Wednesday, June 26, 2013

AAR: Freight rail private investments help build America’s strong transportation system

Association of American Railroads (AAR) President and CEO Edward Hamberger on June 26 told a House Transportation Committee special panel on 21st Century Freight Transportation that billions in annual privately-funded rail infrastructure investments have made America's rail network vital to U.S. competitiveness in the global supply chain.

 

"There is a tremendous amount of strength and flexibility in our nation's freight transportation systems – more so than any other country in the world," Hamberger said. "Freight railroads are investing today to meet increased freight demand forecasted for tomorrow – through record investments in infrastructure and equipment, development and implementation of technology and improved operational efficiencies. "

Today, railroads move more ton-miles of freight than any other mode of transportation, roughly 40 percent of all freight, including virtually everything from major bulk commodities to consumer and household goods. Freight rail's success, both in serving and competing with other modes of freight transportation, has come thanks to its safety, efficiency, reliability and affordability, Hamberger said.

For example, today's rail rates are highly competitive, on average 44 percent lower than they were in 1980. In addition, railroads are on average four times more fuel-efficient than trucks, carrying on average a ton of goods 476 miles on a single gallon of fuel.

Hamberger noted that most freight moving in America today moves on more than one mode of transportation – including truck, train and barge or ship. In addition to a strong underlying infrastructure for each mode, a critical link in all of these intermodal freight movements is the health of the first- and last-mile connection.

"These connections, where freight is perhaps handed off from ship to truck or ship to rail, are highly vulnerable to disruptions and improving them will ensure America can stay competitive in the global supply chain and handle the large increases in future freight demand," he said.

Hamberger commended Congress and the administration for previous federal support of major infrastructure projects that has facilitated such intermodal connections, through public-private partnerships

"Some of these projects could prove too costly for a local government or state to fund," Hamberger said. "But federal funding awarded through a competitive discretionary grant process, such as the TIGER program, has proven an appropriate and effective way to make sure our first- and last-mile connections stay strong."

Finally, Hamberger noted that the federal infrastructure funding policy of "user-pay" has worked well. "The traditional system under which users of infrastructure pay for that infrastructure should not be broken," he said.

 

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