America’s Great Railroad System

It moves stuff, lots of stuff. The amounts shipped on America’s rail system are staggering both in the amounts of loads handled and the diversity of stuff that gets shipped.  Here’s a couple of videos I shot on the Hudson River.

This post from Coyote blog says it all.

The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails. ….

I would argue that the US has the world’s largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause some intellectuals to swoon.

The US Has The Best Rail System in the World, and Matt Yglesias Actually Pointed Out the Reason

America’s railroad’s are unique because the are a network of companies rather than a national state owned organization.  Because of this the idea of interchanging rolling stock started in about the 1850’s or so.  That way a load moving across the country from one railroad to another would have to be unloaded and reloaded at very interchange terminal, instead the car itself would be handed over for the next part of the load’s delivery to the customer.  The interchange of cars allowed loads to move across the network without having to worry about unloading and reloading with the inevitable shrinkage involved.  And cars could be sent to places where they would  be needed without worrying about whether one car could run on somebody else’s railroad.

By the 1880’s the essentials of what would be the American railway were essentially complete.  Passenger equipment had been equipped with the new safety appliances  and freight cars were being converted as funds and time permitted.  The track network was the network that would remain through the 20th Century and to today.


One of the things that makes American railroads different is that the system was never nationalized, well, with the exception of a very brief period between  World War One and 1920 when the new Republican administration gave the railroads back to their owners. That meant that the American railroads had very different operating philosophy than the Europeans or Japanese did. Things like customer sidings and way freights that delivered cars along the line.  By and large the American railways never centralized around the central station like The Japanese and European railroads did.  For one thing the great distances between stations and overall made concentrating deliveries at central stations impractical. For another the shippers and receivers along the tracks expected to  be able to have access to them and cars delivered to their doorsteps. Which still happens all over the country.

Now switching by local freight is not the best way to run a railroad efficiently, but it has allowed the American railroads to provide a greater diversity of transport services

Of course the government setting the rates on one side and the unions on the other squeezed the railroads throughout the 20th century. Which made it hard for the railroads to look for operating efficiencies and be rewarded for technical improvements.  For most of the 20th Century the ability to set rates and service was controlled by the Interstate Commerce Commission (ICC) and did not keep with changing economic conditions.

As 20th century went on the railroads pursued operational efficiencies to keep themselves running. The great depression, WW2 and the post war highway and airline booms took great bites out of the railroad’s ability to generate the revenues needed to function. On the operation side the inability to change labor rules to take advantage of new technologies and the carrying of a huge burden of a labor that was not willing to change even when it was obvious that the ship they were on was in deep trouble.  So in the end, using the most modern technologies the companies could get their hands like Electrification, Dieselization, Centralized Train Control and punch card forwarding could not save the railroads.

The  crash during the 1970’s made the ruin obvious.  Movies like this were not an exaggeration.

There was only so much maintenance that could be deferred.  What was needed was the freedom set rates and take advantage of operating improvements and develop new ways of providing services that rail customers needed.  Under ICC control service improvements and innovation were nearly impossible.  So the rail network was slowly crumbling into useless obsolescence.  Relief was needed.   The government started by taking the responsibility for the money losing rail passengers out of the hands of the struggling rail companies.  This created Amtrak.

For the companies in the Northeast, that was too little too late.  So after the failed Penn Central merger the Government stepped in and merged almost all the Northeast railroads into the Consolidated Rail corporation or Conrail.  The last half of the 1970’s was a big time for mergers and abandonments.  The current railroads, Norfolk Southern, CSX, BNSF, and UP all came about in their current operational areas in this period.

Still by the end of the 1970’s, it looked like the American rail system was on it’s way out.  Most railroads were in financial trouble and some were bankrupt.  The railroads needed a miracle and they got it.  In 1980, the Staggers rail act was passed, deregulating the railroads for the first time in 70 odd years.

The effect were almost immediate.  the first thing to go was the caboose, along with the redundant crews on the trains.  The rail companies started to use larger freight cars and went dramatically into intermodal and Trailer On Flat Car, moving trailers over improved lines to provide 70 MPH service to large trucking and intermodal shippers.  The freight car builders created 100 ton  freight cars and multi unit intermodal and TOFC cars to handle the new traffic.  The railroads centralized and restructured operations so that train movements can be coordinated across the continent.  These improvements allow America’s railroad to move mind boggling amounts of stuff  cheaper than any land based transportation ever created.

What does this mean?  Well consider this.  There is a power plant in Britain that can burn wood from Georgia and Florida almost as cheaply as coal mined in Britain or Sweden.  That’s due to the low cost of shipping the wood pellets by rail to Savanah for transfer on a special train used for that service.  That’s the power of the American Rail system.

There are some people who want to return the railroads to the regulated industry that existed back in the 1970’s. I can think of very little that would do more to hurt the economy.  Like the trains themselves, which have disappeared from the popular landscape, the benefits of the rail system as it is are seemingly invisible.  That doesn not mean that they don’t exist.

America’s railroad system as it exists now is the product of 35 years of constant investment and improvement.  The companies are looking to improve the services they provide and move ever larger quantities of stuff.  America has the best rail system in the world for moving freight, whether it’s a little shortline like the Branford Steam Railroad in the  top picture or the huge continent spanning giants.  All of it moving the stuff we need every day.

One comment

  1. Bryan Lovely · September 30, 2016

    Well, now I know what it meant when I saw a crew car on a siding in Tacoma, Washington, that had the words “Do Not Hump” stenciled on the side. 🙂


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