Trade and Railroads Key to Nevada Economic Growth
By Rob Hooper
Trade is very much on the minds of business leaders and executives across most industry sectors, especially for companies seeking to expand into global markets or broaden their international market share. President Trump has stated his position regarding our current trade agreements, which has sparked ongoing debate about their merits by groups across the political spectrum. With representatives of Canada, Mexico and the U.S. set to begin another round of negotiations on the North American Free Trade Agreement (NAFTA) at the end of this month, the debate will continue.
While this has created uncertainty, there are important facts to take into consideration. According to Business Roundtable™, international trade, including exports and imports, supports approximately 367,800 Nevada jobs. The Silver State exported $7.6 billion in goods and $9.4 billion in services in 2014 to customers in 186 countries and territories. With more than 95 percent of the world’s population and 80 percent of the world’s purchasing power outside of the U.S., future economic growth and jobs for Nevada and the nation increasingly depend on expanding trade and investment opportunities in the global marketplace.
Nevada’s two freight railroads operate over 1,193 miles of track in the state. Fortunately for both the Silver State and the nation, U.S. freight railroads continue to spend and invest to maintain and expand their network, connecting Nevada manufacturers and mines to markets across the country and the globe.
Freight railroads are privately owned and operated. They do not depend on funding based on government decisions or from taxpayers. On average, railroads reinvest 40 percent of every dollar they earn back into their infrastructure – more than any other industry and significantly more than the average manufacturer. Since 1980, railroads have invested more than $635 billion of private capital in their network.
This massive spending saves taxpayers money by making it possible to move freight that would otherwise be on government-funded roads and bridges. Already in need of major repairs, they could not accommodate anywhere near all of the shipping traffic moved by rail. Because railroads are four times as fuel efficient as highway transport, moving freight by rail also saves fuel and results in 75 percent fewer greenhouse gas emissions for each freight movement. One ton of cargo can be moved approximately about 473 miles on a single gallon of fuel.
These investments include maintenance of the physical infrastructure of the rail network making it safer and more efficient. The railroads also invest in new technologies and innovations that make an “old school” modes of transportation rival tech companies. Deployment of big data and sophisticated monitoring technologies improve routing, proactively identify issues and reduce supply chain impact, and make a safe industry even safer.
In terms of trade, America’s railroads – like the rest of the country – have deep international ties. A recent report by the Association of American Railroads found that 50,000 rail jobs and 42 percent of rail carloads and intermodal units directly depend on trade.
The strength of our rail network is a huge asset in an increasingly global economy. Freight rail connections are helping the Silver State attract new warehousing, distribution and manufacturing operations seeking a West Coast hub. For those gambling on the future of commerce in the Western U.S., freight rail helps make Nevada a safe bet for economic growth.
Rob Hooper is President & CEO of Northern Nevada Development Authority.