Rail Outlook 2010: Inching toward a new normal

By Pat Foran, Editor

The North American economy's hit bottom and a recovery's coming, although when and how it'll begin its creep is anything but clear. No less hazy is what the rail landscape, during the run up to recovery, might look like.

Will freight-rail traffic volumes bounce at least part-way back in 2010? Will transit-rail ridership return to pre-recession levels? How will passenger-rail agencies cope with perennial budget crises this time around? And: How will the bandwagon that is high-speed rail actually alter the landscape?

Freight-rail execs and industry observers we talked with during the information gathering for this year's "outlook" coverage weren't as spooked about the year ahead as they were last year at this time (although transit execs fretted a bit) — instead, they exuded a sober concern and the requisite cautious optimism. Few were willing to wade too far into the 2010's waters, and what they did discuss during the wading process was general and, typically, conditional. About all they'd commit to as we went to press early this month was this: "The recovery, such as it is, will be gradual. We'll inch toward this new normal."

On this rail leaders were much more confident and clear: For all the environmental and economic-engine-type reasons they've been espousing in recent years, rail's going to be a key link — certainly, the key transportation link — as we turn the corner.

Rail As Stimulant, Still

A number of factors — some near-term, some longer out — could affect the effectiveness of that link. In particular, rail leaders and advocates point to what's percolating on the legislative front — notably, what the Association of American Railroads now terms as the "balanced competition" bill, the one the Senate Commerce Committee, chaired by John Rockefeller (D-W. Va.), has been crafting from behind closed and bolted doors for some time now. Sen. Rockefeller "has indicated he knows there needs to be more rail in the future, not less," said AAR President and CEO Ed Hamberger in late November, adding that he believed "we're getting close" to seeing something come out of committee as we went to press in early December.

Meanwhile, the soon-to-be-debated House "jobs" bill "might be a good place" for the freight-rail investment tax credit because "the ITC is worth real jobs," Hamberger said. And more jobs would nudge next year's inching pace — all the more reason the powers that be in D.C. should've pressed ahead with the proposed Surface Transportation Authorization Act of 2009, rail-transit leaders said. Instead, the Obama Administration supports an 18-month SAFETEA-LU extension.

"Congress is dealing with climate change and health care and other priorities, and we understand it's difficult for them to focus on this, but we believe part of the recovery is investment in highways and transit," American Public Transportation Association President William Millar told Associate Editor Angela Cotey last month. "It would be a great way to stimulate the economy and create jobs."

Yes, it would. For now, though, rail strategists will focus on the short stretch of real road in front of them, pressing ahead an inch at a time. For a bit more detail on what Class I CEOs are thinking about as they turn the page on 2009, click here. For a glimpse into the near-term world as transit-rail execs view it, click here.