New AAR Study Underscores ‘Substantial’ Economic Impact of U.S. Rail Transportation Industry

As the nation’s heavy hauler, freight railroads provide “safe, efficient and sustainable transportation solutions that are vital to modern American life and economic activity,” the AAR noted. “By delivering bulk goods cost-effectively and connecting businesses to global markets, railroads help strengthen supply chains and foster economic growth.”

According to the report (download below), in 2023 alone, freight railroads invested $26.8 billion in capital improvements, “modernizing their operations, enhancing safety and expanding long-term growth opportunities for businesses nationwide.” These substantial investments, AAR says, “have significant ripple effect on the U.S. economy with every $1 invested in rail transportation drives $2.50 in economic activity.”

The North American rail network, AAR says, “plays a critical role in seamlessly connecting domestic producers to international markets ensuring reliable, efficient exports for agriculture, energy and manufactured products.” AAR analysis reveals that 38% of all rail traffic—11.3 million shipments—were directly tied to trade-related activity connecting domestic producers to international markets in 2023.

Analysis also found that every railroad job supports 3.9 additional jobs in industries like manufacturing, logistics, and technology. In 2023, rail transportation directly employed 153,000 highly skilled workers whose total compensation significantly exceeds the national average, according to the report. When factoring industries railroads support and household spending effects, rail transportation supported a total of 749,000 nationwide, generating $66.1 billion in household income for 2023. 

Beyond being an “economic workhorse,” AAR says, rail provides “safe, sustainable transportation solutions that keep the nation on track to tomorrow. Through strategic investments and world-class service, freight railroads will continue powering America’s economy, fostering job creation, and keeping businesses competitive for the future.”

“Railroads are a key pillar of American commerce, powering our supply chains and driving economic growth nationwide,” said AAR President and CEO Ian Jefferies. “With billions invested annually and a highly skilled workforce, railroads generate economic activity that extends from major industries to small businesses across the country. This study confirms that today’s rail investments build tomorrow’s jobs and prosperity.”