Study: Freight rail worth a decade of Washington’s economic growth

By Kristi Pihl, October 7, 2014, Tri-City Herald

 

Washington residents can thank freight rail for insulating the state during the recent recession.

 

Freight rail contributes $28.5 billion to Washington’s economy each year, the same as a full decade of economic growth, according to a study released Monday.

 

Philip Romero, University of Oregon professor of business administration and the author of the study, said he is impressed with Washington’s trade intensity and competitiveness.

 

Washington’s annual exports are worth the fourth most in the nation, after Texas, New York and California, according to the study paid for by BNSF Railway Co. and the Washington Council on International Trade.

 

And the Tri-Cities is a bit more dependent on trade than the state, Romero said.

 

“Washington’s exports per capita is more than twice that of U.S. as a whole,” he said. The state exported about $11,000 per capita in 2012 compared to the national average of about $5,000, according to the study.

 

Freight is moved by rail day and night every day of the year.

 

“Freight rail kind of runs in the background and it’s an important part of the supply chain,” said Courtney Wallace, BNSF Railway spokeswoman.

 

More than 10 percent of Washington jobs are tied to freight rail, which is more than 340,000 jobs, Wallace said. That’s a larger impact than the railroad company work force.

 

BNSF Railway has about 3,500 Washington employees, with about 400 to 500 of those employees in the Tri-Cities, she said. Tri-City farmers and food processors are heavy exporters, sending crops such as apples, wheat, alfalfa hay, chickpeas and hops and processed foods such as frozen french fries to Canada, Mexico and Asian countries. Medical equipment, X-ray fluorescent instruments and customized manual wheelchairs are among other products exported by Tri-City companies.

 

Rail users have experienced some delays because of last year’s unprecedented growth in freight traffic between Chicago and the Northwest. Much of that was thanks to bountiful U.S. harvests, Wallace said. A bad winter last year also contributed to congestion.

 

In response, BNSF Railway is investing $235 million in Washington this year to expand capacity and maintain its existing rail lines, Wallace said. That’s $110 million more than the company spent last year.

 

Among the projects is adding a second mainline track at different locations on the route between Cheney and Mesa, she said. That includes 17 miles of new track along existing tracks between Pasco and Spokane.

 

Rail congestion is nothing compared with what truckers face on highways, Romero said. The state Department of Transportation estimates traffic congestion on highways costs shippers more than $3 billion a year.

 

Washington is privileged because it is at the end of the rail line for shipping goods from 20 states and Canadian provinces, Romero said. It’s the shortest fee route to the fastest growing portion of the world — Asia. There, a growing middle class represents a significant market for goods exported from Washington.

 

Even the goods passing through Washington end up benefiting the states because of the jobs created by transportation, Romero said.

 

“We are very, very lucky in Washington state to be a gateway to and from the rest of the world,” said Eric Schinfeld, Washington Council on International Trade president.

 

The council and its members hope to see increased investment and focus on freight mobility this year by Congress, Schinfeld said. The council also has focused on urging Washington legislators to approve a transportation package in recent years, which has been unsuccessful, he said. There is a need to create more separated crossings in communities that see freight traffic, among other freight infrastructure needs, Schinfeld said.

 

It’s critical that the state and the nation make investments now to keep Washington competitive as a freight hub in the future, he said. Washington is getting close to a tipping point because of a lack of investment as competitors are investing.

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