Why U.S. Freight Trains Are So Much Better Than Passenger Rail

The United States lags behind the rest of the world when it comes to passenger trains but when it comes to the freight railroad the U.S. is dominating. The U.S. freight rail network operates over 140,000 miles of privately-owned track in every state except Hawaii, according to the Association of American Railroads. It moves one-third of all U.S. exports and roughly 40% of long distance freight volume.

It competes directly with the trucking industry to move goods around the country. Shipping everything from coal to cars to chemicals. And with the rise of e-commerce companies like Amazon, trains are increasingly moving consumer goods as well.

There are seven major freight railroads that connect North America. Union Pacific and BNSF dominate the west. CSX and Norfolk Southern are the primary east coast operators, while Kansas City Southern, along with Canadian Pacific and Canadian National run routes north and south. Amtrak, which is the United State’s passenger service, owns only 3% of the country’s rail.
In 2019, the five top railroads in the U.S. had a total operating revenue of more than $71 billion dollars.

But the freight rail industry’s success has not come without its challenges. The industry has dealt with bankruptcies, the lack of demand for coal and the more recent supply chain bottlenecks and rise in thefts. The seven top railroads, which own the majority of the tracks in North America, have also been criticized for power over the rail industry.

CNBC explores how freight railroads became so profitable and how the industry plans to evolve to stay on top.

Correction (February 3, 2022): At 1:41, Craig Fuller incorrectly states Amtrak is for-profit but Amtrak is not a for-profit corporation.

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Why U.S. Freight Trains Are So Much Better Than Passenger Rail

[Schlabbeflicker]

Honestly, the low employment figures of rail relative to its' gross and net revenues is strongly indicative of just how efficient and profitable the industry is.

[chrismorrissey]

When one of these giant freight trains drive through parts of Illinois and Indiana the track is often on street level in the middle of busy areas of small towns. They can routinely take between 3 to 6 minutes to fully pass by. It's one of the longest Loading Screens you experience in real life

[WideWorldofTrains]

Railroads also "Borrow" each others power (Locomotives) on an as-needed basis. They reconcile the accounting for this at the end of the year. This is why you may see a BNSF engine 1000 miles off their territory on the east coast. Also I have noticed combined trains in the last several years due to PSR. Also no coal trains anymore here in NY, I used to see them almost daily.

[kentslocum]

I have always desired to see more passenger rail in the US, but I think we need more mass transit in general, especially in urban areas--trolleys, streetcars, and lightrail.

[thesethtucker]

Anybody else bothered that the title of the video is inaccurate? The video told virtually nothing about freight trains vs passenger trains, but was basically all about the freight rail industry vs the freight truck industry. It was definitely an interesting video, but terribly named.

[maxwellvandenberg]

Why is the unprofitability of amtrack always a talking point, but not the unprofitability of roads? Maybe there are other reasons for public utilities than profit and this is a silly double standard that benefits the oil industry?

[anthonydiaz]

There is no labor shortage in trucking. There's a pay shortage.

[mattbosley]

Because the freight companies own the tracks and the passenger company (Amtrak/government) doesn't. So Amtrak gets pushed aside whenever a freight train comes along. That's why it takes them forever to get anywhere. The only place they own any of the tracks they use is in the Northeast where they have the high-speed Acela line from Boston to D.C.

[A_Shihtzu]

TLDR Trains carry a lot of stuff long distances for a solid cost/Ton moved, private companies own the rails passenger trains uses, so freight are higher priority on their own rails.

[CEOable]

Hopefully, passenger railroads in the United States will improve one day.

[heathwirt]

The upper level management types use the term "efficiency" loosely, they are mostly referring to return on investment and not shipping costs to end users of the freight systems.

[bChipps]

If only the government saw trains as an option. It would be perfect for medium distance travel. Traveling from Chicago to Detroit, Nashville, Cincinnati and city in between. Same for LA, SF, , and Vegas. Would totally drive commerce up in many smaller cities which have struggled.

[ninehundreddollarluxuryyac]

It used to take two guys to run the train.
Now the train will be able to drive itself,
but it needs ten guards to keep people from stealing the cargo.

[SirMangoMantango]

10:00 Why do you never mention that they recently laid off a lot of the track security personel that usually were able prevent it?

[jrb]

One factor that will impede the trucking industry is the increasing congestion on the interstate highway system - by trucks. Sometimes all you see are 18-wheelers jostling with each other on the road, and the occasional car stuck in the mayhem. Our interstates cannot handle a large increase in truck traffic, and we will have to rely more on the rail networks.

[SuffixezHD]

I've worked as a intermodal contractor (13 years and counting) for just about every Railroad in America, besides CP. Out of all of them BNSF is by far the best to work at. Railroads that have adopted PSR seem to be the worst to work at. PSR's profit over safety is one of the major reasons why derailments are way up amongst other things. Cost cutting just to make profits seem bigger will without a doubt cost more in the long run.

[rkgsd]

I thought 18 wheelers had largely replaced freight trains in the US. This story helps bring clarity to the situation.

[CannabisTechLife]

Railroad owners point to Amtrak and say "look how unprofitable and space waste this is on our rails".


In reality Amtrak's low profits are the result in putting freight trains always higher priority than passenger trains which adds to passenger delays, and drop in ridership for more reliable / faster transportation like cars or flying.


It's the same thinking as politicians screaming how bad the postal service is when in reality we have lowered funding year over year for it. It's bad because we prioritize it to be bad.

[airops]

Instead of more regulation, maybe we should just stop subsidizing the trucking industry. Tax them properly for their disproportional impact on road maintenance costs. Also implement a carbon tax. Once the negative externalities have been taken into account, rail will always come out ahead for good reason. It's just better for society.

[eugenecraig]

Having ridden trains in Korea, England, Germany and Franch, their rails have dedicated tracks and are not delayed by commercial rail like in the US. You can generally set your clock to their schedule. Delays are fairly common for Amtrack as they have to "pull-over" and allow commercial trains to pass (New Orleans to Chicago).