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Issue #586 | Latin America Trade | Canada Ports

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2014 Media Kit
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ITI Chairman: railroads are taking leadership role in economic development

By: | at 08:00 PM | Channel(s): Intermodal  

Says federal government needs to step up to meet needs of transportation industry

Thomas Finkbiner, Chairman of the Board of Directors for the Intermodal Transportation Institute (ITI) at the University of Denver, told a recent gathering of the Global Logistics Conference, in Jackson, Mississippi, that while the federal government has failed to promote and fund a coherent national transportation policy, the nation’s Class 1 freight railroads have taken a leadership role in meeting our growing economic demands and capacity concerns.

‘The nation’s Class 1 freight railroads have stepped forward to help fill the void left by government inaction and helped achieve economic efficiencies that are alleviating some of the problems caused by a transportation infrastructure that is stretched beyond capacity,’ Finkbiner said. ‘However, Class 1 railroads cannot bring about the required policy changes and funding necessary to address all of our growing transportation concerns. They have to pay for the construction and maintenance of their own rights-of-way. In order for them to continue to contribute with infrastructure enhancements and carry more freight more quickly, they must have additional investment capital beyond what they can generate.’

Between 1980, the year of the Staggers (deregulation) Act, and 2005, Class 1 railroad freight revenue ton-miles grew form $918 billion annually to $1.696 trillion dollars per year ’ an 84.7% gain. During this period, railroad employment decreased by 18%, while the use of intermodal and other freight cars increased by 50% ’ speaking directly to the increased productivity demonstrated by the nation’s rail network of 97,496 miles. At the same time, thanks in large part to this productivity, and increased consumer consumption, GDP more than doubled ’ from $5.2 trillion annually to $11.7 trillion a year.

Finkbiner pointed out that railroad developments such as that in Meridien, Mississippi, have the ability to take advantage of today’s global trends. Meriden has the ability to reach all the major population centers in the Southeast, with direct rail connections to Port Rupert in Canada via CN and direct service to Lazaro Cardenas, Mexico, via Kansas City Southern Rail. BNSF has built large terminals in Joliet, Illinois and Alliance, Texas, which is enabling private developers to build logistics parks around the rail connections. CSX is taking a similar initiative by building both a major intermodal rail facility and a logistics park in Winter Haven, Florida, he noted.

‘The private rail sector has demonstrated it has the ability to create economic efficiencies to handle our growing freight burden,’ Finkbiner said. ‘If the nation’s freight railroads are going to continue to re-engineer and rebuild their privately-owned rights-of-way, such as they did with the Alameda Corridor, however, they are going to have to have some help from the federal government in the way of a realistic transportation policy and badly needed government funding. Without such action, it will be impossible for our current transportation network to handle the continuing capacity surge.’

Finkbiner closed by telling the Conference: ‘If Congress and DOT are serious about creating an up-to-date transportation network, they will begin by working with the private sector to create a seamless intermodal infrastructure. Passing the proposed 25% tax credit proposal for freight railroad capital investments would be a good first step in creating more capital for expanding badly needed track capacity expansion and service enhancements necessary to meet the nation’s economic needs.’