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Back on track: The quiet success of America’s freight railways

Europe may have the drop on the U.S. when it comes to passenger trains, but America has the upper hand when it comes to the art of freight trains and the network behind it. This article on The Economist discusses just how effective American freight rail has become, where it’s going, and how the Staggers act of 1980 has made it possible for supply chain networks to better themselves. First, some backstory: The Staggers Rail Act of 1980 was a direct result of rail’s inability to compete with airlines and the interstate highway system. The act reduced federal involvement in rail, allowing for more healthy completion, private enterprise, and contracts between each without The Interstate Commerce Commission (ICC)’s  involvement. This led, successfully, to an expansion of the value of rail, and investment in it as a feasible way to create substantial and reliable supply chains. But the success doesn’t just go to the Staggers Rail Act. In large part, freight railways are doing so well because the people putting money and resources into an effort to make them efficient are doing such a good job at it. As explained in the article, rail analyst Tony Hatch states that “improvements in scheduling and timekeeping mean that trains are now winning business they might not even have bothered bidding for before.” With the expansion of stores like Wal-Mart and Target, the need to reliably and routinely move large amounts of products fits the rail perfectly. The article goes on to state: Moving goods by rail is four times more fuel efficient than by road, and railways can increase their capacity in the future. So America’s trains may soon nibble at trucks’ market share—particularly for journeys that take longer than a day by road. Truckers are battling high fuel and labour costs, shortages of drivers, congestion, tighter rules on how drivers must operate and chronic underinvestment in roads. The traditional shipment on American rail is coal (the article states that 43% of what is moved (by weight) is coal), and that might have some impact if the US moves towards other forms of fuel. But even in this, rail is prepared: there is a likelihood that, with the expansion of oil being produced in America, rail will be able to immediately meet the demand for moving that oil across the United States. It seems that rail will remain a strong force in supply chains across the U.S., and that can only bode well for how much companies will be willing to invest in rail’s heath and expansion.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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