The Rocky Relationship Between Rail and Regulation

These days, the statistics are against the majority of us celebrating a 30th anniversary of any kind. But the Staggers Act, which largely deregulated the U.S. rail industry, has reached that milestone. It hasn’t always been easy, and doubts often surfaced about whether it would survive. In fact, almost as soon as the Act became public law, there were whispers that it wouldn’t last.

Today, those whispers about the Staggers Act are growing louder, turning into shouts in some cases. But the rail industry won’t go quietly back into regulation, nor should we let it.

We should listen to the claims that this is a different era and Staggers hasn’t kept pace. But we should listen in the context of rational review, not outright rejection or radical revision.

I grew up in a railroad family and, even before I entered this field, I was acutely aware of the industry’s condition. I watched the railroad’s logos change from the red keystone of the Pennsylvania Railroad to the green Penn Central, then the blue Conrail.

I sensed some tension as each change occurred, though my father tried to keep it from coming home with him. It was unavoidable, however, when the bank refused to accept his paycheck from the bankrupt Penn Central.

I also saw firsthand what had become of the rail infrastructure when I worked summers on the track as a “gandy dancer.” The industry coined a few new terms in the mid-1970s, including “deferred maintenance” and, as a consequence, “standing derailment.” It’s hard to imagine today that the infrastructure was so bad that a train standing still could derail, but that’s what happened.

We shouldn’t dismiss rail industry claims of nearly half a trillion dollars of investment in its systems as merely a rationale for higher rates. The North American rail network accomplishes what it does today because the rails had access to massive amounts of capital to invest. Let’s not cut that off and return to 1970s infrastructure.

Among the most critical issues for the rail system today are congestion, poor infrastructure, or inefficiency at the points where it connects to other modes — especially ports. That’s the next big challenge in making multi-modal networks more efficient, and it has macro-economic impact.

We need to review pricing mechanisms and monitor for abuses, that’s true. But, we need to do it in the context of a rail network that is part of a global supply chain and interlocking economies, not for some parochial self-interest. We should be integrating all of the transport modes under a single, cohesive national transportation policy designed for tomorrow’s economy.

A 30th anniversary is a good time to renew vows, and this one is no different. Our relationship with rail is important. It has survived some very rough stretches and emerged stronger, but it’s a delicate balance.

Let’s re-commit to building the most efficient and effective global trading engine with adequate oversight and enforcement. We don’t want to go overboard when we have come this far.