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For more than a century, the freight rail system has been at the center of the state's and the Bay Area's economy. Railroads benefit and strengthen a wide network of industries and jobs.
Freight rail and goods movement is the backbone of California's economy. And as we continue to redefine the future of transportation, freight rail will continue to play a critical role in our future economic security.
A new study conducted by Towson University underscores what we already know -- the economy moves when freight moves.
The numbers speak for themselves. Railroads generated nearly $280 billion in economic activity in 2014 and supported more than 1.5 million jobs across the country.
In California alone, the industry employs more than 8,000 residents with average wages and benefits of more than $100,000. Our state also ranks in the top five nationally with more than 26,000 railroad retirement beneficiaries. It's clear this industry is an economic powerhouse.
What's more, these benefits are exactly that -- benefits with no strings attached. At a time when public infrastructure investment is falling short, freight railroads are privately investing billions each year to maintain, upgrade and build their own infrastructure network.
The past several years have seen an annual average of $25 billion in investments, at no cost to taxpayers.
This is even more important at a time when the Legislature is gridlocked trying to debate ways to improve our crumbling infrastructure. Goods movement on our roads and highways has been severely impacted by decades of ignored or deferred maintenance.
Now, when we are on the precipice of a crisis, legislators are starting to act. But the question of funding a multi-billion-dollar endeavor has held up any progress.
Meanwhile, freight rail, through its private investment system, continues to keep our economy moving.
Freight rail's economic footprint is clear in the Bay Area, where Class 1 railroads all maintain extensive operations. Together, the Bay Area's railroads move freight at the region's three biggest ports, including the Port of Oakland, which is the fifth-busiest container port in the U.S.
Railroads are essential for moving cargo from these ports to destinations all over the country, extending the industry's economic contributions throughout the nation. Because of the Bay Area and other ports in the state, California ranks first nationwide in intermodal shipping and has a direct impact on other states' economies.
Without railroads, not only would California's economy be vastly different, the entire nation's economy would be as well.
And being able to move product by rail instead of truck gives small businesses throughout the state an advantage that few others in the nation have: the ability to bring in grain and packing materials, and ship out goods by rail. That is a huge boost for small businesses who may not normally be able to compete with large corporations.
Every benefit and investment made by the railroad industry is possible because of the current balanced regulatory environment, which has allowed this industry to flourish for the past 30 years.
The industry's partial deregulation not only allows it to reinvest increased profits into the network, it has allowed for investments of more than $600 billion in network infrastructure.
This market-based approach over the last three decades has allowed the freight rail industry to greatly enhance efficiencies and attract the revenue necessary to bring U.S. freight railroads to where they are now widely regarded as the best in the world.
Kirk M. Clark is vice president of the California Business Roundtable.
This article first appeared on www.eastbaytimes.com
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