As the fall grain harvest wraps up and we head toward the holiday season, the importance of efficient, reliable transportation in our lives is front and center. And though infrastructure investment has been discussed as a priority of the Trump administration and Congress, it remains a distant possibility.
At the very least, policymakers should do no harm – ensuring today’s reliable infrastructure, particularly private infrastructure not financed by taxpayers, is kept strong. To that end, a pending regulatory proposal at the U.S. Surface Transportation Board (STB) that would undermine freight rail operations and investment should be scrapped.
Freight railroads are the backbone of our economy. Companies and communities across the country depend on them to connect ports, farms, factories, mines and consumer goods to markets across the country and the globe. In one year alone, freight railroads generated $274 billion in economic activity across the U.S. according to a study by Towson University based on 2014 data.
Freight railroads are also the backbone of U.S. passenger rail. Other than the Northeast Corridor, Amtrak trains and state-supported route trains operate on tracks owned by freight railroads, as do most commuter railroads. Policies directed toward freight railroads consequently impact passenger service as well.
Railroads are able to move products and people so efficiently because of their decades-long commitment to investment. Since 1980, these private companies have spent and invested over $630 billion on maintaining and upgrading the 140,000 track miles that comprise the nationwide rail network. They spend more each year on this network than most states spend on highways. And they do it with their own private sector dollars, not taxpayer funds.
Railroads are financially capable of these massive expenditures because of smart public policy that allows the industry leeway to run its private business. A balanced system of economic regulations ushered in through the Staggers Act of 1980 fully protects shippers while allowing rail carriers to earn enough money to afford the capital investments the network requires.
“Forced access,” the pending regulation at the STB, could change all that. The proposal would force railroads to share their privately owned and maintained networks with their direct competitors at below-market rates.
Essentially upending the system of regulations put in place by partial economic deregulation enacted nearly 40 years ago, the rule would be a dramatic step backward to a time when government bureaucrats set rates and controlled routes for the railroads. Similar proposals in the past have been estimated to cost $8 billion in annual rail revenue—a steep reduction that would dramatically undercut the resources railroads have at their disposal to invest in infrastructure and operations.
The negative effects of these past onerous policies, of course, radiated far beyond the railroads themselves. Shippers, consumers and the economy suffered. A significant portion of the network was in bankruptcy and stationary trains were literally falling off tracks due to the crumbling infrastructure below them.
Policymakers cannot allow a return to this failed system. To this end, a letter jointly signed by over 450 local and state elected leaders, economic development officers, chambers of commerce, advocacy groups and rail supply companies was transmitted this week to the STB and to congressional leadership opposing forced access.
As signatories on that letter, we know how much our communities rely on freight rail. We know that the STB rule would undermine local rail service, and moreover, that today’s balanced regulations are the key to a safe and economically viable rail network. In communities across the country, this rule would upset that balance, undercutting rail investment, placing local jobs in jeopardy, undermining local control over passenger train dispatch and exposing our neighbors to a less safe rail system.
And we are of course not alone in our thinking. More than 25 national organizations recently wrote to the same set of Congressional leaders rejecting this push for re-regulation, echoing years of nonpartisan analysis opposing unnecessary government intrusion into the sector.
Now is the time for the STB to withdraw this misguided proposal. If they do not, Congress should exercise its oversight authority.
