AAR: Freight railroads tightly connected to international trade

The Association of American Railroads (AAR) today released an assessment of the impact international trade has on the freight railroad industry, finding that at least 42 percent of rail traffic and more than 35 percent of annual rail revenue are directly tied to international trade.

About 50,000 domestic rail jobs accounting for more than $5.5 billion in annual wages and benefits depend directly on international trade, according to an analysis of 2014 data, AAR officials said in a press release.

If rail traffic indirectly associated with trade is included, the figures would be higher.

As President Donald Trump and members of Congress discuss the role of trade, imports versus exports and manufacturing, the AAR report provides a reminder "that today's global economy is firmly established and cannot be easily undone with rushed policy modifications," AAR's press release stated.

Doing so would be counterproductive to the freight-rail industry and overall economy, according to AAR.

"Efforts that curtail overall trade would threaten thousands of U.S. freight-rail jobs that depend on it and limit essential railroad revenues used to modernize railroad infrastructure throughout North America," said AAR President and Chief Executive Officer Edward Hamberger.

"For a highly capital-intensive industry that has spent $26 billion annually in recent years, private investment is the lifeblood of a freight-rail sector that must devote massive sums to safely, efficiently and affordably deliver goods across the economy," Hamberger added. "Upending the ability of railroads to do so by undermining free trade agreements that have done far more good than harm would have far reaching effects."

AAR's report examined rail movements using data from the 2014 Surface Transportation Board Waybill Sample, other government data and information from U.S. ports and Google Earth.

Trade-associated rail traffic included movements of coal for export from ports in Maryland, Virginia, the Gulf Coast and the Great Lakes; paper and forest products imported from Canada into the Midwest, as well as paper products exported from the southern United States; imports and exports of Canadian and Mexican automotive products to and from auto factories in dozens of U.S. states; containers of consumer goods from Asia coming ashore in California, Washington, Georgia, Virginia and New Jersey; plastics shipped by rail from Texas and Louisiana to the East and West coasts for export to Europe and Asia; iron ore mined in Minnesota and shipped by rail to Great Lakes ports; and Midwest-grown grain carried by rail to the Pacific Northwest and the Gulf Coast for export.