US freight railroads proved resilient in 2021, navigating a year many hoped would prove easier than 2020. In a testament to the industry’s leadership and workforce and decades of private investment, railroads last year handled their highest volume of intermodal traffic ever in a six-month period as many shippers fought to clear backlogs.
If there is one lesson railroads took away, it is that collaboration across the supply chain is key to keeping goods moving and meeting consumer demand. Continued efforts by railroads to increase visibility for customers — as well as their 24/7 operations — paid dividends and will multiply in the future as rail volumes continue to grow. The result will be less congested highways and lower carbon emissions.
In the near term, US railroads are well positioned to meet demand. Class I carriers took steps in 2021 to navigate the environment, temporarily expanding yard capacity at intermodal facilities and re-routing traffic to decongest hubs like Chicago and Memphis. This nimbleness of railroads will prove valuable moving forward, even if the current crisis subsides.
In the long term, policy in Washington, DC, namely passage of the Infrastructure Investment and Jobs Act (IIJA), will bolster the US freight sector. The IIJA provides historic levels of funding for rail grade crossings, including $245 million per fiscal year in formula grants for grade crossing projects, as well as a separate pot of $600 million annually for grade separations. The latter is thanks to the leadership of Sens. Maria Cantwell, D-Washington, chair of the Senate Commerce Committee, and Roy Blunt, R-Missouri.
To meet the goals of the Biden administration, including growth of freight rail and climate mitigation, regulators must embrace the fact that railroads compete in evolving and vibrant intermodal markets. Policies like minimum-crew-size mandates or open-access regulations, which would create inefficiencies and divert freight away from rail, have no place in a 21st-century economy.