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Over the Horizon
Enhancing America's Railroads

by: Sen. Trent Lott       Filed 4/27/07 GCN

        Because of my service on transportation-related Congressional committees, I try to look over the horizon to glimpse the future of America’s lanes, planes ports and trains.  We all agree that America needs to become less dependent on foreign oil while working to achieve a more efficient, safer transportation system that’s less congested, more diverse and able to sustain healthy economic growth.  This week I introduced a forward-looking bill to help do all this, and more.

My legislation will provide tax incentives for companies which invest in rail infrastructure, like new tracks, spurs, tunnels and signals.   This will help our freight rail system avoid a looming crisis in America’s rail system – a pending overload.

According to many transportation analysts, including the U.S. Department of Transportation, capacity is the biggest problem facing our freight railroad industry.  By 2020, freight shipments are expected to be 70 percent higher than they were just seven years ago.  We’re in the midst of a dramatic freight rail upswing that we must address.

My bipartisan bill, which already has ten cosponsors, gives tax credits to businesses that build a rail spur from a distribution center to a main rail line.  Even a trucking company that builds a new truck-rail intermodal facility would be eligible.  It will give almost any business, large or small, that depends on shipping and sees an opportunity with freight rail, an incentive to use the railroad.  This will encourage investors to contribute to the overall modernization and expansion of our freight rail capacity.

Most Americans don’t realize it, but our railroads, unlike highways, were not primarily built and maintained by the government.  For the most part, our railroads – including those in Mississippi – were built 100 to 150 years ago by private investors.

Most of these private railroads, many of them still regional in scope, find it financially impossible to make the major improvements necessary to meet the burgeoning demand of a now nationwide rail network.

Freight rail is among the nation’s most cost-intensive industries, with capital expenditures now averaging about 17 percent of revenues, as compared to just 3.4 percent for manufacturing industries.  Rail tunnels, bridges and new tracks are very expensive propositions for any non-government entity, and these prohibitive costs discourage development of our freight rail system.

Right now, even relatively minor rail network choke points can lead to system-wide delays, increasing costs that are ultimately passed down to consumers.  This problem will only be compounded as freight shipments double or even triple.

It makes sense to give businesses which use rail, or want to use rail, up to 25 percent in tax credits to make rail investments.  It will help reduce costs for businesses, railroads and consumers.

My legislation ultimately will help lower energy costs.  A single gallon of diesel fuel moves one ton of freight about 400 miles, about the distance from Memphis to New Orleans.  And a single train carries about the same as 280 tractor-trailers.  Every American driver can easily appreciate the benefit of less road congestion, less emissions and more energy independence.

As we look over the horizon into America’s future transportation needs, the course of action is clear.  If we are to become more energy independent, if we are to meet the growing demands of our 21st Century economy and remain globally competitive, investing in our freight rail network is a must.

America was a pioneer in the development of railroads.  Our rails helped our nation grow into the world’s strongest and most powerful economy.  They can help us remain on top, too.

Senator Lott welcomes any questions or comments about this column. 

Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email

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