The Eno Center recently brought together rail industry experts for a webinar to discuss efficiency, resiliency, and mode competitiveness in the freight rail sector. The webinar follows a report the Eno Center released entitled “Freight Rail for the 21^st Century: Opportunities for Mode Shift to Improve Efficiency and Resiliency.” The participants contributed to a lively and organic discussion that focused on several key issues facing the freight rail sector including rail’s market share, partnerships, infrastructure investment, technology, and government regulation.

The participants included:

Chuck Baker, President of the American Short Line and Regional Railroad Association (ASLRRA). The association represents Class II and III railroads across the country and provides them with the opportunity to connect and discuss important issues for the short line industry.

Luisa Fernandez-Willey, Principal Economist at Canadian National Railways (CN). CN is a Class I railroad spanning almost 20,000 miles and provides rail connections to customers in Canada, the US, and Mexico.

Henry Posner, Chairman of the Iowa Interstate Railroad. The Iowa Interstate Railroad is a Class II railroad that serves customers across the Midwestern US. Posner also serves as the chairman of railroad companies in France and Germany.

The State of Freight Rail

The United States boasts the largest freight rail network in the world. Freight rail is a major contributor to the nation’s ability to move coal, grain, chemicals, mixed goods, and container traffic. With its major presence in the freight network, rail brings with it numerous benefits. Rail is a relatively safe mode of transportation, with fewer accidents compared to trucking. It can move large amounts of goods, and reduce traffic on highways, leading to reduced congestion and roadway degradation. Rail is also an environmentally friendly option for freight movement, contributing two percent of the transportation sector’s Greenhouse gas emissions.

The panelists pointed to rail as a valuable asset in the freight network, but Baker made an important consideration, that despite the value and benefits of rail, trucking remains the dominant mode of freight transportation in the US. According to the consulting group Oliver Wyman, freight rail productivity and volume grew from the 1980s to the 2010s, but started to stagnate in 2015, while trucking ton-miles have grown steadily since 2000. Posner probed the panelists to discuss why freight rail struggles to maintain market share in the freight network, despite the fact that “everyone knows about the benefits of rail.”

One difficulty rail struggles with is in short haul freight movements. Freight rail loses to trucking due to ease of use and lack of last-mile infrastructure. Baker noted that if a customer wants to ship by rail, they have to go through numerous phone calls and special car requests; all things that add time and complexity to the shipping process, while the process to move by truck is easier.  Customers that want to ship door-to-door by rail must have tracks at their facilities that connect to the rail network. Without that direct rail connection, customers will use trucking for the first or last-mile movement of goods.

Another issue has to do with the Highway Trust Fund (HTF), which provides funding for highway maintenance and improvement. The HTF struggles to stay afloat from gas tax revenue and has relied on the federal government transfers from the general fund into its account. Baker pointed out that the HTF’s reliance on general fund transfers is essentially a subsidy for rail’s chief competitor. Fernandez-Willey noted that trucking is not responsible for investing in the network they use to move goods, unlike private rail companies that are responsible for maintaining and improving the rail network. Rail is responsible for investing in its network while trucking is using a network that is mainly supported by the federal government.

Areas of Opportunity

Transloading

An opportunity to boost rail competitiveness with trucking that the panelists pointed to was in transloading. Transloading refers to the practice of unloading goods themselves from one mode and then loading onto another. This is different from intermodal which moves the same container from origin to destination. Intermodal is a seamless transfer of containers from mode to mode, but transloading offers flexibility to move bulk goods efficiently. Baker noted that railroads often focus on transloading, which allows them to access customers that are not directly on the rail line and compete with trucking in short haul freight movement. Fernandez-Willey provided an example of a CN transload facility at a steel company in Michigan that allowed the company to shift steel coil movement from trucking to rail.

Maintaining Partnerships

According to the panelists, collaboration between railroads maintains competitiveness and ensures efficiency. As Baker noted “every move is a partnership.”  Short lines gather freight from different local communities and then connect to Class I railroads who move and distribute large quantities of goods across the network. Companies can leverage the connection between short lines and Class I railroads to strengthen rail’s ability to reach local markets and offer modal options for shippers, taking trucks off the road and reducing congestion.

Railroad partnerships extend beyond short line-Class I collaboration. Examples of partnerships between Class I railroads exist in various intermodal agreements. In 2025, CN and CSX entered into a partnership that introduced a new intermodal service to Nashville, opening up Western Canadian traffic to ports along the east coast. BNSF and CSX formed a similar agreement in the summer of 2025 to introduce new intermodal services connecting southeastern markets to ports in Southern California. These partnerships allow railroads to work with each other to move goods more efficiently across the country by opening access to each other’s markets.

Posner’s perspective included the marketplace as the ultimate regulator, forcing railroads to cooperate in order to compete with trucks. For example, the Iowa Interstate Railroad operates alongside other railroads in the same space to capture a share of the market. In the case of the Iowa Interstate, the marketplace promotes the existence of more connections between places, in a way that also ensures the resiliency of the local freight network.

Infrastructure Investment and Planning

Rail infrastructure that is in a state of good repair helps railroads maintain their ability to ensure efficient movement of goods. While basic maintenance is not an exciting or innovative infrastructure solution, it provides the foundation to keep a railroad operational. Raising track beds, maintaining ballast and drainage systems are examples of strategies that keep railroads operational during normal conditions and able to withstand the impacts of disruptions.

As private companies, railroads take on the responsibility of investing in their infrastructure, but public investment in rail can support smaller short lines, which may struggle to fund large projects. Responding to a question from Posner, Baker mentioned several federal grant programs like CRISI, the rail crossing elimination program, and BUILD that provide federal support for rail infrastructure projects. Short Lines have benefited from CRISI in particular, leveraging federal dollars to embark on large capital projects, such as expansions or track replacement, which increase their capacity to move more goods. Alongside federal funding, state DOTs have smaller grant programs, and Baker suggested that at the state level, there is an opportunity for rail to be better included in state DOT freight planning.

Technology and Regulation

Responding to Posner, Fernandez-Willey raised the importance of technology in strengthening freight rail, and how railroads are leveraging technology to improve efficiency. For example, CN uses automated track inspection, in which trains have technology aboard that scans the track as the train is moving. The scanner sends train crews real-time data on the state of the track, while the train is moving, removing the need to stop a train and conduct track inspections which can halt traffic. However, current regulations mandate human visual inspection, in which a person walks along the track to check for issues. Railroads must close sections of track while conducting human track inspections, delaying trains and reducing railroad efficiency.  Fernandez-Willey suggested that the regulation is overly prescriptive and recommended modernization of regulations to reflect the existence of newer technologies.

Baker referred to Parallel Systems, a company offering autonomous rail solutions specifically as an alternative to short haul trucking.  The Federal Railroad Administration mandates two-person crews on trains, which limits the ability for railroads to tap into autonomous technologies from companies like Parallel Systems and run trains without a person on board. Meanwhile, USDOT’s AV 3.0 and AV 4.0 policies signal the government’s interest in autonomous vehicle technology, including trucking. Baker’s perspective was that reasonable regulations that are not as heavy handed on railroads are a strategy that can boost railroads’ ability to adopt new technologies and remain competitive.