Wednesday, February 20, 2008

Will Massive Railroad Infrastructure Fundamentally Change US Transportation Logistics?

From Supply Chain Digest:

Growth of Imports, Fuel Costs, Green Movement, and Congestion all Favor Rail over Trucks; Return to “Working on the Railroad” in Big Numbers

For the first time in nearly a century, US railroads are massively investing in their networks and other infrastructure. The end result could have a substantial effect on transportation management for many companies.

As railroads add and upgrade track and purchase engines and cars, capacity and service should continue to improve, negating some of the factors that serve as barriers to more companies to move from truck to rail.

Finally, Returns on Invested Capital

The railroad industry has traditionally had among the worst financial returns on its invested capital among all industries in the US. For decades, volume growth was slow, as a changing US economy and supply chain dynamics favored trucking to move freight....MORE