite important changes under new Amtrak leadership, uncertainty continues to surround its future. Critical rail infrastructure repairs and improvements remain unaddressed. Recent efforts to recalculate Northeast Corridor access fees for commuter lines have deflected those involved from the broader, long-term task. The uncertainty of annual Federal support for Amtrak and the access fee controversy have called into question the Federal commitment to the investment necessary bring the Northeast Corridor up to a state of good repair.

To sustain current intercity passenger rail service, which is now provided by Amtrak,
AASHTO has called for the enactment of long-term legislation which provides the financial support to assure that the nation’s travelers will have efficient and dependable service, including a stabilization period while longer-term solutions are devised.

AASHTO members also support the expansion of intercity passenger rail service and have identified 21 corridors where this might prove feasible given sufficient financial support. In 2002, AASHTO produced a report entitled Intercity Passenger Rail Transportation which estimated the investment needs for those 21 intercity passenger rail corridors including those owned by Amtrak to be $60 billion over the next 20 years. That would translate into an annual investment of $3 billion.

Recommendation

Provide funding needed for Amtrak to continue operation of current services and not interrupt vital commuter services until a long-term national program for intercity passenger rail service is established.
Establish a sound passenger rail partnership between the States and the Federal government and then move forward with plans to expand service. States will continue to support existing rail service, as well as take the lead in planning and developing new, expanded, and enhanced regional passenger rail corridor services. However, there must be a Federal–State funding partnership similar to existing highway, transit, and aviation programs.

Next Page >>