- The Washington Times - Tuesday, April 17, 2001

A gaggle of special-interest groups will soon descend on Capitol Hill with an unusual mission: to roll back the clock. Their goal is to re-regulate Americas railroads, which have ma aged a steady comeback in the 20-plus years since the Staggers Rail Act removed the federal government from the business of railroading.

Thanks to deregulation, the cost of shipping freight by rail has dropped 55 percent in constant dollars, saving more than $9 billion every year. Rail labor productivity has risen 264 percent since passage of the Staggers Act in 1980; at the same time, safety has improved and the employee injury rate is down 70 percent.

In total, America´s railroads move an astonishing 27 million carloads every year. Trains carry more than 40 percent of the nation´s intercity freight; 70 percent of the new vehicles produced by domestic auto manufacturers; 40 percent of the nation´s grain; and 64 percent of the nation´s coal, which generates more than half of our electricity.

Without railroads, virtually every product we buy would cost more. In addition, our already crowded highways would be choked with even more freight traffic. It would take 3 million trucks to equal the capacity of the rail fleet.

In summary, railroad deregulation has been an unqualified success. Yet a small group of railroad customers, primarily bulk shippers, wants to dismantle this efficient, productive network. They ostensibly seek to increase competition, but what they really want is a return to government microregulation.

All of us, of course, would like lower prices for whatever we buy, but most of us realize companies must earn a profit to stay in business. That principle is especially true for the railroad industry, which spends an average $10 billion every year to maintain its infrastructure including 133,000 miles of rail lines before it can invest in new projects or return a nickel of profit to shareholders. In fact, a major reason for the Staggers Act was to restore profitability to an industry that was going bankrupt and could not afford even basic track maintenance.

Currently, competition and free-market forces are allowed to set rail rates and service standards. In addition, the federal Surface Transportation Board has the authority to set maximum rates or take other actions if a railroad has been found to have abused its market power or engaged in anticompetitive behavior. This system of balancing competition with limited regulation protects shippers while allowing railroads to compete in the free market.

Unfortunately, efforts to achieve re-regulation through forced access to privately owned rail lines, or artificially manufactured elements of "competition" threaten to undo the gains railroads have achieved since 1980, and the immense benefits that have been passed along to the public.

As two Auburn University professors, Robert Eked R. and Robert Hebe, pointed out in a 1988 report, re-regulation "would thwart the public interest by raising costs for millions of shippers and consumers, and jeopardizing the security of the U.S. rail system, merely to placate special interests a small number of coal-mining companies and … utilities."

With the growing complexity of today´s commerce, including the importance of just-in-time shipping, a competitive, productive railroad industry is more important today than ever before. Deregulation has allowed America´s railroads to provide better service at lower cost. Turning back the clock would be as senseless as making trains run backward.

Susan Molinari, a former Republican congresswoman from New York, chaired the House railroad subcommittee from 1995 to 1997. She is a consultant to the rail industry.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide