The Railway Supply Institute (RSI) is the largest and only trade association that represents the full supply chain for the railroad system
What do we need to know about the Railway Supply Institute (RSI) and the importance of rail to the U.S.?
RSI represents 170 companies across locomotive, freight, and passenger railcar manufacturing. These companies not only manufacture but also lease railcars and locomotives. Among the members are suppliers of mechanical systems, components, track measurement technologies, communications, signaling, and other critical technologies. The rail supply industry directly employs 240,000 people and creates 682,000 jobs when including indirect and induced employment across all 50 states. Collectively, our members build nearly every railcar and locomotive in use and own 70% of the rolling stock in North America. Rail touches every aspect of life, transporting essential products like food, gasoline, and even materials for clean drinking water, playing a vital role in both domestic needs and exports.
Forty percent of U.S. freight moves by rail, and we believe that number should increase. Rail transport is recognized by the Environmental Protection Agency (EPA) as the greenest, and by the Federal Railroad Administration (FRA) as the safest, and most efficient way to move goods. Freight and passenger rail operate under different financial structures—freight is mostly privately funded, while passenger rail relies on public funding.
Although the U.S. trails Europe in passenger rail services, the freight sector is considered world-class. This dual dynamic highlights the potential for growth and innovation across the entire rail system.
How is the rail industry evolving in response to challenges like the rise of e-commerce and shifting consumer demands?
The rise of e-commerce has reshaped customer expectations, with businesses and consumers demanding faster deliveries and greater transparency in tracking. This shift, often referred to as the "Amazonization" of logistics, has presented challenges for rail. Freight is divided into two categories: commodities (like coal and grain) and intermodal freight, which moves containers between cargo ships, trucks and trains. While some short-haul loads will always favor trucks, we believe that for sustainability reasons, anything that can move by rail should do so. However, trucks have traditionally had an advantage in flexibility, especially for last-mile deliveries.
To compete, the rail industry must improve transparency and reliability. Technology is the key to this transformation. Our members provide innovations like GPS tracking, which enables shippers to monitor goods in real-time. The RailPulse initiative is an example of industry collaboration that helps integrate technology across competing railroads, ensuring seamless operations.
What cultural challenges and structural factors are holding back the rail industry, and how is it responding to the need for change?
The rail sector has historically been slow to adapt due to entrenched practices and a culture resistant to change. Leaders like Joe Hinrichs, CEO of CSX, are working to shift this mindset by emphasizing the importance of customer service and operational excellence. There is increasing pressure on railroads to move beyond complacency and embrace innovation. However, Wall Street’s focus on operating ratios often forces companies to prioritize short-term cost-cutting over long-term growth and service improvements. This dynamic creates challenges on both the freight and passenger sides of the industry.
Another hurdle lies in the political landscape, where too often politics related to privately-funded freight rail investments and publicly-funded passenger rail drive public policy decision-making. Changes in administration can significantly affect infrastructure funding and long-term planning. The emergence of autonomous trucks presents a further challenge, as they could compete with rail for freight volume. It is well documented that rail offers superior safety and sustainability advantages, but maintaining this edge will require a shift toward a more customer-centric and innovative approach.
How is RSI addressing sustainability and the need for long-term investment in the rail industry?
Sustainability is a priority for us, which is driving investment in bridge technologies such as hybrid electric systems, hydrogen fuel cells, and regenerative braking. These technologies aim to make rail even greener while extending the useful life of existing infrastructure. However, regulatory challenges sometimes hinder progress.
Policymakers often push for rapid changes that do not align with the industry’s long-term investment cycles. We advocate for incremental improvements, allowing the necessary infrastructure to be implemented and rail companies to modernize without prematurely retiring valuable assets.
We also champion policies that incentivize investment, such as green tax credits and R&D initiatives to upgrade railcars and increase efficiency. Buy America provisions are another focus, ensuring that U.S. taxpayer dollars benefit domestic jobs and address security risks, especially since rail infrastructure passes through critical urban areas. Collaboration with federal agencies helps align safety standards and ensure that infrastructure investments support long-term growth.
What changes can we expect in the rail industry over the coming decade?
The rail industry is moving toward greater customer focus, driven by new leadership and technological innovation. However, the emphasis on short-term financial metrics remains a significant obstacle. We highlight the importance of long-term planning to avoid disruptions from political shifts and changing market conditions. On the passenger side, the sector faces unique challenges tied to government funding and political priorities. Freight rail, meanwhile, must contend with external pressures from autonomous trucks and infrastructure constraints.
We are optimistic about the future, believing that innovation and collaboration will unlock new opportunities for growth. Leaders within the industry are increasingly recognizing the importance of customer service and sustainability. Initiatives like RailPulse demonstrate how technology can transform operations and improve efficiency.
