INTRO Goal Rail Infrastructure Funding Program the Increasing Demand from Around the Country

March 2003

The increasing demand from around the country for solutions to gridlock, both freight and passenger, has led to the creation of a national coalition, Rail Advocates for Infrastructure Legislation (RAIL). The goal of this coalition is to advocate for the creation of a national rail infrastructure funding program to invest in and improve the condition and capacity of the nation’s freight transportation system, to best serve the expected growth in domestic and international trade. It is also the goal of this Coalition that a national rail program would provide the necessary infrastructure to support transit commuter and intercity passenger service. Coalition membership consists of business organizations and government agencies representing metropolitan regions struggling with congestion (a full list of membership is attached). Metropolitan regions across the country have been experiencing increased volumes of traffic traveling on clogged interstates and antiquated and disconnected rail networks. These regions are looking to the reauthorization of the federal transportation act for relief, and are calling for the establishment of a national rail infrastructure program to help finance needed freight rail projects with public-private benefits.

For additional information contact: Steve Schlickman, Coalition Manager Schlickman & Associates 203 N. Wabash Avenue Suite 1800 Chicago, Illinois 60601 312-920-0132 Fax 312-641-5736 E-mail: [email protected] Need for a National Rail Infrastructure Program

Congestion relief is desperately needed on the nation’s freight and passenger transportation network. Already gridlocked at critical junctures, the nation’s freeways and railroads have Investing in rail is a limited capacity to absorb the expected increase in passenger cost-effective solution and freight traffic that will accompany population and trade to gridlock. growth. With limited funds available to address the looming transportation crisis, investing in rail is a sensible, cost- effective choice.

The reauthorization of the federal transportation bill offers an opportunity to create a national funding program for rail infrastructure. The rail investment program needs to be a A stable, dedicated rail stable, dedicated source of funds to ensure the planning and funding program will construction of long-term projects with public benefit. Rail bring congestion relief, infrastructure improvements will raise the capacity of our improved safety, and transportation network for both goods and people; increase greater efficiency. safety along the rail network; and improve the environment wherever congestion is relieved and waits at grade crossings are eliminated.

Rail investment need not be a subsidy; a national rail improvement program could be loosely patterned on the current treatment of the aviation industry. Federal aviation funding mechanisms sustain the infrastructure programs that under gird a competitive industry. Public investment in the Projects that offer the nation’s rail network is particularly important because it will greatest public benefit allow for the realization of public benefits that otherwise require a public source would go unachieved. Projects such as grade separations offer of funds. tremendous public benefit – in improved community livability, environment, and safety – yet offer little return to the industry. Public investment in such projects also will serve as a catalyst for public/private partnerships, spurring further rail investment.

RAIL is a coalition of business organizations and government agencies representing metropolitan regions across the United States. Need for a National Rail Infrastructure Program

The federal highway system has been unable to meet demand, despite relatively high funding levels. State, local and federal highway funding totaled $770 billion from 1990 to1999. Yet, Even with heavy the Texas Transportation Institute’s 2002 Urban Mobility spending, the highway Study of congestion in urban areas found that areas with system has been unable “undesirable” congestion levels had basically doubled, from 29 to handle the traffic. percent of the total in 1990 to 56 percent of studied areas in 2001.

The already overburdened highway system faces an even greater load in coming years. International trade will triple, and domestic trade will double in the next twenty years, according to the American Association of State Highway and Transportation Officials (AASHTO). During this same period, the Federal Highway Administration (FHWA) expects overall freight tonnage to increase 67 percent. Interstate highway traffic will increase 42 percent, including a 54 percent rise in Congestion will get worse truck traffic. At current levels of rail investment, the rising before it gets better. tide of trade will overwhelm rail capacity as well. The spillover, described in AASHTO’s Freight Rail Bottom Line Report, will by 2020 shift “almost 900 million tons of freight and 31 billion truck miles of travel to the highways. The business cost to shippers is estimated at $326 billion; the cost in travel time, operating, and accident costs to highway users is pegged at $492 billion, and the costs in added highway maintenance is $21 billion over the 20-year period.”

Financial constraints at all levels of government, particularly among the states, severely limit the resources to build new highways or increase capacity on existing routes. The relatively high funding provided by TEA-21 has still left an There simply is not annual shortfall of approximately $25 billion just in highway enough money available and bridge maintenance spending relative to needs. Even if to solve the capacity funding were not an issue, the lack of space for additional shortfall with highway lanes in built out urban centers and environmental concerns construction alone. would restrict our ability to increase passenger and freight capacity by investing in freeways. Passenger and freight traffic is increasing rapidly, and we will either craft a national, multi-modal solution in which everybody wins or we will all lose together. Relief

Railroads are an effective way to meet the nation’s growing freight mobility challenges. For freight carrying capacity equivalent to a four-lane highway (that trucks must share with cars), a railroad requires a double track line consuming just Look to the rail network one-fourth of the land needed for the highway. Building the for a viable, cost- double track railroad costs $1 to $2 million per mile compared effective alternative. to $10 million per mile for highway construction. Upgrading, enhancing and expanding capacity on the nation’s freight rail network could relieve congestion on the roads, while improving efficiency and safety.

Freight rail transportation is already a key component of the national transportation network. Rail has a cost advantage relative to trucking for distances greater than 500 miles. The cost to ship by rail from Los Angeles to Chicago, for example, is $0.30 per mile compared to the $1.00 per mile cost to ship by truck. This advantage is reflected in the large volume of international containers shipped from West Coast ports to the Rail makes sense. Midwest and elsewhere via rail. Firms and consumers across the country enjoy the competitive advantages and reduced costs made possible by these rail-supported global supply chains. Rail transportation benefits extend beyond economics and include enhanced health, safety, and quality of life. The EPA estimates that train locomotives emit three times less pollution than a typical truck. Also, locomotives are three times more efficient than trucks in regard to fuel consumption.

After a burst of mergers and industry-wide consolidation, railroads are rationalizing their industry and improving customer service. Capacity declines, intermodal rail yard Capacity constraints shortages, and rapidly rising domestic and international trade, limit the ability of rail however, have left the railroads feeling the effects of to provide congestion congestion and gridlock, too. A General Accounting Office relief across the (GAO) report released in 1999 found that inadequate rail transportation infrastructure at key points in the nation’s rail system is network. creating gridlock. Congestion at these chokepoints spreads, clogging the entire rail system.

Until recently, the railroads have been shedding capacity on underused routes, deferring maintenance, and making limited capacity investments on high-volume lines. This lack of investment was driven by low rates of return and profitability Railroads have not concerns. Today, Class I railroads have stepped up their invested enough in investment, committing $6.1 billion to capital improvements in capacity, and their 2000, and another $5.4 billion in 2001. Smaller regional and investment decisions shortline railroads, however, lack the fiscal capacity for similar are constrained by improvements. As one would expect, all railroads focus their the need to generate investments on projects with high expected returns for them, return on capital. particularly in terms of efficiency gains. This economic calculus often leaves projects with enormous potential gains for the public with a low priority.

There are numerous opportunities for public investment in rail projects that will offer definite public benefits. Under many scenarios, railroads are the most efficient way to transport freight and passengers while reducing highway congestion, Opportunity! improving air quality, reducing fuel consumption, and stimulating productivity and economic development. Public and private resources, if applied to improving rail capacity, could yield enormous congestion prevention.

If the forecast increase in freight moves primarily by truck, no trucks will move because of system-wide gridlock. The key, therefore, is to divert as much of the increase in freight traffic as possible to rail. (The relative shares of freight carried by truck and rail would shift only on the incremental increase.) This solution is preferable because a single intermodal train carries the same number of containers as 280 trucks, trucks that would take freeway space equivalent to 1,100 cars. The Improve the roads by system lacks the capacity for additional trucks and we cannot improving the rails. afford to add more. Interstate-95, which faces enormous increases in truck and passenger vehicle traffic, offers a poignant example. The Mid-Atlantic Rail Operations Study commissioned by the I-95 Coalition found that $6.2 billion in rail infrastructure investment is necessary just to keep I-95 at current congestion levels. Without the improvements, rail will not even be an option for the extra freight – which would then have to crowd onto the freeway.

Passenger rail service and rail-based transit system typically share infrastructure with freight rail. Improving the latter will thus help the former. The same congestion that makes it imperative to shift additional freight from the road to the rails is expected to fuel an increase in the number of people looking for alternatives to driving. Transit is expected to have the Rail can provide greatest growth in usage over the next 10 years, more than any passenger relief, too. other transportation mode. Both APTA and AASHTO estimate there is currently a shortfall in transit capitol funding in excess of $43 billion per year. A national rail infrastructure program will help provide needed assistance to upgrade rail infrastructure that supports both freight and passenger service.

In cities across the country with high truck traffic, there has been a backlash from the driving public. Motorists resent trucks for their contribution to congestion, fear sharing the Motorists resent trucks road with such large vehicles and would prefer that more for their contribution to freight be moved by rail. Strategy One, a Washington, D.C. congestion, fear sharing polling firm, conducted a national public opinion poll, which the road with such large showed 63 percent of Americans strongly favor moving more vehicles, and would freight by trains, especially when the alternative to adding prefer that more freight highway capacity could mean larger and longer trucks. move by rail. Additional polls have shown that 80 to 90 percent of the population does not want to share the roads with heavier or longer trucks.

The bottom line: investing in rail capacity will allow us to shift some of the expected increase in freight traffic volumes from the road to the rails. The shift will relieve highway congestion, and reduce the need to expand and build new highways, which we cannot afford.

RAIL is a coalition of business organizations and government agencies representing metropolitan regions across the United States. EXAMPLES OF PUBLIC-BENEFIT FREIGHT-RAIL PROJECTS Below is a sampling of rail projects from around the country as listed in AASHTO’s Freight Bottom Line Report. . Grade Separation Projects Eliminate up to 1,154 at-grade crossings in 34 states at a cost of approximately $4.5 billion.

. Track Relocation Projects Forty-five major track relocation projects in 14 states with an estimated cost of $2.0 billion.

. Mid-Atlantic Rail Operations Study (New Jersey, Pennsylvania, Delaware, Maryland, and Virginia) Physical and operational improvements to rail corridors paralleling I-95 and I-81. Estimated cost of $6.2 billion.

. Double-Stack Clearances from Columbus to Norfolk (Ohio, West Virginia, and Virginia) Upgrade existing rail line to allow for double-stack trains which will result in increased intermodal traffic. Cost has not yet been determined.

. Alameda Corridor East (Los Angeles, Orange, Riverside, and San Bernardino Counties, CA) Construct a 60 mile UP/BNSF rail trade corridor, extending the Alameda Corridor through southern CA counties with an approximate cost of $1.4 billion. The cost to construct the Alameda Corridor was $2.4 billion.

. Sandpoint Railroad Relocation (Idaho) Eliminate 3.5 miles of track through center of community and 17 at-grade crossings. Cost $7.5 million.

. Washington State “FAST” Corridor A program of 15 priority freight projects between Everett and Tacoma, including separations of at-grade crossings, railyard improvements, port access, and regional highway improvements. Cost is unknown.

. Central Utah Rail Project Construct 45-mile short line railroad from UP main line west of Levan, Utah to Salina, Utah near I-70. Cost of the project is not yet known.

. Gulf, Mobile, and Ohio Flyover (Chicago, IL) Elevation of former Gulf, Mobile, and Ohio Chicago-St. Louis mainline. Cost is $200 million. A soon to be announced “Chicago Plan” with more board infrastructure improvements to the Chicago region’s railroad network will have an approximate cost of $1 billion or more.

. Sheffield Flyover (Kansas City, MO) Elevation of a three-mile section of the east-west BNSF mainline and Kansas City Terminal Railroad through downtown. Cost of the project is $75 million.

. Virginia I-81 Corridor Improvements Improvements to the NS mainline in the I-81 corridor, coordinated with highway improvements to I-81. Cost is unknown.

. Tioga Terminal Rail Project (Pennsylvania) Provide direct rail service to marine terminal. Cost unknown.

. Georgia Short-Line Improvements Construction of a rail loop to provide rail service to a feed mill in southeast Georgia, and the rehabilitation of the 180-mile state-owned rail line between Vidalia, Georgia and Martha, Alabama. The cost is estimated at $6.6 million.

RAIL is a coalition of business organizations and government agencies representing metropolitan regions across the United States. RAIL Coalition Membership

Austin-San Antonio Corridor Council Chicago Area Business Leaders for Transportation City of Chicago Department of Transportation City of Seattle Illinois Department of Transportation Environmental Law and Policy Center of the Midwest Los Angeles County Economic Development Corporation Los Angeles County Metropolitan Transportation Authority New York City Economic Development Corporation On-Trac Texas Association of Rail Passengers

For additional information contact: Steve Schlickman, Coalition Manager Schlickman & Associates 203 N. Wabash Avenue Suite 1800 Chicago, Illinois 60601 312-920-0132 Fax 312-641-5736 E-mail: [email protected]