What is in store for Rail in 2018?

Rail

Photo Source: American-Rails

“We feel very good about the future and look forward to next year. We are committed to provide superior service to our customers, and with the volume growth momentum still ahead of us, we see good growth opportunity. A major focus as we move into 2018 is putting more of our resources in place: the people, the equipment and the capital investments.” — Canadian National President and CEO Luc Jobin

What’s the state of the rail industry in 2018? Today’s modern railroads face diverse and unique challenges in daily maintenance projects. There is a lot to be optimistic about in the coming year for rail, though at the moment it is a cautious optimism. A strong U.S. economy and increased consumer confidence could potentially bring new investments and policies that would positively affect all levels of infrastructure throughout the country.

Overall, 2017 was a good year for the rail industry, with the ASCE’s report card giving it the only strong grade of its infrastructure report card. NASDAQ also reported strong growth for railroads in the third quarter due in part to improved focus on deliverables like coal.

Of course, there are challenges to overcome that could impact the industry. Some lawmakers have called for budget cuts, stating that trains are not profitable. National Association of Railroad Passengers (NARP) President and CEO Jim Mathews responded by saying “those in Congress who believe that passenger rail is not profitable are mistaken. What they don’t see is the big picture. A robust national–and international–intermodal transportation system is crucial to economic growth, especially in those rural and less wealthy areas where travel options are already limited.”

Uncertainty with the North American Free Trade Agreement could also be a factor that greatly impacts the rail industry. Railroads such as the Kansas City Southern that deal heavily with Mexico could potentially feel the repercussions of the deal falling through.

Union Pacific’s Lance Fritz highlights Mexico is a strong business opportunity. “Despite uncertainty around NAFTA, we consider our Mexico business an opportunity that could benefit some of our submarkets. Union Pacific moves 70 percent of U.S. freight-rail shipments to and from Mexico through gateways at Brownsville, Laredo, Eagle Pass and El Paso, Texas; Nogales, Arizona; and Calexico, California. We support trade that helps the U.S. and Mexico economies grow.”

As new infrastructure plans and investments are revealed, the railroad industry’s future will become clearer. We hope it’s a bright one.

About WVCO’s Railroad Division
The Willamette Valley Company’s Railroad Division is the industry leader in providing innovative new products and application systems for today’s railroads. The Railroad Division’s proprietary product, SpikeFast®, has quickly become the most sought-after and reliable product for plugging spike holes.The Railroad Division also offers other railroad tie products for wood and concrete ties, and unique application systems to accurately and consistently apply proven products.

Sources:

https://www.globalrailwayreview.com/article/63203/expanding-passenger-rail-u-s-economy/

https://www.globalrailwayreview.com/news/62949/report-amtrak-cuts-cost-billions/

http://www.nasdaq.com/article/railroad-industry-outlook-december-2018-cm886615

http://www.progressiverailroading.com/rail_industry_trends/article/Outlook-2018-For-Class-I-railroads-moderate-growth-is-the-best-guess–53413

A Look at Infrastructure’s 2017 and 2018

US Infrastructure

Photo Source: Inhabitat.com

As 2017 comes to a close it’s the ideal time to reflect on the year and look towards the future. Specifically, the present and future of the United States’ infrastructure.

In the views of many, 2017 could have been a better year for infrastructure.The American Society of Civil Engineers (ASCE)’s 2017 report card gave infrastructure a national grade of D+.This grade is based on a total average of individually graded categories, such as aviation, schools, drinking water, and energy to name a few. The one category where infrastructure is succeeding is Rail, the highest rated category at a B rating. Find the grading breakdown of the report card here.

ReportCard

Image Source: ASCE

So how can infrastructure improve in 2018? The ASCE offers several solutions to raise the grade. One such improvement is for leadership to be emboldened. As ASCE President Dr. Norma Jean Mattei puts it “we need our elected leaders – those who pledged to rebuild our infrastructure while on the campaign trail – to follow through on those promises with investment and innovative solutions that will ensure our infrastructure is built for the future.”

Another such solution offered would be to increase sustained infrastructure investment, specifically from 2.5% to 3.5% of U.S. Gross Domestic Product (GDP) by 2025. Their third recommendation would be to ensure that infrastructure is more resilient and sustainable in order to prepare it for the future.

Will these solutions be implemented? It may be too early to say. The current administration has promised to announce their infrastructure plan and will reveal spending for the next few years. If the promise of $1 trillion worth of infrastructure investment is true, then it is very possible we may see the report card grade improve drastically in the coming years. One thing is certain: 2018 and the new infrastructure plan will bring drastic policy changes that will be felt throughout all facets of infrastructure.

Sources:

https://www.infrastructurereportcard.org/

https://www.asce.org/templates/press-release-detail.aspx?id=24013

http://thehill.com/policy/transportation/363813-trump-to-release-infrastructure-plan-next-month-report