Freight Rail Transportation: A Review of the 2004 Experience

In 2004, the freight rail industry in the United States faced a surge in demand for its services as the economy expanded, international trade increased, and farmers harvested bumper crops of grain. As demand for transport by freight rail heightened, policymakers, shippers, and transportation analysts expressed concern over whether the railroads would be able to meet shippers’ needs. This Congressional Budget Office (CBO) paper—prepared at the request of the House Committee on Transportation and Infrastructure—examines the confluence of events that led to last year’s rise in demand for rail transport and analyzes measures taken both by the railroads and by shippers to accommodate that demand. The review suggests that although some shippers did experience delays and added costs, major disruptions to the overall economy were avoided. In keeping with CBO’s mandate to provide objective, impartial analysis, the paper makes no recommendations.