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The Economic Power of Freight Rail: Driving Growth, Jobs, and Trade
Written by: Michael B. Gaynor, Assistant Vice President, Field Operations, GoRail
The trains that move America’s goods are among the most critical drivers of the U.S. economy—and a new study helps quantify and contextualize this impact. Released by the Association of American Railroads in March, the research looks at how rail contributes to jobs, trade, private investment, and public benefits.
“With billions invested annually and a highly skilled workforce, railroads generate economic activity that extends from major industries to small businesses across the country,” said Ian Jefferies, president and CEO of AAR.
Here are five things to know:
1. Freight rail is a multi-billion-dollar economic driver.
Freight rail isn’t just about moving goods—it’s about moving the economy forward. In 2023 alone, railroads generated a staggering $233.4 billion in total economic output. That’s like hosting almost 500 Super Bowls in a single year! And the benefits ripple far beyond the tracks. Rail helps power industries big and small, from family-owned farms to massive manufacturing plants, ensuring goods get where they need to go efficiently and affordably.
2. Every rail job supports 3.9 more jobs across the economy.
Rail doesn’t just move freight; it moves people’s livelihoods. Nearly three-quarters of a million jobs (749,000) are tied to freight rail, from engineers and conductors to steelworkers and grain farmers who rely on rail to keep their industries running. That’s about the same as the entire population of Seattle. And unlike many industries that rely on taxpayer-funded infrastructure, freight railroads maintain and invest in their own networks, further strengthening job security and industry growth.
3. Trains are a cornerstone of international trade.
Trade is the lifeblood of the U.S. economy, and rail plays a massive role in keeping goods moving across borders. In 2023, 38% of all U.S. trade—more than 543.5 million tons of goods—moved by rail. That’s the weight of about 3 million blue whales worth of products, ranging from cars and electronics to grain and energy resources. Without freight rail, highways and ports would be overwhelmed, and the cost of goods would be significantly higher for consumers.
4. Rail companies commit billions in private investment.
Unlike roads and bridges that depend on taxpayer dollars for upkeep, America’s freight railroads are largely self-sustaining. Railroads spend an average of $23 billion annually on their own infrastructure, upgrading tracks, modernizing equipment, and improving safety measures. This private investment provides measurable public benefits – like reducing truck traffic and damage to taxpayer-funded highways.
5. Railroads are a major tax contributor.
Trains move billions into the U.S. economy through tax revenue. In 2023, railroads paid nearly $16.7 billion in taxes at the local, state, and federal levels. These funds help support schools, emergency services, and public infrastructure—another way rail plays a vital role in keeping communities strong.
As demand for goods continues to rise, ensuring a strong and modern rail network is essential for maintaining economic growth, global competitiveness, and sustainability. A well-funded, efficient freight rail system means lower costs for businesses, more jobs for workers, and less congestion for everyday drivers.
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