The US transportation system developed oil dependent highway and air travel while neglecting other forms of transportation.This system worked fine as long as oil was cheap, but now that oil prices are not only rising but shortages are also foreseen, previously ignored methods of transportation are being given a second look.
The railroads declined as in the 1980's a large number of low cost, non union trucking companies entered the market.The railroads could not face the competition then.But now they seem to have got their act together. Computerization and improved efficiency have led to increased labor productivity.Improved technology and natural attrition over time has allowed them to shed excess labor, leading to improved profitability as well.
Thanks to booming global trade and rising fuel prices, it takes three times as much fuel to transport goods by truck as compared to railways, industry profit has doubled since 2003. This improved profitability is reflected in the share price of these companies. Ambitious investment programs have been chalked out to add track and terminals to handle the increased traffic. According to the Transportation Department, freight tonnage is expected to almost double by the year 2035. But passenger rail has continued to lag behind, although of late commuter lines have seen increased traffic. The reason for this is that America lacks a well developed passenger rail system that is both efficient and reliable. The European railway system holds important lessons for us.In fact their TGV system is faster than flying, over short distances. The railway industry, because of relative fuel efficiency compared to road transportation, is also projecting itself as a more eco-friendly alternative.
In an interesting study, Harvard Professor John R. Stilgoe predicts a resurgence in railroad development. Basing his arguments on the increase in real estate prices along railroad lines he has predicted that the time is not far off when motorists will switch to rail travel on a large scale because the savings in the cost of travel will become substantial.