Tuesday, September 20, 2011

Let’s line up our policies with our ambitions

Written by  Michael Ward, chief executive, CSX

This is an extraordinary time for North American railroads. We’re creating jobs, supporting new businesses and expansions of existing ones, and easing traffic congestion and associated emissions. Rail investment in the U.S. this year is expected to approach $12 billion to maintain and expand 140,000 miles of track and supporting infrastructure.

This substantial investment, combined with the commitment and hard work of our employees, has transformed U.S. railroads. But we need additional rail capacity to meet America’s future needs. The Federal Highway Administration estimates that freight demand will increase 61% during the next 30 years.

Railroads are finding innovative ways to build for the future, and what we have accomplished is an unprecedented success story that contrasts sharply with the general condition of U.S. transportation infrastructure.

In a report released in early August, the American Society of Civil Engineers (ASCE) warns that the nation’s deteriorating surface transportation infrastructure will cost the U.S. economy more than 876,000 jobs by 2020. ASCE says that in 2010, deficiencies in America’s roads, bridges, and transit systems cost U.S. households and businesses roughly $130 billion, including $97 billion in vehicle operating costs and $32 billion in delays in travel time.

The report estimates that to bring the nation’s surface transportation infrastructure up to desired levels, policymakers would need to invest approximately $1.7 trillion between now and 2020 in the nation’s highways and transit systems.

Overburdened highways are one of the reasons behind the renaissance of freight railroads in this country. More people consume more things and more things need to be transported. More goods on trains mean fewer goods on the roads. Nothing makes the point more clearly than the compelling facts that a train can move a ton of freight 500 miles on a single gallon of fuel, and can carry the load of 280 trucks.

As we know, it was a different story 30 years ago. Railroads were literally falling apart, and one out of five was in bankruptcy. Since the Staggers Act of 1980 and partial deregulation, railroads have invested more than $480 billion in private funds growing and modernizing this country’s rail network. That’s more than 40 cents out of every revenue dollar. And we do it so U.S. taxpayers don’t have to. America now has the safest, most productive, most affordable freight railroads in the world.

CSX’s own experience reflects what the industry has been able to do operating in an environment of balanced regulation.

In 2005, CSX began building new track capacity on our line from Chicago to the Southeast to provide more fluid train movements and better customer service. We built dozens of sidings of 10,000 feet or more to make meets and passes even more safe and efficient. We saw immediate improvements in velocity and other measurements of reliability. The program also included the River Line on the west side of the Hudson between the New York City area and Albany.

Our investments have not been limited to track. We continue to purchase new fuel-efficient locomotives for line-of-road service, build new terminals, and make substantial investments in technology. This year, we plan to spend $2.2 billion to maintain infrastructure as well as expand capacity.

Much of our capacity expansion is focused on the National Gateway. We have combined our investments with those of the federal government, six states, and the District of Columbia to build an $842 million, high-volume, doublestack intermodal corridor between the Mid-Atlantic region and its ports and the Midwest. Earlier this year, a $175 million intermodal terminal in Northwest Ohio opened—the centerpiece of this new rail corridor that is expected to be complete in 2015. Every dollar of public money invested in the National Gateway creates $35 in public benefits.

The capacity improvements and expansions in the U.S. rail network are an example of what we can accomplish when private enterprise and public policy work as one. There’s more that can be done, and we continue to talk to policymakers about tax incentives for expanding capacity, additional public-private partnerships, and the need for balanced regulation.

America’s freight rail network is now truly second to none, linking the American farmer, miner, factory worker, and port stevedore to the global economy—safely, reliably, and efficiently. Railroads are ready to get America moving again, creating new transportation infrastructure, tremendous economic growth, and good jobs for many Americans. The next few years could mark the greatest opportunity for American railroads, if we line up our policies with our ambitions.