Why are railroads still important in the current era?

What do railroads haul? 

Railroads haul a wide range of bulk commodities, chemicals, finished motor vehicles and intermodal containers, roughly approximated in the chart below. It is important to note that while intermodal units represent approximately half of railroad unit volume, intermodal represents roughly one-quarter of railroad revenue (shown below 20% in the chart below because some intermodal freight is captured in other categories). The railroads’ revenue per unit is lower for intermodal than carload traffic because one intermodal unit carries less tonnage than a carload and is also more competitive with the highway. 

How are railroads regulated? 

The railroads were economically deregulated by the Staggers Act of 1980. The Staggers Act enabled the railroads to set rates determined by market conditions rather than by any collective rate-making structure. The railroads became free to ask for rates that they believed reflected market conditions provided that no alternative in the marketplace existed. The Staggers Act also allowed the railroads to abandon unused or less used rail lines which were important because of the capital-intensive nature of keeping railroad track maintained to adequate safety standards. The railroads remain economically deregulated (meaning they have the right to set rates) but are under the regulatory purview of the Surface Transportation Board (STB) of the U.S. Department of Transportation, the current iteration of what was formerly called the Interstate Commerce Commission. In lieu of oversight by the Department of Justice, the STB must approve all mergers and acquisitions and is responsible for overseeing rate cases that shippers bring against railroads where there is an accusation of abuse of market power.