As US election day dawns, the American rail industry is gearing up to find out what the new administration has in store for its future.
The Covid-19 pandemic is having serious impacts on the US’s entire infrastructure sector, with passenger rail particularly feeling the strain of reduced traffic, long-existing inefficiencies and chronic underfunding.
Candidates Donald Trump and Joe Biden have diverging priorities when it comes to this sector.
The Trump administration was responsible for a major cut to the US Department of Transportation’s funding in early 2017, but in the years since has fed money into rail projects in states such as Arizona, Indiana and Oregon. In September, the administration announced that it would invest $1bn in American infrastructure through the ‘Better Utilizing Investments to Leverage Development’ (BUILD) Transportation Discretionary Grants programme.
Looking ahead, research from Bloomberg Intelligence (BI) claims that a Democrat leadership could play a key role in helping the rail sector back on its feet after the pandemic. It also warns that Trump could end up relegating the railways to the sidelines in favour of road transport and fossil fuels.
A struggling sector in need for revitalisation
According to BI senior industry analyst Sonia Baldeira, despite being one of the largest networks in the world – spanning some 202,501km – US railroads are unevenly distributed across the country and currently not leaving up to their potential. “The US doesn’t have a rail network that is able to connect multiple cities, nor a high-speed system,” she comments.
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— Future Rail Magazine (@FutureRail_Mag) September 3, 2020
Ongoing plans to build high-speed networks are underway in Florida and in California, though both have previously faced delays and, according to Baldeira, they can hardly be compared to other international projects. “In general terms, [US] passenger rail is far behind other parts of the world, like Europe and China,” she adds.
To make things worse, the network has seen further decline as a result of Covid-19, with federally owned rail company Amtrak currently operating with demand remaining at 25% of pre-pandemic levels.
Using rail to achieve a net-zero economy
Baldeira believes that a potential Biden administration could play a key role in turning US railways into an internationally renowned network. “Looking at what Biden proposes for the railway industry and how it compares these segments with other segments of transportation, it is clear that he is making a huge effort for enormous amounts of investment to be included in rail transport,” she says.
Biden is a long-term advocate of using trains as a sustainable alternative to roads and aviation and plans to make it a key component of his net-zero economy pledge. “This is [the opposite of what] Trump has promised to do and has done during his current administration,” she explains.
Under Joe Biden’s plan for a clean energy revolution and environmental justice, we will:
✅ Achieve a 100% clean energy economy and net-zero emissions by 2050
✅ Rejoin the #ParisAgreement on day one and rally the world to go further
✅ Stand up to polluters#ClimateTownHall pic.twitter.com/7UP1GoZYUv
— Joe Biden (@JoeBiden) September 5, 2019
The current President’s re-election campaign website mentions plans to invest in infrastructure programmes in rural areas, as well as rebuilding, bridges, railways, and other “vital infrastructure”. Yet Baldeira argues: “Most of his policies in the first term have been old school, largely focused on not changing the status of transportation in the US and based on cars, gas, incentivising road initiatives and highways.”
On the other hand, Biden is looking at examples in Europe and China to bring about a new rail-centric infrastructure network that relies on high-speed rail, increased connectivity and urbanisation, ultimately achieving what he described in his electoral campaign as the ‘Second Great Railroad Revolution’, three centuries after the first one in the 1830s.
With a fairly stable freight system already in place, Biden claims he will modernise and upgrade passenger rail throughout the country, building new high-speed tracks and faster connections between metropolitan areas, as well as creating more jobs in the manufacturing and infrastructure sectors.
“[Railways are] =a machine of growth for the economy,” she comments, pointing to the long-term benefits of investing in rail, following the example of the Eurostar and HS1 in the UK. “If you connect trains [in a better way], you can create a lot of jobs around them and support more opportunities in construction.”
Expanding urban connections with state funding
Crucial to achieving Biden’s plan will be availability of funds, which Baldeira says could come from existing US Department of Transportation loans and grand schemes. BI’s research claims that the US invests only 2.4% of its gross domestic product (GDP) in building and maintaining infrastructure – a modest sum compared to the likes of China (8%) and European countries (an average of 5%).
“Historically, Democrats tend to back more direct federal funding, whether financed by debt or higher taxes,” the paper reads. “At the same time, Republicans generally argue that better results can be reached at a lower cost by encouraging more private sector development. An infrastructure investment boost by 1% of GDP each year could generate $320bn in the economy alone in 2021.”
Biden also pledged to increase investment to improve and expand public transport networks across US municipalities by 2030. This would mean providing more workers with access to more sustainable and affordable public means of transport, including new light-trail networks and upgraded bus lines.
“Biden is trying to convince people that due to climate change there needs to be a transition of the economy and that we need to think about using more public transport,” Baldeira concludes. “This doesn’t mean that roads will [be forgotten] but that the railway industry, which contributed a lot to the economy in the past, has to be brought back, especially from the passengers’ point of view.”