OPINION — In a time of rising transportation costs brought on by the conflict between the United States and Iran, one part of America’s transportation network has kept its rates remarkably stable: the nation’s freight railroads.
Even as the railroads confirm their value to the economy, they face an uncertain future due to a challenging regulatory environment built on labor, safety and competition rules imposed more than 100 years ago, when railroads were arguably the nation’s most profitable and powerful industry.
Because railroads can move a ton of freight almost 500 miles on a single gallon of diesel fuel — three to four times the fuel efficiency of trucking — they have largely avoided the Iran-related cost spikes experienced by trucking companies. That efficiency has enabled retailers and manufacturers to shift freight to rail to control their transportation costs. For the week that ended June 16, U.S. intermodal spot rates averaged $1.16 per mile, compared with $3.05 per mile for over-the-road truckload shipping.
