Railroads: old industry still vital in today’s economy

From the January 2015 issue of the Monthly Labor Review comes an article entitled "Railroads: old industry still vital in today's economy..."

"In the early 20th century, annual revenues of railroads constituted the largest industry in America. This is no longer the case, but because of both economic growth and population growth railroad revenue exceeded $70 billion last year, and railroad employment rose to approximately 180,000, according the Association of American Railroads (AAR).

In Tracking the economy: an old industry chugs along (Federal Reserve Bank of Atlanta, EconSouth, May–August 2014), writer Charles Davidson describes how railroad companies are adapting to modern technologies and shipping techniques. Using new technology, the intermodal terminal shipping system—which transports cargo via multiple modes of transportation such as trains, trucks, and ships—tracks containers through the use of GPS. There are dozens of intermodal terminals in the Southeast and hundreds across the country, with CSX Transportation—one of two major railroads in the eastern United States—having more than 60.

There are double-container stacked freight trains more than a mile long crossing the country carrying coal, gas, and every commodity imaginable. After severe financial difficulties in the 1960s and 1970s, regulatory reforms helped railroads become more competitive. In the 1980s railroads were freed from the requirement of providing service where it didn’t pay. By discarding miles of unprofitable track, railroads now operate 140,000 miles of track, less than half as much as in the mid-1960s. Railroads also consolidated from 106 Class I, or major, companies in 1960 to 7 now. Today, five of those seven companies generate almost 90 percent of total railroad revenue..."

Railroad industry