John Hockenberry: With all the Washington discussion of stimulus packages and infrastructure to restart the economy, what are the problem areas, and does Washington have it right? Certainly on the rail system last week, Barak Obama talked about a high speed rail system in the United States, we discussed whether there were enough resources put to actually making that happen, but maybe there are problems closer at hand, some more low hanging fruit regarding rail infrastructure. It turns out America’s freight system, the system that moves goods across the country by rail, is in big trouble and could use a bit of a stimulus investment. Rick Karr is in for us, he’s a correspondent for Blueprint America which airs on PBS. His report on the nation’s ailing freight-rail system airs tonight on the News Hour. Rick, thanks for being with us.

Rick Karr: It’s a pleasure, John.

John Hockenberry: So freight is a fright? Explain.

Rick Karr: Freight is a fright. The thing is that the system’s handling more freight than it ever has been before, but the issue that we have right now is that there are huge bottlenecks in the network. In particular around big ports: Seattle, Los Angeles, New York City, but really Chicago is kind of the worst part of the whole system and the reason is about a third of the nation’s freight still goes through, you know, remember Carl Sanberg? Bender of rails, freight handler to the nation? It’s still that.

John Hockenberry: You’re saying, historically, it’s a tradition but it’s stupid to stick with.

Rick Karr: Well, but the thing is a lot of that network was built back when Chicago was a smaller city, all the rails came in around the edge of the city. Then the city built up around it. So now we’re kind of stuck with that infrastructure that’s there in the city. It’s so bad in Chicago, this is how ridiculous things get. A train will come in from the east coast, it will pull into a yard in Chicago. The train will have to be disassembled. A lot of that cargo ends up on trucks driving across the city to another rail yard where it’s put on another train going out of the city towards the west.

John Hockenberry: That is ridiculous.

Rick Karr: I actually, I spoke to a trucker who does something different. He hauls freight in from about 300 miles away. This is stuff that probably should be on trains but it isn’t. His name is Mike Southworth, and he says it’s just not worth it for his clients to put stuff on trains for the first leg of it’s trip.

Mike Southworth [on tape]: By the time they load it in Detroit and train it to Chicago, switch it to the appropriate train headed for Mexico, we can get it here faster so the customer has it on time, so they can build the automobiles.

John Hockenberry: So the cost savings of rail is sort of blown away by this chaos.

Rick Karr: Exactly, because he knows that he’s more expensive than putting this stuff on the truck is. He also knows that he uses more fuel, he uses a lot more fuel, and he generates more traffic on the roads.

John Hockenberry: So, what can we do? What’s the sort of strategic policy implication of improving this system?

Rick Karr: Well, I mean, essentially what the folks in Chicago and elsewhere are trying to convince Washington is that this is an important national priority. And there are sort of three different groups coming together here. On one hand you’ve got businesses themselves. They say business has changed, we’re no longer in a period where we can wait for the train to roll in and bring this stuff to us. For instance, I went to the largest package sorting facility in the United States, owned by UPS. Ten percent of their packages move through there. Talked to a guy named Frank Barr who works in government relations there for UPS, and he said essentially the issue was that for them, time is money.

Frank Barr [on tape]: They typical lifespan of a package in this facility is less than 15 minutes. This facility can process above 100,000 packages per hour. We’ve actually demonstrated during our Christmas peak period processing more than 120,000 packages per hour.

John Hockenberry: That’s really the irony. We think that this is the golden age of freight with UPS and FedEx, but it’s not.

Rick Karr: They’ve learned how to deal with the rail network as it is, and Frank Barr was hesitant to say look, we’re angry at the rail roads. But he does say, he wants them to be able to sit down with their customers, with government and say let’s figure out how to handle this. Second group, interestingly, the second set of people who are involved in saying let’s improve the freight rail network are environmental groups. They point to the fact that trucks use six times as much fuel. That means they’re spewing out six times as much greenhouse gas. They’re clogging up roads, which has a knock on effect. That means you drive more slowly because there are more trucks on the road.

John Hockenberry: All Obama issues. Environment, congestion…

Rick Karr: Exactly. So you’ve got the NRDC and the EDF both involved with saying let’s fix the freight network.

John Hockenberry: I’m not going to let you say NRDC…

Rick Karr: National Resources Defense Council and Environmental Defense Fund [laughs]. Third group is people who are just focused on the nation’s competitiveness, and the problem here is that we’re kind of the only industrialized nation in the world that hasn’t been thinking about this. I heard this from a woman named MarySue Barrett who heads Chicago’s Metropolitan Planning Council.

MarySue Barrett [on tape]: Countries like the UK, like Germany, like Canada, they have developed a freight strategy for their countries just in the last decade, and sometimes in the last four or five years. Here in the United States, we’ve kind of been sleepwalking. We’ve been doing things the way we’ve always done it.

John Hockenberry: So if we were to fix these problems, what’s the price tag, stimulus-wise, Rick Karr?

Rick Karr: Oh, you know, at this point we’re well into the billions that we would have to spend to really fix this network. I mean you think about the fact that the average speed of a freight train through Chicago is nine miles an hour. Chicago alone has a $2.5 billion price tag on its plan to fix its network, that doesn’t include any of the other choke points in the country, and that’s a fairly limited fix. That’s just to get things moving faster than nine mph through Chicago.

John Hockenberry: Although, with all we’ve been talking about with stimulus, $2 billion seems like a bargain. We’re well into the trillions.

Rick Karr: The problem with this is that freight rail is something that nobody has ever thought has been government’s responsibility. It’s always been the private sector’s responsibility. But now that you have all of these elements coming together saying we need to work on this as a nation, they’re trying to get in on Washington’s radar and congress to pony up some money later this year.

John Hockenberry: Fabulous stuff. Rick Karr with his trusty laptop, correspondent from Blueprint America in our studio.