In the past, the United States held a leading position in passenger rail; however, it has fallen behind other industrialized nations in terms of rail funding and ridership. Fortunately, there has been an increase in investment, indicating a positive shift.
According to McKinsey & Co., there is projected growth of 4.7% per year between 2021 and 2026 in passenger rolling stock investment across North America, which includes various types of rail transportation such as high-speed rail, light rail, metro systems, passenger coaches, and locomotives.
A significant boost for the rail industry comes from the recently passed Infrastructure Investment and Jobs Act (IIJA), which assigns $66 billion to enhance the nation’s rail system. This substantial allocation of federal funding is expected to spur significant growth in the industry.
Marc Buncher, President and CEO at Siemens Mobility North America, believes that the previous lack of funding hindered the progress of passenger rail in the United States. He emphasizes the importance of federal funding, comparing it to the extensive support received by other countries. With the availability of federal funding, Buncher predicts a tremendous amount of growth in the industry.
In addition to funding, federal investment is driving the establishment of a domestic supply chain. Alstom, a train manufacturer, is working on fulfilling an order for Amtrak to upgrade its fleet of Acela trains. This investment has attracted numerous suppliers from Europe, who have set up factories and increased capability in the United States.
Private companies are also investing in passenger rail to enhance the network. Brightline has already developed a passenger rail service in Florida and is now working on a high-speed rail line between Las Vegas and Southern California through its sister company, Brightline West.
CNBC has visited rail car manufacturers Siemens and Alstom to witness their efforts in ramping up passenger train production and to gain insights into their vision for the future of passenger rail in the United States. Watch the video to discover more.
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