California State Rail Plan 2007-08 to 2017-18

Chapter XVI – Major Freight IssuesCHAPTER XVIMAJOR FREIGHT ISSUESSIGNIFICANT TRENDSINTERNATIONAL TRADE GROWTHTrade has made California a global powerhouse. With a gross state product ofnearly $1.5 trillion, and more than one in 12 Californians employed in exportsupported jobs, California is an example of free trade at work. Nearly 20 percentof all foreign trade passes through California, totaling $436 billion in goods for theyear ended 2006. Foreign trade through the Ports of Los Angeles and Long Beachis expected to triple by the year 2030. California trade and exports support morethan one million jobs in the state, and a half-million are tied directly to foreigninvestment.Strategically located astride the Asian Pacific-American trade route and linked toLatin America through regional free trade agreements, over the past decadeCalifornia businesses and workers have led the nation in trade-related growth.Whether it be California high-tech products, films or agriculture, the statecompetes and wins when free trade provides new markets. Expanding global trademeans economic growth for California and America.Freight rail, in partnership with the trucking industry, provides intermodaltransportation connecting California seaports with inland producers andconsumers. It serves the State’s seaports and facilitates international trade.Freight rail also carries 16 percent of the nation’s cross-border NAFTA trade.Intermodal freight-rail service is crucial to the global competitiveness ofCalifornia industries. It provides the long-distance, line-haul component of truckrailintermodal moves. Rail is critical to the competitiveness of many industriesand the economies of many states, especially in California.Total U. S. domestic and international freight tonnage will increase by 67 percentby 2020, and California will be seriously impacted by this increase. At currentinvestment levels, the railroad industry would have difficulty absorbing its shareof this growth. In the worst case, freight rail would carry the same volume offreight in 2020 as it carries today. This would shift almost 900 million tons offreight and 31 billion truck vehicle-miles-of-travel to the highways, costingshippers$326 billion, costing highway users $492 billion, and adding $21 billion tohighway costs through 2020. In the best case, freight rail would carry a largerpercentage of freight tons in 2020 than it carries today (e.g., 17 percent in 2020compared to 16 percent). This would shift 600 million tons of freight and25 billion truck vehicle-miles-of travel off the highway system, saving shippers217