From the start of railroading in America through the first half of the 20th century, New York City and Long Island were major areas for rail freight transportation, but their location, across the Hudson River from northeastern New Jersey, and thus most of the United States, has always posed problems for rail traffic. Numerous factors, besides geography, influenced the dramatic reduction of the number of freight rail cars that enter or pass through the city to a trickle. Efforts to reverse this trend are ongoing, but have met with limited success.
In part because of its excellent harbor and its canal connections to the interior, New York City and its surrounding area early on became the largest regional economy in North America. As railroads developed in the 19th century, serving New York City market was vital, but problematic. The Hudson River, a mile-wide (1.6 km) estuary near the city, a section also called the North River, presents a formidable barrier to rail transportation. As a result, most railroads terminated their routes at docks on the New Jersey shore (see 1900 map). Ferries brought rail passengers to and from the city, while car float barges carried freight cars across the Hudson—on the order of one million carloads of freight per year.
One exception was a New York Central Railroad line on the east bank of the Hudson that extended into Manhattan for freight service. This West Side Line, brought freight cars to docks, warehouses and industries along Manhattan's west shore.
In the early 20th century, the Hudson barrier was surmounted by tunneling for passenger rail, and, starting with the Holland Tunnel in 1927, the George Washington Bridge in 1931, and the Lincoln Tunnel in 1937, for automobiles and trucks. Trucks could deliver freight anywhere in the city without requiring a railroad siding. The rail tunnels required electric propulsion, limiting their use for freight. A rail freight tunnel from Staten Island to Brooklyn was proposed, but never completed.