Since 1997, the S&P 500 has grown from 1533.80 to 5234.50, a rate of 341%. Since 1997, the US Gross Domestic Product has grown from $8.578 trillion to $27.36 trillion, a rate of 319%. You know what hasn’t grown? Freight on the LOSSAN Corridor.
In 1997, the LOSSAN corridor was said to support 30,000 freight cars annually. In 2021, SANDAG suggested the line carried “more than 30,000 carloads,” which seems optimistic given pandemic supply chain problems. Back in 2008, BNSF is reported to have indicated the value of freight transported along the corridor was $1 billion. In 2021, SANDAG also said it was valued at “approximately $1 billion.” In January of 2024, state senators reported the corridor supports “more than $1 billion.” In the face of the record economic growth so far this century, it must have been hard to maintain such stability for two to three decades.
What is wrong with these freight numbers, which are so often quoted liberally by state and federal representatives, including Senators Atkins and Blakespear and Congressman Levin? First, are they referring to freight along the 66-mile San Diego Segment (San Diego to San Juan Capistrano) of the LOSSAN Corridor or are they referring, as seems to be indicated, to freight along the entire 351 miles? If these statistics belong to the latter, the value of rail freight travelling within the endangered San Diego Segment would have hovered at only $200 million on a prorata basis, not $1 billion. With railroad interests considering repair and relocation costs from hundreds of millions to multiple billions of dollars, could we perhaps get some accurate daily, monthly or annual statistics instead of these sweeping generalizations?
Second, accompanying these numbers are wild predictions of growth. In 1997, the California Department of Transportation and the Federal Railroad Administration forecast that the volume of freight would increase by 50% by 2020. Oops. In 2008, according to SANDAG, BNSF forecast freight on the corridor would double between 2008 and 2050. Off to a very slow start. In 2021, SANDAG indicated, “these freight lines move more than 30,000 carloads annually and are expected to exceed 60,000 by 2030.” How many predictions have to fail before rail agencies and government understand: it’s not happening.
Third, even if the $1 billion accurately describes the value of the freight carried on the San Diego Segment of the LOSSAN Corridor, it is dwarfed by other economics. The value of freight transported by trucks in the San Diego region falls between $270 and $320 billion, which should embarrass the train interests. The Gross Domestic Product of the San Diego metro area for 2022 has been calculated to be $257.34 billion dollars, while the Gross Domestic Product for Orange County for the same year is given as $314 billion.
Fourth, the $1 billion figure does not capture the economic value rail freight contributes to either economy. Because rail freight only passes through Orange County, the only economic value Orange County derives is from payments by BNSF, the freight operator, for the use of the rails. We requested that data from local agencies months ago; we have yet to receive it. Still, we can make estimates for San Diego, even if a 2018 San Diego Grand Jury report made extravagant claims of value without substantiation.
Because most of the rail freight traveling on the San Diego Segment originates or is destined internationally, the contribution of the rail freight itself to San Diego is minimal. As well, even if the goods were produced domestically, they would still find their way to an ultimate destination, so that value cannot be attributed to rail freight’s contribution to the local economy. Thus, the key contributions of rail freight are derived from 1) fees paid to the Port and at the border for the privilege of entering San Diego, 2) funds paid for transferring the freight between transports in San Diego and 3) BNSF’s expenses of fuel and operations moving rail cars.
We know a 2018 San Diego Grand Jury report indicated that the Pasha Group handles import and export of vehicles, at least some of which travel by train, for the San Diego Harbor. As the second largest customer of the PORT, the Pasha Group paid $13.1 million to the Port. We also know that the average revenue BNSF is likely making is .044 dollars per ton mile based on industry norms, which would be approximately $14.5 million, if running at full capacity, out of which it would need to pay its expenses. However, we also know that the line is not running at full capacity, which would be six freight trains a day, instead of the actual two to three. Freight cars are often sent empty to San Diego for repositioning. From these numbers, we can assume that the economic contribution of $1 billion in freight (on LOSSAN? on the San Diego Segment?) is easily under $50 million, and likely under $20 or even $10 million, a mere 1-2% of the exaggerated $1 billion so often quoted.
In short, freight traveling along the crumbling coast does not actually contribute much to the economies of San Diego or Orange County. Let’s be honest: if the total annual contribution of rail freight to the economies of San Diego and Orange Counties is less than $20 million annually, and in the next year, OCTA is planning to spend more than $200 million in taxpayer funds on riprap boulders in San Clemente to keep freight running, perhaps for just one year at the expense of South Orange County beaches, the numbers just don’t add up. It’s time for our representatives to stop generalizing and demand exact numbers, an objective cost/benefit analysis, and an explanation for why stagnant rail freight and doomed tracks warrant any investment at all.
Laurie Girand is an 18-year resident of San Juan Capistrano, a former candidate for Assembly District 74 and an Advisor to Capo Cares,a coastal advocacy group located in the Capistrano Beach community in the City of Dana Point. Since 2014, Capo Cares has followed issues of interest to community members, such as coastal erosion, beautification, public health and safety, local development and arts and culture. The group updates the community via daily postings at www.Facebook.com/capocares.
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