In order to better understand the role that railroads play in freight transportation in America today, as well as the role that they could play in future as our population and economy grow, it is helpful to take a look at the overall evolution of the nation’s freight system. Examining freight rail within the context of the general development of freight movement in our country helps give a better idea of why railroads function the way they do and identify both the challenges and potential of American railroads as a vital part of the country’s 21st century freight system.
In essence, America’s freight system has gone through four distinct eras.
1.The “sail era” (the 18th century).
In the 18th century, the colonial economies of the new world were based almost entirely on water transport. During the Revolutionary Era, two-thirds of settlers lived no farther than 50 miles away from the Atlantic coast and Europe was still a vital source of goods and commodities.
As a result, Atlantic trade was the dominant force in the freight system. Secondary trade routes included the coast of what is now Southern California and the Mississippi River. Given the relative ease of water transport compared with the almost total lack of other efficient forms of transport during this era, the cost to move a ton of goods 30 miles inland was equal to the cost of transporting that same ton all the way across the Atlantic.
2.The “rail era” (the 19th century).
As rail technology developed and then boomed in the mid-1800s, huge swaths of America’s interior were opened up to trade and freight movement, since businesses and industries were no longer restricted by the need to be located close to sea, river, and canal ports. East-west rail routes, of which the most significant was the Transcontinental Railroad, were built first. These routes served both to supply the needs of the developing Midwest region and to strengthen political and military control of the West following the Civil War.
The growth of north-south rail routes was sluggish because water transport was still the most efficient way to move freight along the coasts. However, in this era, domestic inland trade, rather than trade across the Atlantic with Europe, came to dominate the freight system, and highly-populated urban centers sprang up around major inland rail hubs throughout the country.
3.The “truck era” (the 20th century).
As truck and highway technologies developed in the early 20th century, business and industry found yet another level of freedom. Now, rather than needing to be near rail lines and terminals, they could be located almost anywhere thanks to the new east-west and north-south interstate highway system. This system replaced the former hub-based rail network with a comprehensive grid connecting cities and regional economies across the country. As a result of this new arrangement, a great deal of inexpensive land became accessible, and centers of both production and consumption migrated outwards, away from historical city centers.
Trucks became the only way to serve these new suburban and ex-urban markets, and long-haul trucking captured a significant share of both the east-west freight traffic previously served by railroads and the north-south freight traffic previously handled by river barges and coastal steamers. Rail and water transport did continue to serve some traditional markets, but trucking was the prevailing mode of freight transportation by a considerable margin.
4.The “integration and information era” (the 21st century).
Today’s global economy is based on a potent mix of information, telecommunications, and long-haul, low-cost transport by water, air, and rail. One of the most transformative innovations for today’s freight system was containerization. Pioneered in the 1950s, the widespread use of shipping containers for freight transport has allowed trucks, double-stack trains, and container ships to all work together to efficiently move freight over long distances. This technique is known as “intermodal”, and its effective linking of various types of transport has helped significantly reduce freight movement costs as well as cargo theft and damage.
Alongside containerization, cutting-edge information and communication technologies have also evolved, meaning that it is now possible to manage reliable, visible, secure, and cost-effective global freight flows. Add to these parallel developments the reduction in trade barriers brought about by such happenings as the integration of the European Union and the creation of agreements like the North American Free Trade Agreement, and the result is an explosion of global trade in all directions that is growing steadily every year.
Against such a backdrop, today’s freight rail industry is asking itself some important questions about where it stands and how it can evolve. For example, with routes initially designed two centuries ago to serve an economy geared towards east-west domestic trade, how does a freight rail system update itself to serve a global, digital economy? How can freight rail best leverage the many benefits it offers as a mode of transport, particularly in terms of environmental benefits and fuel efficiency, to once again become a dominant force in freight movement? These and many other questions are driving the US freight rail industry to new levels of innovation and development, as it works to become an increasingly indispensable part of the future of freight.