ico-electricity2 [ Barrels of Oil Equivalent Saved: ] 14M
ico-job [ Jobs Impact: ]
  • LOW
  • HIGH
ico-cost [ Budget Impact: ]
  • LOW
  • HIGH
ico-pollution [ Conventional Pollutants Reduced: ]

NOx 271,955 tons

ico-reduced [ Megatons of GHG Reduced: ] 23


The U.S. freight rail system consists of 139,000 miles of track used to move 40% of the nation’s goods each year.1 It also provides the cleanest, safest, and most energy efficient way to transport freight over land.2 Trucks will always play a vital role in servicing the “last mile” of the transportation chain. But with total freight movement expected to grow 50% by 2040, America must take full advantage of opportunities to promote its most efficient modal options.3 To maximize its market share, rail will have to overcome challenges like the immense capital investment required to build and maintain infrastructure and the disparity between the federal investments channeled toward rail and highways.


Moving freight by rail is four times more fuel efficient than using trucks. It also emits roughly 75% less greenhouse gases4 and eliminates large quantities of vehicle pollution like NOx and particulate matter.5 Rail also helps relieve highway congestion, since a single freight train can carry enough cargo to replace 300 trucks.6 Increasing rail’s market share of total freight movement by just 2.5% would eliminate the need for 7 billion miles of truck travel on American highways.7

Rail also shifts less cost to the public. For every million ton-miles traveled by truck, taxpayers pick up the tab for $7,000 worth of infrastructure costs not covered by gas taxes and user fees, and another $7,000 for the cost of congestion—totaling roughly $29 billion each year. Rail, in comparison, carries less than 4% of those costs.8

Railroads are one of the most capital-intensive sectors in the economy. Unlike highways, which are built and maintained primarily by government, railroad companies are responsible for almost all of the costs of their infrastructure, reinvesting 30-40% of their revenues each year to build and maintain tracks, facilities, locomotives, and equipment.9 However, this investment translates directly into economic growth and job creation, as roughly 50 cents of every dollar spent on rail rehabilitation goes to labor.10


The federal government should encourage investment in rail infrastructure and level the playing field between rail and trucking in federal planning and policy.

Reform the Existing Railroad Financing Program to Unlock Funds

The federal government already has a zero-cost financing program for rail that is underutilized. If modified slightly and provided with a relatively small amount of funding, the Railroad Rehabilitation and Improvement Financing Program (RRIF) could provide loans and loan guarantees for billions of dollars in rail infrastructure investment. However, administrative complexity and lack of flexibility in lending terms have kept RRIF from meeting its potential, and only $430 million of the $35 billion in available authority is actually being used.11 Congress can make several adjustments to this program to make it more accessible to applicants and expedite the approval process.12 Fully utilizing the RRIF program would lead to the creation of over 100,000 full-time jobs.13

Extend and Expand the Tax Credit for Rail Infrastructure Investment

The rail industry already invests a greater percentage of its revenues back into infrastructure than most other industries. But to maintain their market share and avoid shifting freight traffic to already-congested highways, railroads may need to dig even further into their pockets.14 This can be particularly difficult for “short line” railroads, which tend to be smaller companies that carry goods a relatively short distance. To help fill this investment gap, Congress should maintain the current tax credit for short line rail infrastructure investment, and extend eligibility to newly-formed or expanded short line railroads.15

Incorporate Rail into National Freight Planning

Despite its contributions to the transportation system, rail is rarely given the same level of priority as highways in federal policy.16 Going forward, Congress and the Administration should be sure to account for the needs of America’s freight rail in all applicable transportation authorization legislation, freight studies, and infrastructure funding mechanisms.