When US Transportation Secretary Pete Buttigieg was sworn into office on 3 Feb 2021, he wasted no time signalling his key priority in office.
Just two days later he said: “I want the US to be leading the world when it comes to access to high-speed rail, and I think we have a real opportunity to do that, especially with the bipartisan appetite for real investments that we have before us this year.”
Buttigieg’s words are backed by commitment from the very top, with President Biden pledging to spark a “second great railroad revolution” and earmarking over $70 billion in federal aid to “invest in reliable passenger and freight rail” — funds that would, in part, update a rail network that lags behind Europe and Asia in terms of speed and safety, but also serve as a means to reduce greenhouse gas emissions.
In this short article, we describe the types of city pairs in the United States that could be successful high-speed rail (HSR) routes, based on our global knowledge and 25 years of experience in railway ridership analysis.
Private investment will be crucial
Given the current state of the US rail network, it seems likely that turning this ambition into reality will require significant private investment alongside that government funding — particularly if the Biden administration is to make significant progress towards a “national high-speed rail network from coast to coast.”
That is because developments in the United States’ road and air transport infrastructure — which are among the most sophisticated innovations in the world — have not extended to its rail networks, which now lag behind HSR services in Europe and Asia.
Indeed, at present, the US does not have any truly high-speed rail services. The Acela Express connecting Washington DC to Boston is the fastest train service in the US, but despite a maximum operating speed of 150 mph, average speeds over the journey are closer to 70 mph. Meanwhile, across the vast majority of existing US passenger rail networks, average speeds are just 40 mph.
To put that in context, true HSR routes connecting cities in Asia and Europe achieve maximum operating speeds in excess of 250 mph, while average speeds reach 125-150 mph.
If you build it, will they come?
Upgrading the United States’ creaking rail infrastructure to deliver a coast-to-coast, true high-speed rail network is, therefore, far from straightforward — a fact that is compounded by quite significant political opposition that sees investment in high-speed rail as wasteful and characterised by construction delays.
The key to overcoming those barriers and objections, and to maximising the impact of investment dollars, is in taking a commercial approach to HSR planning. It is not enough to simply focus on the big ‘coast to coast’ picture. As with any vision for fundamental change, delivering a viable reality is about tempering that vision with clear commercial thinking.
In turn, that means taking a more granular view, and identifying the right city pairs to connect — and here, a great deal can be learned from successful HSR connections in Europe and Asia.
Find the sweet spots
As a consultancy with the ability to pair strategic thinking with commercial forecasting — and having already consulted on a 240-mile HSR project in Texas, as well as projects in other US states and around the world — L.E.K. Consulting is well positioned to provide that commercial-centric view that will enable investors to identify ‘sweet spots’ for successful HSR services across the US.
In our experience, those sweet spots share a number of key characteristics, as they:
- Connect large cities and have stations located close to population and economic centres
- Are the optimal distance apart to be competitive with road and air networks — far enough for substantial time savings over road travel, but also short enough to compete with air travel
- Deliver fast average speeds, thanks to fewer intermediate stops and clearer routes
- Have the commercial freedom to maximise profit rather than passenger volume
That insight is borne out by route length and travel time analysis of successful HSR city pairs around the world, as demonstrated by the chart below (see Figure 1), where the most competitive pairs lie within the yellow ellipse.
Clearly, individual HSR investment opportunities would require significant due diligence, with ridership revenue studies feeding into investment-grade forecasts. However, this kind of sweet spot analysis has to be the starting point — offering a clear direction in terms of where to focus that robust forecasting.
Quite simply, the sweet spot identifies routes where high-speed rail can win against road and air travel alternatives, based on a number of factors.
As noted above, route length is a key consideration — routes which are too short do not offer compelling enough time savings compared with driving. That is especially true when considering the full door-to-door journey, the approach and onward travel-associated rail travel. Similarly, routes which are too long allow the faster cruising speed of aircraft to make up for the additional processing time associated with air travel.
A proven model, applied to the US
Combining route duration analysis with a focus on larger cities that generate a greater volume of travel by attracting both business and leisure travel has proven a successful model outside the US — and indeed, there is an abundance of examples worldwide of HSR routes that share these criteria for success.
They include routes connecting Tokyo and Osaka (in Japan), Paris and Lyon (in France), Madrid and Barcelona (in Spain), and more — all of which are explored in more detail in our Executive Insights, New Routes to Profitability in High-Speed Rail.
Now, using the same characteristics — journey distance and population — as base selection criteria, we have identified several potential city pairs in the US where high-speed rail might find fertile ground commercially (see Figure 2).
They include city pairs between 150 and 400 miles apart with a combined population of over 5 million and individual populations of over 1 million. Overall, these viable city pairs amount to an HSR network connecting more than 140 million people across 42 cities over a track network of more than 13,000 miles.
The detail: Explore our interactive dashboard
To enable a deeper dive into these high-potential routes, as the foundation for more extensive opportunity scoping, we have developed an interactive dashboard setting out the city pairs that could offer a starting point for the development of a US high-speed rail network — as well as HSR projects recommended by the US High Speed Rail Association.
You can explore the dashboard above, clicking on lines between city pairs to reveal the following:
- The combined population of the two cities, with higher populations implying a greater number of journeys between the two cities
- The average income for each city, with higher incomes implying a greater propensity to travel and a greater willingness to pay for travel
- Relative journey times for road, air and high-speed rail travel
In each case, journey times for high-speed rail have been calculated as a range, based on a 125-150 mph average speed, and on a route distance equivalent to the current driving distance. Current drive times and scheduled flight times have been assumed for driving and flying, respectively, with the following additional time included for each mode of transport:
- High-speed rail: 30 minutes for processing, boarding and egress
- Driving: 30 minutes’ rest for long-distance journeys
- Flying: 90 minutes of processing, security and other transit, and an average delay of 15 minutes
The stark truth is that the US has a great deal to catch up on if it is to realise Buttigieg’s ambition to become a world leader in high-speed rail. Political will is, of course, a necessary foundation, but investment momentum driven by a clear commercial focus will be crucial to converting potential into reality.
That commercial attitude starts with a focus on identifying city pairs with the right attributes in terms of population and geography, as the ability to compete and win against road and air transport will be crucial to viability.
The analysis briefly set out here identifies rail lines that meet those criteria, and which are ripe for further analysis and forecasting. Overall, these routes could represent fruitful opportunities to invest in US infrastructure with clear ties to environmental, social and governance agendas, while powering the US through the first steps towards a world-leading network.
For more information
L.E.K. has over 25 years of experience in railways, including advising investors, governments, railway operators and regulators. We have completed over 600 studies in the sector. Our investment-grade work combines outstanding technical expertise and therefore robustness with strategic and commercial heritage that adds realism and market knowledge to the work.
To find out more about L.E.K.’s capabilities around high-speed rail, including ridership revenue studies and investment-grade forecasting, please contact us.