itif.org
The Economic Costs of Public Subsidies
for Freight Transportation
MICHAEL F. GORMAN | SEPTEMBER 2025
Federal freight policy effectively incentivizes the most damaging and least efficient mode of
freight transport—trucking—by underpricing access to public infrastructure. A restructured,
mode-neutral cost system would encourage more efficient, safer, and environmentally
sustainable freight transportation, better serving taxpayers, drivers, and the economy.
KEY TAKEAWAYS
The federal government effectively provides a large subsidy for the trucking industry,
which has significant negative externalities by increasing congestion, emissions, and
incidences of highway accidents.
The United States has 150,000 miles of freight railroads, and rail companies invest $23
billion annually to maintain them. Federal support is limited, covering mainly signals and
gates at highway-rail crossings.
The U.S. Army Corps of Engineers maintains 12,000 miles of navigable waterways—and
in 2025, Congress appropriated $8.7 billion to the Corps, which it uses both to manage
navigation and mitigate flood risks.
The federal government spent $52 billion on roads last year, and about $20 billion of
that came not from taxes on diesel fuel or gasoline (which approximate user fees for
trucks and passenger cars) but from the general fund.
To allocate federal investments in transportation infrastructure more efficiently, Congress
should replace the diesel fuel tax with a vehicle miles traveled fee for trucks, so that they
internalize the full infrastructure and any external costs they impose.
Policymakers should reassess regulations that increase costs on the rail industry without
measurable safety benefits.
Policymakers also should prioritize investment in multimodal freight strategies, especially
those that expand intermodal rail and reduce truck congestion in urban corridors.
