Future Rail Economic Competitiveness Overview
Future Rail Economic Competitiveness Overview
Rail freight will continue to have a competitive advantage over other modes due to the weight and volume of commodities shipped by rail throughout the OKI region, and the cost effectiveness of transporting over long distances, particularly agricultural and hazardous products.
However, new threats continue to arise for rail that hinder the mode’s economic potential. New proposed federal legislation being advocated by the trucking industry would increase the size and weight that trucks would be permitted to carry, making rail freight less competitive.
In 2020 and 2021, during the COVID pandemic and related spikes in shopping from home and e-commerce, trucking increased its share of all goods movement. Service issues during that time hindered the railroad industry. Railroad companies are currently addressing these issues through a major focus on hiring of rail employees, customer service, and delivery reliability.
Future Rail Commodity Values
In terms of the values of commodities shipped by rail in the region’s future, finished goods and high-value parts, such as transportation equipment, machinery and motorized vehicles, are expected to grow between 69% and 175% when compared with 2020 values. Other goods used in manufacturing, including plastics/rubber and chemical products, also fall into the 2050 list of top 10 commodities shipped by rail, with increases in value over the future three decades of 147% and 136%, respectfully.
Future Markets Impacting Rail Operations in the Region
With the Class I rail industry adopting strategies that are producing longer trains that travel over longer distances, future markets are being tapped that impact the OKI region. Industry representatives anticipate a steady growth in the movement of chemical products from the northeast to the region for distribution. This opens the door for related manufacturing of products, including pharmaceuticals, food & beverage, plastics, adhesives, and lubricants.
In addition, railroads anticipate an increase in market share from trucks hauling goods like automobiles, manufactured goods, grains, sweeteners, and vegetable oils. This anticipated increase is a result of forecasted congestion on roadways, not just in the OKI region but throughout the country that will impact the travel time, reliability, and cost of shipping by truck.
Future Rail Freight Employment
Railroad employment is expected to increase nationwide from 76,500 to nearly 80,000 workers in the next 10 years. This includes these railroad occupations:
- Locomotive engineers
- Rail yard engineers or hostlers and dinkey or small locomotive operators
- Railroad brake, signal, and switch operators and locomotive firers
- Railroad conductors and yardmasters
(Source: United States Bureau of Labor Statistics (BLS). Occupational Outlook Handbook: Railroad Workers. September 8, 2022.)
Norfolk Southern Online Hiring Advertisement
Source: Norfolk Southern Facebook Page. (December 2021).
In recent years, finding new employees in the region has been difficult. This is due to the competition for younger workers among other industries, including the trades, warehousing, and distribution. Because trains operate 24 hours a day, 7 days a week, rail operators cite challenging working conditions as the primary reason, making it difficult to recruit new employees. Escalating the problem is the railroad industry’s preference granted to seniority, so new employees are initially faced with working weekends, holidays, and overnight shifts. Rail staff serving on trains often face long hours or even days away from home and their families. These factors combine to make rail employment unattractive -- especially in todays’, post-COVID job marketplace -- where the availability of work flexibility has become one of the highest incentives for potential workers.
To freight rail’s advantage, on average, median wages are higher than those in other industries. Railroads are also working with local trade schools and community colleges to inform students of employment opportunities. They are also working to provide curricula on the key jobs and duties for rail operations, which could help ensure a pipeline for younger employees, as retirements and industry growth requires new workers.
Autonomous Rail as Future Labor Relief
Through the promise of reductions in or complete removal of humans from operations, autonomous rail freight technologies offer the hope of addressing current workforce gaps, not just in the OKI region, but across the globe.
Like passenger vehicles, rail automation technology can be defined through a series of levels or phases that note the advancement of the innovation’s performance capabilities and the reduction of human involvement.
Level One
Level one rail automation involves the use of only one human operator in the yard operating the vehicle remotely, unlike Remote Control Locomotives (RCL) which require the addition of an onboard engineer. This technology employs data transmitted using 4G/5G to provide a reliable, secure, and real-time view of the front of the train.
Level Two
Level two rail automation uses sensors, cameras, and audiovisual notifications to assist the train engineer as a type of non-human co-pilot in collision avoidance, signaling detection, and speed monitoring. Currently, this technology is only being tested in remote locations to assist industries such as mining. Level two would also include autonomous rail hopper, box or tanker cars operated in a controlled environment, such as a rail yard, by a single operator located in a facility or control tower on site.
Level Three
Level three technology would provide for a fully autonomous, self-driving rail train. This technology is not yet available for trial. With Europe’s zero emissions goals, OTIV predicts that fully autonomous train technology may be ready by 2040 for pilot use cases.
In terms of when we might see autonomous trains traveling on railroads in the U.S., the FRA has specific regulations and guidelines for developing, testing, evaluating, and approving the use of new technology. Like other U.S. Department of Transportation departments, safety is at the heart of FRA regulations. Based on Europe’s timeline, the current development status of the technology, and FRA’s stringent safety guidelines, it is highly unlikely that fully autonomous, Level three freight rail trains will be operating on main lines across the OKI region before 2050.
A Concept Rendering of Intramotev’s TugVolt Autonomous Rail Hopper
Source: FreightWaves. Disruption junction: Startup aims to replace locomotives with autonomous railcars. (November 4, 2021).