Recent changes to economic and trade policies are fueling significant challenges within the freight rail industry. As decision-makers face uncertainty, particularly around rail traffic and equipment demand, many are left to wonder whether they should proceed with caution or move forward as planned.

At Railway Interchange, taking place May 20-22 in Indianapolis, Joseph Towers, senior analyst for rail and intermodal at FTR Transportation Intelligence, will help attendees try to make sense of the current landscape. Ahead of that session, we spoke with him to understand how today’s economic outlook is impacting the freight rail industry and what leaders can keep in mind as they navigate this territory.  

How are you seeing tariffs impact freight rail? What are some considerations leaders need to keep in mind?

Over the past few months and weeks, we’ve seen a pull forward of rail freight for certain commodities in anticipation of tariffs, with intermodal and autos being the most notable. Those strong volumes, however, are expected to come at the expense of traffic later in the year, due in large part to the broad tariffs on non-United States-Mexico-Canada Agreement (USMCA) auto imports, and the 145% tariffs recently levied against Chinese imports.

Our outlook for the other commodities is not much better. With broad tariffs on steel and aluminum imports, much of which comes from Canada and Mexico, along with the tariffs on non-USMCA covered goods, and the possibility of reciprocal tariffs on some of our closest trade partners, we’re expected rail traffic this year to be flat at best.

On the equipment side, the uncertainty surrounding tariffs is arguably the most significant effect, even more so than the inflationary pressures. With tariff policy constantly changing, and the lead times required between the order and delivery of a car, few want to buy a piece of rail equipment that could cost substantially more than anticipated by the time it arrives.

What changes in railcar demand are you anticipating this year, and how is that different from your expectations coming into 2025?

As we entered 2025, we were already anticipating softer railcar demand due to flat freight demand and diminishing industry backlogs. Since then, our expectations have become even less optimistic. Based on recent build and economic data, along with conversations with stakeholders across the industry, we now expect demand for new railcars to be even softer, with this weakness likely to affect a broad range of car types.

Much of this softness appears to stem from the uncertainty surrounding tariff policies and the possibility of railcar owners and lessees facing higher-than-anticipated costs for their equipment. Concerns about the strength of the industrial economy also seem to be contributing to this uncertainty.

The effects of this hesitancy could manifest in various ways. We may see increased shop demand as operators look to extend the useful life of existing railcars, as well as higher lease rates, as demand for lessor-owned cars rises to fill the gap that would typically be filled by new cars. Lastly, if freight and economic conditions remain flat, we may see an uptick in scrappage levels as car owners look to offload idled rail equipment.

What is your advice for leaders trying to navigate this uncertainty?

Whatever you think is going to happen, is not going to happen. This is usually the case, but it’s especially true now. My advice to leaders is to be as nimble as possible and create a strategy framework based on multiple scenarios, rather than a single base case. It’s also important that these scenarios are not static but are constantly updated as new information becomes available.

I would also suggest trying to avoid unnecessarily postponing decisions until a time when there is less uncertainty in the market. Economic conditions will remain volatile for the foreseeable future, and in many cases the ability to course correct will serve you better than waiting for calmer seas.

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RSI President Patty Long released the following statement in support of the legislation: 

“The Freight RAILCAR Act of 2025 will encourage investment in a more sustainable freight railcar fleet and bolster an industry vital to the U.S. economy. The RSI appreciates Representatives LaHood and Schneider for their leadership and urges Congress to pass this important legislation.” 

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The finalized rule implements key provisions of the Infrastructure Investment and Jobs Act, safeguarding the industry from the influx of state-subsidized rail components from countries of concern and bolstering the integrity of rail freight equipment manufacturing in North America. 

“RSI applauds the FRA for finalizing this vital regulation, which not only enhances safety and sustainability across the rail industry but also strengthens the domestic railcar manufacturing sector,” RSI President Patty Long said. “This rule underscores the commitment of Congress and the FRA to protect the U.S. rail supply chain, foster innovation, and prioritize national security.” 

The FRA’s approach reflects a balanced commitment to advancing safety and economic priorities while addressing the practical needs of railcar manufacturers. RSI remains a steadfast partner to the FRA in advancing these goals. 

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As demand for high-speed rail (HSR) continues to grow, the U.S. rail industry stands at the precipice of a transformative era. While many are familiar with HSR’s potential to revolutionize travel, fewer may appreciate the far-reaching benefits it can bring to the freight rail industry and broader rail ecosystem. According to Andy Byford, Amtrak’s senior vice president of high-speed rail, this mode of transit presents a unique opportunity for the U.S. to reinvest in domestic manufacturing while creating economic ripples across sectors.

“HSR promotes American competitiveness in the global economy for key manufacturing sectors, like steel for track, electrical components for signaling systems, and car equipment,” Byford says. “With our large, skilled, and widely dispersed workforce, the U.S. is well-positioned to build from within and benefit from the multiplier effects of investment in the supply chain.” This reinvigoration of the manufacturing sector could generate wealth, even in regions not directly served by HSR, expanding job opportunities and fostering economic growth nationwide.

A critical aspect of HSR’s impact is its contribution to workforce development. Byford pointed out that HSR investments will “strengthen the pipeline of skilled craftspeople and knowledge sector workers — for example, by supporting new investment in centers of excellence at higher-education institutions across the country.”

And there’s data to back this up. According to the American Public Transportation Association (APTA), 24,000 jobs are supported across economic sectors by every $1 billion invested in HSR. “Substantial initial investment in passenger rail and HSR provides returns on investment for a generation,” Byford says.

Testing the Waters in Dallas-Houston

One key project driving Amtrak’s HSR development is the Dallas-Houston corridor, a prime example of a route with optimal conditions for success. Byford explains that HSR works best when it connects cities with high travel demand and limited travel alternatives.

“With over 12 million total trips between Dallas and Houston in 2022, there is significant travel demand between these destinations,” Byford says. Amtrak’s proposed 240-mile HSR route, which had previously been developed by a private entity for over a decade, hits the sweet spot in terms of distance, and both cities are major metropolitan areas with growing economies.

The choice of this corridor reflects global best practices, where HSR is most effective in connecting regions with significant population density and suboptimal alternatives like car and air travel. If successful, this project could pave the way for more HSR initiatives across the country.

Collaboration Between Passenger and Freight Rail

HSR doesn’t just benefit the passenger side of the rail industry. “Any investment in rail, passenger or freight, expands our industry and creates mutual benefits,” Byford says. HSR can stimulate the entire rail manufacturing supply chain, supporting conventional rail and freight services as well.

While true HSR requires dedicated infrastructure to avoid conflicts between freight and passenger service, it’s possible for higher-speed passenger rail to coexist within the current ecosystem. “For some corridors, higher-speed passenger rail could be the right travel product. Where existing rights-of-way can be upgraded for faster, more frequent passenger service, the entire rail industry benefits,” Byford says.

There are also lessons freight can learn from HSR, particularly when it comes to safety. “Japan’s Shinkansen network has transported over 10 billion passengers since 1964 without a single train-caused fatality,” Byford says. “Sharing insights into best practices for passenger safety can help brainstorm solutions for freight.”

Why HSR Is a Critical Piece of the Transit Puzzle

HSR will play an important role in the future of American transportation, offering economic, social, and environmental benefits. “HSR offers better connectivity with more travel choices and gets travelers to their destinations more reliably, and often more quickly,” Byford says. In terms of sustainability, HSR leads the way, being eight times more energy-efficient than flying and four times more efficient than driving.

This makes HSR a key player in addressing current and future transportation needs, while also minimizing environmental impacts. “With a smaller physical footprint, less noise pollution, and zero emissions, HSR can add significant capacity to our existing transportation network with a lower impact to surrounding land uses than a new highway or airport,” Byford says.

A New Era of Rail in America

The U.S. is embarking on a new era of rail investment, one that holds promise for modernizing trains, upgrading stations, and building new infrastructure. “We’re enhancing the customer experience, improving safety and reliability, driving economic development, reducing trip times, and advancing sustainability,” Byford says.

Momentum is growing, with historic levels of funding and new federal financing mechanisms making it easier for rail projects to secure necessary support. “It’s time to keep building on this momentum and deliver additional state-of-the-art transportation benefits for the American people,” Byford says.

With these developments on the horizon, the future of HSR in the U.S. looks bright—not only for passengers, but for the freight industry that will benefit from a strengthened, interconnected rail ecosystem too.

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