Four factors have historically governed improvements in railroad track
maintenance-of-way (MOW) costs: economies of traffic density, technol
ogical improvements, network rationalization, and equipment productivi
ty. This study demonstrates that the U.S. Class 1 railroad freight ind
ustry is saving $7 billion annually in MOW expenditures due to advance
ments in track productivity from the mid-1960s to the mid-1990s. MOW e
xpenses over this time increased 6% (in constant dollars), but costs p
er revenue ton-mile dropped 39% and costs per gross ton-mile declined
28%. All of this occurred during a period where the demands on the tra
ck structure increased dramatically: revenue traffic volume increased
73% and the weight of the average freight carload increased 31%. By us
ing mathematical extrapolation techniques to project costs from histor
ical data, estimates of the savings originating from the four factors
were calculated. The annual productivity savings due to density econom
ies, advancements in track technology, rationalization, and equipment
productivity are approximately $2.6 billion, $1.8 billion, $1.5 billio
n, and $1.3 billion per year, respectively.