Freight rail, intermodal deliver for regional economy

Infrastructure is front and center right now with President Donald Trump unveiling his long-awaited $1.5 trillion plan to fix the nation’s roads, bridges, airports, waterways and seaports. While policymakers on both sides agree that our infrastructure challenges need to be met, they disagree on the details — most notably, how to pay.

It’s not something people think about every day, but healthy infrastructure is a building block for economic success. Here in Kansas City, where we’re conveniently located near the population center and geographic center of the country, our diverse and efficient transportation options continually pay dividends, attracting new businesses, supporting thousands of jobs and catalyzing economic growth.

This web of trains, trucks and ships working together is called “intermodal,” a reference to the universal shipping containers that can be moved across modes. Because intermodal shipping enables each mode to harness its relative advantages — trains over the long-haul and trucks for short-haul, for example — it creates major efficiencies for shippers and in turn helps keep costs low for consumers.

And Kansas City just happens to enjoy prime access to an anchor of the intermodal network, America’s freight rail system. Out of Missouri’s 18 freight railroads, several directly serve our region, including Class Is Union Pacific, BNSF, Kansas City Southern, Norfolk Southern and Canadian Pacific.

In recent years, intermodal has comprised the largest chunk of rail volume exiting in both Missouri and Kansas. Logistics Park Kansas City, or LPKC, in Edgerton, Kan., is an intermodal powerhouse, put on the map by BNSF’s recently finished $250 million intermodal terminal. The terminal helped attract Amazon, which began operations at its new fulfillment facility there last year.

Because of acquisitions like Amazon and other large retailers, brought to the region by efficient intermodal options, thousands have found work. LPKC initially hired 2,200 with the expectation of generating 13,000 more jobs over the next couple decades.

Freight railroads stand out in the intermodal network because they are the only mode that builds and maintains their own infrastructure — 140,000 miles of track across the country — using private dollars. This year they expect to spend $22 billion, bringing their total investment since 1980 up to more than $635 billion. This financial commitment continually bolsters safety, efficiency and innovation, a boon to shippers and consumers alike.

Robust growth in intermodal over the last few years is a great example of long-term infrastructure investments paying off. Rail companies have been working since the 1990s to create the intermodal capabilities they have today, from building new terminals in underserved markets, to expanding track capacity and bridge heights to accommodate double-stacked trains, to adding new technologies, like high-tech cranes and optical scanners, which allow faster movement and increased productivity.

“Infrastructure is pure commerce. Everything in this country moves. So an efficient transportation network is vital to our economic future,” wrote Missouri Rep. Sam Graves in a recent op-ed for RollCall.

Policymakers like Graves understand firsthand the economic need for steady infrastructure investment. They should also understand how freight rail’s ability to invest relies on smart public policy. Today’s balanced rail regulations, ushered in by the Staggers Act in 1980, enable rail companies to earn enough to in turn put back into the nationwide network, while still protecting shippers.

Our state and federal representatives should not only protect this crucial framework but also look to freight rail’s user-pay principle as a model for other modes as part of the larger infrastructure discussion.

Intermodal will only continue to grow in the coming years, with recent forecasts from the Federal Highway Administration forecasting that total U.S. freight shipments will increase 41 percent by 2045. This is good news for the economy and for consumers who benefit from intermodal’s efficiencies — a good thought to reflect on amidst the larger infrastructure discussion.

This story was originally published February 28, 2018 at 3:24 PM with the headline "Freight rail, intermodal deliver for regional economy."