The Virginia Avenue Tunnel is a keystone project in the broader $850 million National Gateway initiative, a public-private partnership between CSX, six states and the nation's capital. National Gateway is a multiphase, 11-year undertaking to move more freight between East Coast ports and the Midwest, double-tracking existing routes and boosting clearance for tunnels and bridges. Seven of those years alone have been dedicated to permitting and complying with regulations.
Once complete in late 2018, CSX is betting all the National Gateway work will result in the conversion of more than 14 billion truck miles to rail, and help save some 2 billion gallons of fuel in the process.
"Intermodal has been traditionally a very strong growth area for the railroads and it continues to be over the very long run," said Christian Wetherbee, a transportation analyst at Citigroup. "When you think about the United States transportation infrastructure, the rails really are very well-positioned to continue to take market share off of the trucks and onto the rails."
In the shorter term, fuel prices have been weighing on that conversion since lower diesel costs make trucks more competitive with rail over longer distances. "With low fuel prices you end up having a little bit of a more challenging dynamic in terms of converting this intermodal freight—but it will be growing better than the overall carload base," said Wetherbee.
Over the long run, the rail industry expects to continue pulling market share from trucks, as trucking capacity tightens amid a driver shortage and tougher regulations for that industry.