All Aboard the Railroad Revival

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Includes: BNI, CNI, CSX, NSC, UNP
by: Frank Holmes

President Obama is asking for $13 billion for a high-speed passenger rail system, saying its creation “will lead to innovations that change the way we travel in America.”

Proposed plans include linking Los Angeles and San Francisco with a high-speed rail that would make it only a two-hour trip. Below is a map of the ten high-speed corridors outlined in the President’s plan.

Train travel is already more popular than most people realize. Amtrak carried nearly 30 million passengers last year, up 11 percent from 2007. The chart below shows a steady upward trend since the mid-1990s.

The fastest growth has been on rail lines linking major cities less than 500 miles apart, according to the American Society of Civil Engineers. Such routes include the Boston-Washington corridor, the Bay Area to Sacramento and Milwaukee-Chicago.

In its 2009 infrastructure report, the ASCE gave America’s rail network a grade of “C-,” which is mediocre but nevertheless better than the “D” earned by America’s overall infrastructure.

The ASCE estimates that $63 billion in rail investment will be needed over the next five years to meet increasing passenger and freight demand.

About $51 billion has already been budgeted for rails, according to estimates, leaving roughly $12 billion in unmet need. That’s where President Obama’s proposal comes in – if it’s approved, there will be more than enough money for the necessary upgrades.