The Next Threat to Trains: A Tiny Virus and A Huge Land War

By Jim Mathews / President & CEO

Note to self: you can’t turn off an entire world’s economy for more than a year and then turn it back on again without a lot of problems. And looking at the prospects for realizing the promise of the rail investments in the Bipartisan Infrastructure Law, it’s worth noting how much things happening elsewhere on the planet could cripple our ability to capitalize on last year’s historic wins.

We’re two and a half years past when the world first learned about Covid-19 – a mutant pathogen which emerged in a wet-market in China and has so far killed more than 6 million people around the world, or 7,332 deaths a day since the crisis began. More than half a billion humans have been infected by the Covid-19 virus, and tens of millions of people were sick enough to be hospitalized.

Then, just when it looked as if vaccinations and behavior changes might finally have begun taming the spread of the virus and letting us all begin to rebuild our lives and livelihoods, the world’s largest exporter of oil and natural gas (Russia) decided to invade the world’s largest exporter of wheat, foodstuffs, and fertilizer (Ukraine).

The result of these two things has been massive inflation on a worldwide scale, layered on top of Covid-driven economic dislocation and bottlenecks.

Sri Lanka’s government this week is collapsing because prices have soared and the people are rallying to remove their leadership. U.S. inflation came in at 8.5 percent recently, and in the U.K. today we saw a report of 7 percent inflation. The U.S. tried to tame gas prices for ordinary Americans by releasing millions of barrels of oil from the Strategic Petroleum Reserve, and it knocked 25 cents off the price at the pump for a little while. But then, Russia decided to turn off the natural gas tap for Hungary and Poland, and Germany is now scrambling to find new ways to get off Russian gas. And that means a large industrialized country is now putting pressure on world supplies that wasn’t there two weeks ago. Cue new gas price hikes in the U.S.

The World Bank noted this week that worldwide energy prices in March were four times higher than their April 2020 lows, fertilizer prices are up 220 percent, and food prices are up 84 percent. It’s not just an American problem, which means there’s no purely American fix for it. This is the cliché story of the butterfly flapping its wings in Borneo causing a building collapse in Boston.

Inflation is a worldwide phenomenon that is the result of the unnatural compression of the entire world’s economy under the coronavirus restrictions and its equally high-flying bounce-back putting pressure on supply chains and industries. And now it’s compounded by a land war in Europe whose effects will be felt for decades.

"Get back to talking about trains," you’re saying right about now. Indeed. But there may be a lot getting in the way of our new trains, and we as advocates need to pay attention if we’re going to be effective in keeping our newly won rail spending on track.

Our friend Jeff Davis at the Eno Center for Transportation this week offered a sobering calculation for all of us: “If sustained highway cost inflation averages any higher than 7 percent per year, then inflation will have eaten the entire IIJA spending increase.”

In other words, all of these world events beyond the control of any U.S. politician – Democrat or Republican – could make it seem as if the historic funding levels in the Bipartisan Infrastructure Law never happened.

Whoever you vote for during the upcoming midterm elections in the U.S., recognize that no matter what promise might be made on the campaign trail, there is nothing any member of the U.S. Congress from any political party can do to stop Germany from needing more fuel, or to stop Asian ports from melting down and holding up shipping containers, or to fix cooking oil shortages in Africa and Europe making basic food items in the U.S. unaffordable.

Instead, every one of us as committed passenger rail advocates must make pro-rail demands on both our elected representatives and on those who are running in hopes of replacing them. We need to make sure that these representatives do whatever they can do to prevent inflation, economic dislocation, supply-chain pressures, and employment shortages from derailing our long-awaited Second Rail Revolution.

For example, just look at the fleet needs for the additional service contemplated in the AmtrakConnectsUS plan. We will probably need to double the number of available coaches and other rolling stock to operate at the levels of service they envision. So we need to push Congress to make it easier for our U.S. industrial base to gear up to supply these coaches, and to give companies the confidence that the new market won’t just evaporate with political whims.

Or look at the "white-collar" needs of the Gateway program. Design and structural engineers are at a premium right now, and they're hard to hire. Class I railroads and engineering consultant firms like HNTB or WSP, for example, all want those types of professionals, too. Amtrak needs them on board now to be program managers and project leaders to deliver these big infrastructure packages. We need to make sure Congress, either this one or any potential new Congress, does not put up obstacles to make this even harder than it already is.

Or what about simple things like steel for rail or equipment? Even though everyone agrees that to the extent practical we should be looking at using existing rights-of-way (ROWs) to speed project delivery, we know we're still going to need to see a lot of sidings get built, a lot of ROW getting upgraded to true Class I standards, more wayside signaling, and all the rest. The U.S. imports about 18% of its steel, and between the already-bad shipping-and-container meltdown and now the disruption from the Russian invasion of Ukraine, lead times for getting structural steel into place for projects are rising.

There's an overall industrial base issue in the U.S. when it comes to passenger rail. We've largely ignored passenger rail over many decades. Therefore, even though it's true that we have one of the best rail freight networks anywhere in the world and a robust U.S. supplier base to support it, the same can’t be said on the passenger side. Experiences with Nippon Sharyo and CAF have left policymakers – and check-writers – wary, and today Siemens and Alstom appear to be the only real games in town for rolling stock, although Stadler is making real U.S. inroads and could be an interesting supplier as our passenger-rail ambitions rise.

Earlier this month, I presented at an international Railway Interiors conference, as all of the big players around the world are lining up to supply the Second Rail Revolution in the U.S. That's partly because nobody is really doing much of that in the United States.

Presenters came from France, Germany, Italy, Spain, and the U.K., showing off sophisticated thermoplastic resin modules for interior fittings, innovative lighting and power management, and so forth. We don't have a robust supplier base here for that; which means by necessity either they'll have to set up fabrication and/or final assembly here in the U.S. -- which will take a very long time -- or they'll import what they need from their existing European factories, which again puts you at the mercy of the shipping-and-container bottlenecks.

We’ll also have to contend with Buy America restrictions and similar provisions. The Federal Railroad Administration has already said that the exception that the Federal Transit Administration uses to get non-U.S. rolling stock into service (“60 percent components but American-assembled”) can’t apply to rolling stock procurements involving those receiving FRA grants.

The next time you talk with your congressional representative or someone in their office, or someone hoping to get INTO their office, ask how they’ll support getting the right materials, chips, fittings, electronics, and so forth into the country so that we can get the new coaches and sleepers and locomotives we deserve. Ask if they have ideas around addressing the tighter demand not only for operational positions (we already know about conductors, engineers, mechanics, etc.) but for professional design and engineering positions. Make sure they remain committed to seeing the benefits of the historic Bipartisan Infrastructure Law realized. Make sure they don’t get cold feet.

We can’t fix European wars or worldwide inflation. But we can keep our representatives committed to giving us all the rail service we fought for and deserve.