America’s railroad industry has been around for over two centuries and while that shows the ability of railroad companies to adapt to the ever-changing landscape of freight transportation, it also brings challenges that railroad companies have to face to survive.
Aging Railroad Yards
In order to maintain a position in the marketplace, railroad companies need to make sure they have innovative equipment and recycled and renewed rail yards. Rail yards need to have good air supply to run the trains and these air lines need to be properly maintained and replaced if they are old or damaged. Finding a professional company that is experienced with yard air requirements is critical to successful yard maintenance.
The U.S. population continues to grow and with that the demand for supplies increases. Even with the projected rise in freight and transportation needs, there is no guarantee the railroad industry will see these jobs. There is a lot of competition for railroad companies and they have to fight to keep their place in the market. Railroad companies need to continually revamp their systems and invest in their equipment and infrastructure to ensure they are operating in the most efficient and cost-effective way possible. This will ensure they can pass the savings on to their clients and secure long haul transportation contracts.
Collapsing Demand for Coal
Coal continues to be the top product carried by railroads, but the demand for coal is dropping rapidly due to its high levels of carbon content. The recent changes in the coal industry have resulted in massive losses for railroad companies. In fact, estimates are that railroad companies will lose billions of dollars in the near future due to a sharp decrease in desire for coal.
More and More Regulations
Railroad companies are in danger of being regulated out of the marketplace. Thanks to potential new regulations imposed by the Surface Transportation Board, railroad companies may be severely limited on how much they can charge their customers. With limited income, railroad companies are less able to improve their services.
No one knows exactly what comes next for the U.S. railroad industry. The future remains challenging, but they have proven their ability to evolve and adapt and we expect nothing less in the future.