Economists will tell you that when a major industry’s business is suffering, it can be devastating to that industry. North American railroads are suffering. Economists will also tell you that when one industry suffers a significant decline, the downstream effects on industries that support other industries is equally devastating.
The railroad industry and the car supply industry, and makers of factory equipment, steel, iron, along with others, are feeling the full effect of the major traffic decline in the rail industry. While the industry has been dealing with declining traffic for over a year, the COVID-19 pandemic has dealt a body blow.
Nicole Brewin, vice president of government and public affairs at the Railway Supply Institute (RSI) says “The COVID-19 pandemic has devastated the nation’s economy and that devastation is now directly impacting the U.S. domestic freight rolling stock manufacturing sector,” according to a report in FreightWaves. Brewin also said “We haven’t seen orders this low since the Great Recession and it’s worrisom because once these manufacturing jobs are lost, they are hard to get back.”
FreightCar America reported that it had obtain a loan the Paycheck Protection Program in the CARES Act during its Q1 2020 earnings call. RSI is thinking about lobbying Congress to help stimulate the building of new rail cars through an investment tax credit.
The railroad industry itself is pursuing federal grant money for rail capital projects. These projects include funding rail passenger projects the rail-highway grade crossing safety efforts, track maintenance, the 45G tax credit for short lines, and other projects.