The countdown has begun for the 150th anniversary of the completion of the first transcontinental railroad at Promontory Summit. And while Utah and the country will celebrate this historic occasion in our nation’s history on May 10, 2019, with pomp and fanfare, we ought to use the upcoming celebration to focus on the sometimes-forgotten contributions of modern freight railroads to our state and country.
We often overlook the fact that freight railroads are privately owned companies operating on their own interconnected 140,000-mile network and that they plow 40 cents of every revenue dollar back into maintaining and upgrading that network. Rail’s rate of reinvestment is larger than any other American industry.
It hasn’t always been that way. Railroads were nearly regulated into obsolescence by the late 1970s. When Congress partially deregulated rail companies in 1980, it freed them to operate like other businesses in the marketplace, and the results have been remarkable. Since 1980, U.S. freight railroads have spent and invested $660 billion of their own dollars into the network.
This investment has driven a freight rail renaissance and made America’s railroads the most efficient and affordable in the world. U.S. freight rail rates are actually the lowest in the world, and shippers can move roughly twice as much as they could in 1980 for the same price (adjusted for inflation). That helps keep the economy moving and saves consumers money.
Much of this investment has gone into new technologies that have improved safety and made railroads more efficient. While no one may expect it, railroads are employing cutting-edge technologies also used by the defense industry and by tech companies.
Today’s railroads use smart sensors that constantly monitor the health and integrity of railcars, locomotives and track, ensuring all parts of the network are at safe and optimal performance. Big data and analytics identify maintenance needs, which help railroads improve safety and better-serve customers by predicting problems before they happen. Fuel management systems, improved fuel efficiency and cleaner locomotives also minimize rail’s carbon footprint.
Perhaps the most significant byproduct of railroad modernization and investment is the economic development opportunities brought about by efficient rail service. The seven railroads that operate over 1,300 miles of track in Utah are key to helping Utah farms, factories, mines and manufacturers bring in raw inputs and connect Utah goods to markets across the country and the world.
According to a recent study by the Towson University in Maryland, investments of major U.S. railroads created more than $274 billion in economic activity in 2014, while supporting approximately 1.5 million jobs and $88 billion in total wages across the country. That means every rail job supports another nine jobs across the economy.
Union Pacific, in particular, has a strong presence in Utah and is, in fact, incorporated in our state. The rail company is key to our energy industry. Coal and intermodal shipments — when containers of consumer products or truck trailers are put on rail for part of their ship-rail-truck journey — make up the vast majority of Utah rail traffic. Development of a global trade port in the northwest quadrant of Salt Lake City should create increased demand for rail access to and from the crossroads of the West.5 comments on this story
We in the Governor’s Office of Economic Development can attest that access to reliable, affordable, efficient transportation is one of the most important criteria for companies looking to build a manufacturing facility. Economic development often hinges on connections to rail and to the intermodal network of trucks, trains, barges and planes that make the economy move.
As we market Utah to companies and promote Utah products to the world, access to freight railroads makes our job easier. Looking ahead to the celebration of a historic national moment next year, we are grateful for the role that railroads play in keeping both our state and national economy rolling.