Has the threat of tariff-related disruption put the brakes on economic development? Not a bit of it, if the Association of American Railroads (AAR) s reading the market correctly. In the latest issue of their newsletter to business interests around the world, the AAR paints a picture of an industry that is holding its course in the face of disruption.
American railroads have been eager to relate their investment plans, despite uneven tracks in the overall economy. According to the AAR, customers and operators have been collaborating in several sectors and locations to improve the position of rail-based freight operations. Although it is not clear how President Trump’s tariffs will affect trans-border traffic between the US and Mexico and Canada, there remains much optimism among the Class I railroads.
Reduce transportation costs
Steel has been in the news this week, not least in the UK, where a threat of closure hung over the last two blast furnaces in the country, at Scunthorpe. Quite a different story has come out of the USA, where Kentucky-based Southern Coil Solutions has just opened a new US$60m rail-served storage facility in the community of Bowling Green.
According to SCS, the new 17,000 sq m facility utilises AI-powered automated storage systems to streamline operations. They claim it will reduce loading times from 45 minutes to just 7 minutes. The facility was designed with rail freight handling in mind, and the collaboration of railroad operator CSX Transportation. “Convenient access to rail transport will significantly enhance efficiency and reduce transportation costs for SCS and its customers,” said CSX.
Connections across both borders
The manager of industrial development at CSX Transportation, Jody Lassiter, welcomed the Southern Coil
Solutions project.”We look forward to providing rail service to the company’s new warehousing operations, helping enhance the region’s logistical capabilities and reaffirming our commitment to fostering economic growth and development in the area.”
Meanwhile, Canadian Pacific Kansas City (CPKC), a railroad operator with tracks in Canada, USA and Mexico, is ready to support increased cross-border trade with the new Patrick J. Ottensmeyer International Railway Bridge. This is a second track over the Rio Grande linking Laredo, Texas, and Nuevo Laredo, Tamaulipas, across the U.S.-Mexico border. It was officially opened in late February, and for CPKC the bridge has become something of a symbol of its long-term commitment to US-Canada-Mexico market.
Private investment
While both those projects were already in train before the potentially derailing tariff wars, there is plenty of other positive news from the US railroad sector. Norfolk Southern, for example, completed US$1 billion in infrastructure upgrades in 2024 and supported 149 customer projects worth US$4.3 billion, creating more than 9,000 jobs, according to the AAR. Prominent among those projects is the US$200 million “3B Corridor”, which will expand rail access to the Port of Mobile, boosting Alabama’s maritime economy and key industries.
“Freight railroads invest an average of $23 billion of their own money each year,” said the AAR, emphasising that no taxpayer funding is involved. “These private investments ease the burden on public budgets while advancing national goals like stronger supply chains, reshoring manufacturing, lower costs, and local economic growth.”