During the post-World War II boom many railroads were driven out of business due to competition from airlines and Interstate highways. The rise of the automobile led to the end of passenger train service on most railroads.

The decline of the U.S. rail system, particularly passenger rail, was a result of the "Great Pivot" to automobiles and aviation in the mid-20th century. Following World War II, the U.S. government invested heavily in the Federal Aid Highway Act of 1956, creating the Interstate Highway System, which made car travel faster and more flexible. Simultaneously, the rise of jet aircraft made long-distance rail travel appear obsolete. For freight railroads, the 1950s and 60s were a period of crushing federal regulation and competition from the trucking industry, leading to the bankruptcy of several major lines, most notably the Penn Central. This culminated in the 1970 creation of Amtrak to take over failing passenger services and the 1980 Staggers Rail Act, which deregulated freight rail. While the U.S. now has the most efficient freight rail network in the world, the passenger system remains largely underfunded and limited to the Northeast Corridor and scattered long-distance routes compared to the high-speed networks of Europe and Asia.