Railroad track productivity: A historical perspective

Four factors have historically governed improvements in railroad track maintenance-of-way (MOW) costs: economies of traffic density, technological improvements, network rationalization, and equipment productivity. This study demonstrates that the U.S. Class 1 railroad freight industry is saving $7 billion annually in MOW expenditures due to advancements in track productivity from the mid-1960s to the mid-1990s. MOW expenses over this time increased 6% (in constant dollars), but costs per revenue ton-mile dropped 39% and costs per gross ton-mile declined 28%. All of this occurred during a period where the demands on the track structure increased dramatically: revenue traffic volume increased 73% and the weight of the average freight carload increased 31%. By using mathematical extrapolation techniques to project costs from historical data, estimates of the savings originating from the four factors were calculated. The annual productivity savings due to density economies, advancements in track technology, rationalization, and equipment productivity are approximately $2.6 billion, $1.8 billion, $1.5 billion, and $1.3 billion per year, respectively.