Source: BTS and Association of American Railroads.

Rail Track Mileage and Number of Class I Rail Carriers, United States, 1840-2007

The evolution of rail transportation in the United States can be conceptualized as a cycle composed phases of introduction and acceptance, rapid growth, maturity and rationalization.

• Introduction (1830-1860). From modest beginnings and unsure technology, rail transportation emerged in the 1830s with the construction of numerous local lines in the East, dominantly in the Northeast. By 1840, 3,000 miles of tracks were laid, but rail transportation was still uncompetitive in view of waterways which had a wider coverage (e.g. Erie Canal, Mississippi). A set of independent feeder rail networks was being established. As the network extended, the Appalachian mountains were crossed in the early 1850s and rail transportation was able to compete more effectively in the resource-rich Midwest with 30,000 miles of track laid by 1860. The cost of moving farm produces and manufactured goods over long distances fell by 95% between 1815 and 1860. This demonstrated the capacity of the rail system to answer the needs of the national economy and insured a subsequent rapid phase of expansion.
• Growth (1860-1910). As the advantages of rail transportation became widely acknowledged, a massive phase of growth ensued and rail achieved dominance over the road and waterway modes. One priority was the construction of transcontinental line linking the East and the West coasts, which was completed in 1869. From that point, numerous branches and trunks were constructed leading to an interconnected national rail system. A standard gauge of 1.4351 meters was also agreed upon (in 1860, 23 different gauges were still in use). However, there were many accusations made stating that the rates charged by railroad companies were high and discriminatory, particularly because of the monopoly they had on several parts of the emerging railway system. In response, Congress created the Interstate Commerce Commission (ICC) in 1887, with the authority to regulate the rates railroads could charge. By the beginning of the 20th century, 193,000 miles of rail were in operation and several lines were being electrified.
• Maturity (1910-1950). This period marks the age of rail transportation dominance as by 1930, the 260,000 miles rail network accounted for about 65% of all the freight tonnage carried in the United States. Rail technology was standardized and showed little improvements in terms of speed. Competition from trucks was however starting to being felt, notably for short hauls. By 1950 the system was downsized to 223,000 miles of track. In addition, heavy regulations from the ICC led to a standard private sector response; lack of investments, increased accidents, reduced punctuality and the bankruptcy of several companies.
• Rationalization (1950-2000). The post World War II era was one of intense rationalization for rail transportation. By the 1970s, the US railway system was facing serious financial difficulties; several railway companies were going bankrupt, accounting for about 20% of the track mileage. Deregulation ensued. In 1980, the Staggers Rail Act enabled rail companies to fix their own rates, service levels, as well as to abandon or sell unprofitable rail segments. Between 1950 and 2000, 123,750 miles of tracks were abandoned which left the rail system with just below 100,000 miles of tracks in 2000, a mileage similar to the mid 1880s. Rail transportation was losing passengers to road and air modes at an accelerated rate, which meant loss of revenue and the abandonment of numerous passengers lines. While there were about 2,000 scheduled passenger trains per day in 1950, this number fell to 200 in the 1990s. As a result, rail transportation became dominantly freight oriented and the development of intermodal transportation in the 1970s justified further rationalization within the rail industry, mainly through mergers. Among the most significant was the Burlington Northern / Santa Fe merger in 1995, followed by the acquisition by Union Pacific of Southern Pacific Railroad in 1996 and the split up of Conrail between Norfolk Southern and CSX in 1999. Freight rates were cut in half. While in 1960, there were 106 rail operators, this figure dropped to 7 in 2005.
• Resurgence (2000-). As of the beginning of the 21st century, rationalization appears to be completed, leaving a more efficient rail system based on high capacity long distance corridors connecting major maritime gateways and inland terminals. These corridors are almost all double-tracked. Additionally, rail freight has faced a surge in demand linked with globalization, a level of de-industrialization of the North American economy, as well as rising energy prices making rail more competitive. The three most important factors behind the recent growth of rail traffic involve a growth of international containerized trade, growing quantities of utility coal being shipped to power plants (namely from the Powder River Basin) and the growth of Mexican trade. A new wave of investments along long distance corridors (double or triple tracking) and intermodal rail terminals has improved the efficiency and the capacity of the system. Prospects about the future of rail transportation appear positive.