US railways on track for $13bn infrastructure investment

[John Ashworth]

US railways on track for $13bn infrastructure investment in 2012

Posted: Wednesday, February 01, 2012, 9:41AM
Procurement Leaders

The Association of American Railroads (AAR) predicts that the nation's major freight railroads will invest a record $13bn in capital expenditures in 2012 to expand, upgrade, and enhance the nation's freight rail network.

According to AAR, continued infrastructure investments have reached record levels in the past three years. These investments include expenditures such as intermodal terminals that facilitate truck to train freight transport; new track, bridges and tunnels; modernised safety equipment; new locomotives and rail cars.

"Unlike trucks, barges or airlines, America's freight railroads operate on infrastructure they own, build and maintain themselves so taxpayers don't have to. And this year they are investing at a record rate to meet the demands of the recovering economy," said Edward R. Hamberger, AAR President and CEO.

In recent years, railroads have been spending roughly 17% of their annual revenue on capital expenditures, compared with the average US manufacturer that spends roughly 3% of revenue on capital expenditures, according to AAR estimates.

The freight railroads also expect to hire more than 15,000 employees this year, replacing retiring workers and adding new positions nationwide.