Freight railroads plan to spend a record $12 billion on hiring new employees, laying down new track, and other capital projects in 2011, an industry group said.
The Association of American Railroads, whose members include Canadian Pacific Railway , Union Pacific , Norfolk Southern , and CSX , said freight railroads intend to hire about 10,000 new employees this year.
“Even during the worst recession in a generation, freight railroads have been plowing record amounts of private capital back into the rail network each and every year, achieving one of the highest capital investment rates of any U.S. industry,” association chief executive Edward Hamberger said in a statement.
The group—representing major freight railroads in the United States, Mexico and Canada—said its members set the previous record for capital spending in 2010, when the industry invested $10.7 billion.
Freight rail capital spending averaged $10 billion during the last three years.
The increase in investment comes at a time when President Barack Obama has touted plans to boost American manufacturing and raise exports.
“One-third of all exports get to port on the back of a rail car,” Hamberger said. “If we’re going to double those exports, we need to make sure that there’s enough freight rail capacity.”
Freight railroads have come under some scrutiny from Congress in the last year. A handful of senators have introduced legislation that would put railroads under tougher competition rules and expand the authority of the Surface Transportation Board.
Hamberger said CEOs represented by his association have expressed concern that increased regulation could hamper their ability to continue investments, but he added that those worries haven’t hurt capital spending to date.
“The fact that they are doing well allows us to plow $12 billion back into the infrastructure,” he said. (Reuters)