The Federal Highway Administration has projected that U.S. freight tonnage will grow by more than 70 percent between 2006 and 2035 (FHWA, 2007, p. 11, Table 2-1). Transportation officials view an increased use of rail freight as a way to accommodate increased volumes without adding more trucks to the congested U.S. highway system. However, the U.S. railroad network consists of many fewer track miles than it did several decades ago, and shippers and policymakers are concerned that it has become congested and incapable of handling additional volume.

Concern about the ability of the U.S. railroad system to accommodate a significant...

The capacity of the rail network is determined by several parameters that span the physical and operational components of the rail system. To our knowledge, no universally accepted definition of rail capacity exists, but measures of capacity should be tied to the volume of freight that can be moved over a period of time across a certain distance. While track miles measure the extent of the rail system and motive power measures the ultimate amount of freight that can be moved, these measures do not indicate the productivity of these resources. James McClellan (2007, p. 32), a rail industry consultant...

Rail capacity and performance are interdependent in many ways. Increasing speed improves performance and can increase capacity, but running trains at different speeds can reduce capacity and overall performance. Other strategies to increase capacity, such as shedding traffic or raising prices, reduce rail’s value to some shippers. Reliability is important to all rail customers but may be measured differently; express parcel shippers measure delay in minutes or hours, while maritime intermodal shippers measure it in hours or days. Shippers of bulk commodities sometimes experience delays of weeks. While railroad capacity does affect speed and reliability, the mechanics differ from roads...

An analysis of aggregate data shows that the productivity of the railroad industry has improved since the Staggers Rail Act (P.L. 96-448) was passed. Since 1980, the railroad industry is many times more productive and appears to be financially healthy. The broad implication of this is that the industry has improved capability to generate capital that can be used to maintain and improve its network. The industry has also become more cost and service competitive with trucks for long-distance freight transportation than it has been in the past.

However, aggregate data are incapable of telling the whole story because there...