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12/16/2025
Compiled by Pat Foran, Editor-in-Chief
As railroad contractors turn the page on another uncertainty-filled year, they’re thinking about the opportunities and challenges they believe they’ll encounter in 2026, if responses to our recent survey of National Railroad Construction and Maintenance Association (NRC) board members are an indication.
In our survey, we asked (among other things): What does 2026 look like? Will it be better than 2025? Similar? Worse? Why? What is your forecast for the railroad contracting segment and/or your business? How are you preparing accordingly?
On the opportunity side, contractors note a potential for growth, based in part on the health of the North American rail industry as it continues to invest in infrastructure. They also feel good about their ability to communicate with government officials and convince them to keep the vitality of rail front and center in their decision-making. And they see chances to more effectively apply technology solutions (including artificial intelligence) in the year ahead to improve safety as well as efficiency.
The list of challenges is longer. It includes tariffs, a potential decline in grant funding levels and other federal government actions. Concerns about workforce availability, global supply chain volatility, economic uncertainty (in general) and merger landscape murkiness also could be nettlesome in the year ahead. As a result, and as of last month, “the signs indicate a tighter contracting environment across the board,” as NRC President Ashley Wieland noted in her survey response.
Other respondents to our contractor outlook survey include Curtis Bilow, executive vice president of Ames Construction; Erika Bruhnke, chief sales and growth officer for RailPros; Gary Kohnert, AVP of North American sales at Loram Maintenance of Way; Christo Nielsen, VP of leasing for RELAM Inc.; Shane Stalford, chief operating officer at Omaha Track; and Maggie Vuono, president of TraConcepts LLC.
Ashley WielandNRC
Curtis BilowAmes Construction
Erika BruhnkeRailPros
Gary KohnertLoram Maintenance of Way
Christo NielsenRELAM Inc.
Shane StalfordOmaha Track
Maggie VuonoTraConcepts LLC
We anticipate the outlook for railroad contracting will be slightly more limited in 2026. As railroads are tightening their belts due to uncertainty related to the economy, tariffs and other geopolitical impacts, we do not expect quite as many opportunities for contractors and suppliers as they have enjoyed over the past several years. We hope that assessment doesn’t hold up as the year progresses, but at this time, the signs indicate a tighter contracting environment across the board.
Additionally, we have seen consolidation of large railroads as well as contractor and supplier companies over the past several years, with likely more on deck in 2026. We do not yet fully know the impact that this consolidation, and future consolidation, will have on our industry.
While transit and passenger rail ridership is trending towards or exceeding pre-COVID levels in some areas, future funding level uncertainty makes this segment unclear going into 2026. With funding for Amtrak and other passenger-rail and transit projects on pause, pulled back or even reallocated, backlogs and new opportunities for our members are softer than in prior years as we enter the final year of advanced appropriations funding from the Infrastructure Investment and Jobs Act (IIJA).
Biggest concern about the year ahead: Our biggest concern is the uncertainty resulting from the actions of the federal government — the Surface Transportation Board weighing merger decisions, another potential government shutdown next year, tariffs and future rail grant program funding levels as we enter the final year of the IIJA. We are actively engaging with Congress on the next iteration of the surface transportation reauthorization bill to ensure that key discretionary grant programs receive an increase in funding, or at the least, remain at current levels.
The NRC maintains continual communication with members of Congress and senior leadership in the Trump administration. We keep them up to date on the impact on our members and also secure information so we can help position our members to leverage all opportunities. We are also encouraging our members to communicate directly with their elected officials through coordinated D.C. fly-ins and grassroots events at their facilities to discuss the impact on their businesses.
What rail-industry issue isn’t getting enough attention, collectively, from the industry? What are the consequences of that issue not getting addressed in the near term? NRC members are interested in pursuing opportunities to apply technology solutions to improve not just the efficiency of railway operations, but also the safety of their construction and maintenance activities.
Our members understand that they have to be technology-driven to fully service their railroad customers. Our members are often on the front lines of technological innovations when customers come to them with a problem that needs solving.
Technology also impacts railway contractors and suppliers on the safety front. As an example, the National Transportation Safety Board recently issued recommendations endorsing the safety benefits of all collision-avoidance systems on maintenance machines and people-detection systems on machines with moveable extenuations.
If we fail to explore and implement new technology solutions in our industry, we will be less competitive and unable to keep up with innovations that improve safety and reliability.
Contractors face a complex but ultimately promising landscape in 2026. The trends and challenges that shaped 2025 will continue to influence the industry into the new year, and several areas show clear potential for growth. For Ames Construction, 2026 looks to be a year of adaptation, innovation and cautious optimism as we respond to shifting market demands.
We expect a mix of new opportunities and familiar challenges as we move into the year. Tariffs, inflation and ongoing labor gaps will continue to put pressure on rail projects across both the public and private sectors. At the same time, volatility in global supply chains may continue to impact material availability and pricing. To stay ahead of these challenges, we will remain nimble and continue refining our procurement strategies to limit potential delays and cost overruns.
Technology integration will also assume a more prominent role in our strategy in 2026. Across the industry, advancements in equipment, artificial intelligence and other project management tools are helping contractors and railroads work more efficiently and with greater precision.
Looking at the broader industry, we anticipate moderate but steady growth in 2026. The railroads are continuing to invest in infrastructure improvements and long-term capital programs, though the economy may temper the pace of new work. For Ames, our focus will remain on innovation and efficiency, areas we believe will have the greatest impact on performance and competitiveness in the coming year.
While we are mindful of potential disruptions, the industry’s ability to adapt and move forward gives us confidence. If we continue to adapt with the railroads, stay focused on our processes and execution, and remain resilient in the face of ongoing challenges, 2026 could be a strong and productive year.
At RailPros, we believe the North American railroad industry is heading into 2026 with good momentum, fueled by infrastructure investment, freight growth and technological innovation.
One of the key strengths behind the industry is a strong network of contractors providing engineering services, inspection, project and program management, repair, training and technology services that keep the rail network safe, reliable and competitive. Service providers who can blend engineering, field services, and safety expertise with technology will be best positioned to capture expanding opportunities.
As we approach 2026, our industry faces a mix of opportunities and challenges shaped by economic conditions, changes in logistics due to nearshoring/reshoring effecting global trade flows, regulatory priorities, continued adoption of technology and potential mergers. We anticipate that 2026 will be a strong year for RailPros and for the industry in general. Some key areas where we see opportunities are:
While 2026 will not be without its challenges, the fundamentals for a successful year for railroad contracting in North America remain strong. Infrastructure funding pipelines, technological innovation and the essential nature of rail transport all point toward steady growth. The real differentiator will be adaptability: the ability to meet evolving client demands, integrate new tools, and maintain and grow a skilled workforce in a highly competitive labor market.
In 2026, we will invest in workforce development utilizing RailPros’ Rail Training Academy, which enables us to onboard new engineering and field services team members (supporting the industry’s need for highly trained, safety-minded rail professionals), while continuing to provide technology solutions to meet the needs of our customers.
*Response includes collective thoughts from the RailPros executive team, collated and voiced by Erika Bruhnke.
Despite signs of economic headwinds, Loram is forecasting similar 2026 results compared to 2025. The freight-rail industry continues to provide North America manufacturers and resource-based industries with the premier mode of transportation of goods to end users.
As suppliers and contractors, it’s pivotal that we continue to provide a value proposition centered around advancements in safety, technology and operating efficiencies that drive an increase in industry train velocity. As an industry, we all have one common goal of continuing to evolve in promoting this great industry.
As Loram approaches 2026, our continued mission is to provide a safety-first culture that utilizes technological advancements to maximize productivity, quality and service reliability. Loram is preparing to reduce any potential short-term headwinds by remaining focused on how our service and product portfolio drives customer shareholder value.
The railroad contracting sector is projected to see moderate growth in 2026, largely driven by ongoing infrastructure upgrades. Increased government funding and public-private partnerships are expected to support projects focused on modernizing existing rail lines and expanding capacity to meet rising transportation demands.
RELAM also anticipates strong opportunities for contractors to broaden their core service offerings for prospective rail customers. This includes supplementing tie, rail and surfacing programs; expanding access to hi-rail vehicle leasing fleets; and providing vegetation management equipment. These capabilities can be fully supported by RELAM, Wiskerchen Truck & Equipment in the United States and Falcon Equipment in Canada.
Biggest concern about the year ahead: Workforce availability and the supply of critical components are always key concerns when working with operators, mechanics and hard-to-source parts.
As workers retire, recruiting and training new employees with the required expertise is becoming increasingly difficult. This labor shortage can result in project delays, higher costs and even reduced safety standards if not properly addressed.
Reliable field service support is essential. Fast responses to maintenance issues, on-site diagnostics and strong technical assistance help minimize downtime and maintain peak performance. A skilled, responsive field service team builds confidence and allows railroads to concentrate on their core operations while the supplier efficiently manages technical challenges.
The availability of hard-to-source parts is another critical element. When equipment components are difficult to obtain, it can lead to costly delays and extended downtime. Rail suppliers who maintain well-stocked inventories and efficient supply chains will be essential for minimizing operational disruptions and safeguarding long-term productivity.
RELAM, for example, has an entire inventory to support its lease fleet of equipment and vehicles and is able to assist customers in need.
What rail-industry issue isn’t getting enough attention, collectively, from the industry? What are the consequences of that issue not getting addressed in the near term? Railroads rely on equipment like track inspection systems and maintenance-of-way machines to perform consistently at high standards. These machines must meet stringent safety regulations while providing reliable, repeatable performance to minimize delays and operational disruptions. Dependable maintenance equipment not only enhances crew safety in the field, but also keeps track, equipment and infrastructure in optimal condition, reducing risks and supporting smooth, continuous operations.
Flexibility and innovation in fleet and vehicle options are becoming increasingly critical. Railroads operate in varied environments with unique logistical challenges, and suppliers that offer tailored solutions — such as customizable leasing arrangements — enable railroads to stay agile and competitive in a rapidly evolving industry, which is key whether your company is a railroad or contractor.
Looking ahead to 2026, we anticipate a year that is very similar to 2025 in terms of overall activity and customer demand. While we don’t expect a major surge in work volume, we also don’t expect a contraction — instead, we’re preparing for a steady, consistent pace that allows us to continue supporting long-term maintenance and upgrade programs across the industry.
Biggest concern about the year ahead: Our biggest concern going into the new year is the continued availability of new rail. Because new rail has been harder to get, we’re preparing for the possibility that these supply challenges will continue. To stay ahead of it, we’re putting more focus on finding, inspecting, and supplying good-quality secondhand and relay rail. Customers are already showing more interest in these options, and we expect that trend to grow in 2026 as budgets tighten and delivery times for new rail stay unpredictable. To support that shift, we’re improving how we sort, evaluate and process used rail so we can keep projects moving even when new rail is in short supply.
What rail-industry issue isn’t getting enough attention, collectively, from the industry? What are the consequences of that issue not getting addressed in the near term? One issue that isn’t getting enough attention is how quickly artificial intelligence is changing. AI has huge potential to help with maintenance, efficiency, and safety, but the industry still isn’t talking enough about how to use it the right way.
Without clear plans for how to bring AI into everyday work — including accuracy, ethics and training — we risk either not using it at all or using it poorly. If we don’t address this soon, the rail industry could fall behind other sectors that are already moving much faster to put AI to work.
For railroad contractors like us, 2026 will be a year of stability, careful preparation and forward-looking adaptation — balancing immediate operational needs with the long-term technological changes reshaping the industry.
My primary concern for the upcoming year centers on the recent changes to federal guidelines regarding Disadvantaged Business Enterprise (DBE) certifications, particularly the confusion surrounding the Interim Final Rule issued by the U.S. Department of Transportation.
This rule, effective Oct. 3, 2025, eliminates the race- and gender-based presumptions of social and economic disadvantage that have historically underpinned DBE eligibility. All currently certified DBEs must now undergo recertification, providing individualized narratives and financial documentation to prove disadvantage. Until this reevaluation is complete, federal funding recipients are prohibited from setting DBE contract goals or counting DBE participation toward existing goals.
This shift has created widespread uncertainty — not only for DBE firms, many of which have long demonstrated value and compliance, but also for contractors and agencies unsure how to navigate the new requirements. There is particular confusion around how these changes apply to federally funded projects versus those funded by state or private sources, which may still maintain diversity goals.
While the intent to ensure DBE firms contribute meaningful value to projects is valid, the abrupt nature of these changes risks sidelining businesses that have invested years in building capacity and credibility. Additionally, the slowdown or suspension of federal funding — due to both the reevaluation process and broader government shutdowns — has placed many large infrastructure projects in limbo, further compounding the uncertainty.