Economic insights from NNDA: Freight railroads integral to logistics and infrastructure
April 18, 2018
CARSON CITY, Nev. — We hear about the logistics industry on a regular basis. Yet, few of us realize the major role it plays in our daily lives. It takes an interconnected network of trucks, trains, barges, and planes to deliver 54 tons of goods, on average every year, for each person in the U.S.
Logistics is part of supply chain management. This industry includes warehousing and distribution, air cargo, assembly manufacturing, food processing operations, and freight transportation (ground and rail).
It ensures that goods, services and related information are effectively and efficiently moved from the point of origin to the point of consumption to meet the needs of businesses and their customers.
Nevada's rail network, spanning almost 1,200 miles, and the state's more than 150 freight carriers offer cost-effective logistics for businesses. The close proximity to West Coast markets reduces shipping and storage costs.
In general, most Nevada cities, counties and tribal communities are less than one day's drive over arterial Interstate highways to nearly 60 million customers and clients, as well as to the major U.S. deep water seaports serving the Pacific Rim. Major rail connections throughout Nevada play an essential role in carrying the world's freight from the Pacific Coast to America's Heartland and beyond.
Trains are the most efficient way of transporting freight over land, moving a ton of cargo about 473 miles on a single gallon of fuel. In 2014, it would have taken approximately 2.6 million additional trucks to handle the 47.1 million tons of freight that originated in, terminated in, or moved through Nevada by rail. Our highways simply could not handle that load.
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In addition to being fuel efficient, shipping by rail is environmentally friendly. The results of various studies consistently support that moving freight by rail, instead of over highways, significantly reduces the harmful emissions regulated by the U.S. Environmental Protection Agency.
Private rail companies pay their own way with little help from U.S. taxpayers. Since 1980, the industry has spent over $630 billion in private capital on the national network, improving safety and efficiency.
Private reinvestment into the rail network is about six times the rate the average manufacturer puts back into their infrastructure. In the last five years alone, railroads have spent about $25 billion on average annually for the maintenance and enhancement of the network.
Short line rail providers are showing increasing interest to establish transloading operations in Nevada. These small or mid-sized railroad companies operate over a much shorter distance than larger, national railroad networks. Typically, they link together two industries requiring rail freight, such as a copper mine and electronic components factory.
The short lines can transport goods to a transloading center, where a shipment is transferred from one mode of transportation to another. This commonly occurs when one mode cannot be used for the entire trip, such as when goods must be shipped internationally from one inland point to another.
Another example is when it is the most cost effective to ship by rail to Nevada and then by truck to a final Western U.S. destination within the daily 11-hour driving limit set by U.S. Department of Transportation.
The logistics industry depends on our nation's infrastructure, including railroads, to meet the needs of companies and their customers. It has become an economic engine for Nevada, connecting miners, ranchers and manufacturers to U.S. and global markets. Efficient, reliable and safe rail service is helping to fuel Nevada's explosive economic growth.
Northern Nevada Development Authority (NNDA) is the state-designated regional development authority for the Sierra Region of Nevada. The organization can provide economic development assistance to Nevada tribal communities. For more information, visit http://www.nnda.org or contact the NNDA tribal liaison, Valerie Meléndez, RSIC tribal member, at firstname.lastname@example.org and 775-624-3962.