U.S. RAILHow the U.S. Rail System Works

By Noah Berman

Published 6 April 2023

A spate of train derailments, most notably in East Palestine, Ohio, has reinvigorated the debate over the nation’s railroad infrastructure. Here’s how U.S. rail could be brought up to speed.

·  U.S. rail infrastructure is divided between privately owned freight and state-owned passenger rail.

·  Freight rail is an integral part of U.S. supply chains, but the country’s passenger service falls far behind that of other advanced economies. Proposals to expand high-speed rail have faltered.

·  A recent flurry of high-profile derailments, including a disaster in East Palestine, Ohio, has increased scrutiny over the industry’s safety record and accelerating consolidation.

Coast-to-coast railroads helped build the modern United States into an economic powerhouse, and they continue to play an important if controversial role. Today, privately owned freight rail remains competitive with other modes of transportation, carrying energy supplies and crucial industrial materials. Spurred by decades of consolidation, a handful of freight companies have become increasingly efficient and profitable, but critics say these gains have come at the cost of poor labor conditions and weakened safety controls.

Meanwhile, passenger rail has struggled. Systems in Asia and Europe outpace those in the United States by a wide margin, leading to calls for more funding and proposals to build high-speed trains. But skeptics say the benefits of high-speed rail are overblown and the costs astronomical. After decades of disinterest from Washington, the Joe Biden administration is prioritizing infrastructure spending, with over $100 billion earmarked for investment in rail. 

What Is the State of U.S. Rail Infrastructure?
The U.S. rail network is among the most extensive in the world, comprising more than 140,000 miles of track. The majority of that network is owned and operated by freight rail enterprises. Amtrak, the federally chartered U.S. passenger railroad operator, runs on 21,400 miles of track, nearly three-quarters of which is leased from private companies.

The two categories of U.S. rail face starkly different economic outlooks. While freight rail companies have recorded record multibillion-dollar profits in recent years, Amtrak has run a billion-dollar deficit, with a repair backlog estimated at $45.2 billion. Amtrak’s prospects have further dimmed since the COVID-19 pandemic disrupted U.S. travel. In the last fiscal year before the pandemic, which extended from October 2018 to September 2019 (FY2019), Amtrak recorded a ridership [PDF] of 32.5 million trips and an operating revenue of $3.5 billion. By FY2022, neither ridership (22.9 million trips) nor revenue ($2.8 billion) had recovered to prepandemic levels.