ECONOMIC AND FISCAL IMPACT ANALYSIS OF CLASS I RAILROADS

Transcription

1 ECONOMIC AND FISCAL IMPACT ANALYSIS OF CLASS I RAILROADS DR. DARAIUS IRANI, CHIEF ECONOMIST SEPTEMBER 28, 2016 TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 1

2 RAILROAD INDUSTRY OVERVIEW In the U.S. alone, there are approximately 140,000 miles of freight line, the majority of which are operated by seven major class I railroads: BNSF Railway Co., CSX Transportation, Grand Trunk Corporation (the majority of Canadian National s U.S. operations), Kansas City Southern Railway Co., Norfolk Southern Corporation, Soo Line Railroad (all of Canadian Pacific s U.S. operations), and Union Pacific Railroad Co. These seven Class I Railroads account for approximately 90 percent of railroad employees, 94 percent of freight revenue, and 69 percent of freight rail mileage. Freightrailworks TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 2

3 CARGO The U.S. leads the world in freight rail at 1,770 billion ton miles, followed by: China with 1,373 billion ton miles, and Russia with 1,290 billion ton miles. Coal transportation was responsible for 39 percent of tonnage, 20 percent of carloads, and 19 percent of revenue for all U.S. Class I Railroads in Chemicals transportation was responsible for approximately 10 percent of tonnage, 7 percent of carloads, and 14 percent of revenue for all U.S. Class I Railroads in In 2013, gravel was the most transported commodity by weight, while machinery was the most transported commodity by value. Baltimore Business Journal TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 3

4 TOP COMMODITIES FOR ALL MODES OF TRANSPORTATION by Weight or Value, 2013 Sources: U.S. Department of Transportation (USDOT), Bureau of Transportation Statistics, and USDOT, Federal Highway Administration, Office of Freight Management and Operations, Freight Analysis Framework, version 3.5 TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 4

5 TOTAL INFRASTRUCTURE AND EQUIPMENT SPENDING Since 2011, spending on infrastructure and equipment has increased to an average of nearly $26 billion per year. In 2014, railroad capital and maintenance expenditures topped $28 billion and are estimated at $29 billion for Billions of 2014 $s Sources: Association of American Railroads, RESI TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 5

6 MAJOR CLASS I RAILROADS EMPLOYMENT IMPACTS The products that railroads move include components that are vital to a number of important industries; in turn, these industries support not only the rail industry but a number of jobs and significant economic activity IMPLAN, RESI TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 6

7 IMPACTS According to RESI s analysis, Class I Railroads operations and capital investment supported approximately: billion in output (1.6 percent of total U.S. output), and $88.4 billion in wages (1.3 percent of total U.S. wages). Class I Railroads Total Economic Impacts, 2014 IMPLAN, RESI Total Fiscal Impacts IMPLAN, RESI TOWSON UNIVERSITY, DIVISION OF INNOVATION & APPLIED RESEARCH 7

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