America's railroad revival

Freight rail companies are pouring big money into new capital projects. Why? Read on.

Commuters in the United States are increasingly turning to commuter rail, subways, and light rail. But passenger rail isn't the only rail that's having success. The U.S. is also seeing a revival in its freight rail. Wall Street Journal reports:

North America's major freight railroads are in the midst of a building boom unlike anything since the industry's Gilded Age heyday in the 19th century—this year pouring $14 billion into rail yards, refueling stations, additional track. With enhanced speed and efficiency, rail is fast becoming a dominant player in the nation's commercial transport system and a vital cog in its economic recovery.

Railroad companies are investing in everything from massive new terminals to tracks that increase efficiency to improved bridges. It's projected that 2013 will be the third year in a row in which the largest railroad companies post record numbers in capital spending.

Why? Because freight rail demand is expected to grow at a steady pace in the U.S., growing by 50 percent to $27.5 billion by 2040, according to the U.S. Department of Transportation.

Plus, the cost to transport goods by rail is half of what it was three decades ago, according to WSJ, while trucking prices are rising. And with companies testing new trains that run on cheap natural gas , this revival looks to be in for the long haul.

Boom Times on the Tracks: Rail Capacity, Spending Soar [Wall Street Journal]

Photo: Flickr/SP8254

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