Railroads and the New Normal Impact of Lean and Green on the Future of Railroads

Railroading faced a bleak future in the 1960s. At the heart of the decline were several core problems. Freight and passenger traffic was shifting to highways, with the rapidly developing Interstate highway system, and to airlines, with the growing use of commercial jet aircraft. There was an overabundance of railroads and of rail capacity for the diminishing rail traffic. Unproductive labor agreements limited productivity, and economic regulations restricted flexibility. A series of changes over the course of more than two decades produced a more efficient, environmentally friendly-or lean and green-railroading industry. The size and the number of railroads diminished, regulations were eliminated, and more flexible staffing and work rules were instituted with nonunion labor. Better technology also improved productivity. Railroads are now the most financially successful of all transportation modes although immense challenges still lie ahead.