Railroads NAICS 4821

Mar 3, 2025 - Railroads Brace for North American Tariff Impact

• North American railroads are bracing for the negative impact of the Trump administration’s imminent tariffs on the $203 billion worth of goods that cross the US/Mexico/Canadian borders every year. The trade dispute threatens railroads’ immediate bottom line and US consumers by hampering trade of key products including auto parts, petroleum, lumber, agricultural products, and chemicals, among others. Long term ramifications of a prolonged trade dispute will also affect infrastructure repair and expansion if the larger economy suffers, creating an economically challenging cycle. The Association of American Railroads reports railroads invested about $26.8 billion back into infrastructure in 2024. Tariffs could also adversely impact employment in the industry in states with the highest amount of freight workers - Texas, Illinois, Nebraska, California, and Georgia.
• There is ongoing degradation of trades-type jobs that keep railroads running, according to Peter Swan, a former railroader and retired Penn State professor. “There has been a shift in management from people to systems,” said Swan. “Automation in track maintenance, equipment, and operations means skill degradation for the ‘blue collars’. Manual track inspection is being replaced by sensors, and car inspection may be done entirely by machine. Locomotive engineers may be replaced by monitors, from two-person to one-person to no-person, crews. The long trains now being run with distributed power are more difficult to handle, and the skillset of an engineer may not be as important in the future as it was in the past.”

• A new federal rule requires railroads to provide details of hazardous cargo immediately after a derailment. The rule aims to ensure that first responders can find out what hazardous chemicals are on a train almost immediately after a derailment so they can respond appropriately. The local fire chief in charge of the response to the 2023 Norfolk Southern derailment in East Palestine, OH, said that it took him 45 minutes to learn exactly what was in the 11 burning tank cars on the train, but some firefighters from neighboring departments that came to help said they didn’t know what they were dealing with until two hours after the crash. First responders need to know exactly which hazardous materials are on a train so they can look it up in the government’s official guidebook and make sure they have the right protective gear and firefighting tools, said Tristan Brown, deputy administrator of the Pipelines and Hazardous Materials Safety Administration agency that proposed the rule.
• Railroad industry sales are forecast to grow at a 2.31% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Railroads slightly increased their prices during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Railroad industry employment decreased slightly during the first nine months of 2024, according to the BLS.