More Burdensome Regulations Are Not What the
Freight-Rail Industry Needs by Edward R. Hamberger, 4/5/18
Despite the Trump
administration’s deregulation efforts, a small government agency is considering
adding more red tape to this critical sector of the economy.
As the winds of deregulation blow through
D.C., a small federal agency is considering a proposal that would
introduce more red tape
into an important sector of the American economy.
At issue is a coordinated campaign by
major U.S. companies to unravel indisputably successful deregulation and enact
backdoor rate regulation on freight railroads. While pretending to support
“deregulation,” a cohort of companies and groups flying under the banner of the
innocuously named Rail Customer Coalition (RCC) are calling on the government
to disregard decades of precedent and congressional direction and ignore the
rights of private businesses to use their property to act in ways that ensure
their future economic viability.
The proposal currently pending at the Surface
Transportation Board would force a railroad to move freight cars over its
tracks and then hand them over to competitors. The proponents of the measure
also seek a cap on the price of such services by having the government set the
fee. This would be a significant departure from the current practice of
switching freight cars among railroads through voluntary, privately negotiated
agreements. And most alarmingly, it would occur absent any showing of
wrongdoing by the railroad.
Because switching operations among
railroads require extensive work, widespread forced switching would greatly
reduce network fluidity, drive up costs for many U.S. companies that ship over
freight rail, and reduce revenues needed for rail-infrastructure investment. If
the STB were to adopt some of the more radical elements of the proposal,
railroads could even be forced to modify existing infrastructure or build new
systems to facilitate switching where it is not currently possible.
The proponents of such a misguided
policy are clear about their motivations: They hope that government
intervention will lower their own rail-shipping costs. Never mind that the STB
has a clear pathway for direct rate regulation, which this would ignore, or the
fact that rail rates, adjusted for inflation, were 45 percent lower in 2016
than in 1981.
Indeed, the fight sets a dangerous
precedent, particularly when considering the RCC’s overt pandering to the
White House. Though proponents of forced access use terms like “free market” and tout the need to “cut
red tape,” the group’s “solutions” would actually constitute a drastic increase in regulation, and
thus a clear break from the goals of the Trump
administration.
Sure, the STB can do more to streamline
procedures and legally protect shippers and railroads alike, just as it was
directed to do when reauthorized by Congress in 2015. But that reauthorization
explicitly refrained from directing the STB to embark on a forced-access
regime.
If the proponents of aggressive
regulations succeed, the ability of railroads to serve them
will suffer greatly. Railroads, which have seen more than $100
billion in industry investment over the past four years
alone, require ample, costly upkeep to safely and reliably move
goods.
Moreover, this proposal would have broad
real-world implications, because the rail industry touches nearly every part of
the economy as a means of transporting raw commodities and finished goods. The
industry does so by privately bankrolling a 140,000-mile rail network.
If the proponents of aggressive
regulations succeed, the ability of railroads to serve them will suffer greatly. Railroads, which have
seen more than $100 billion in industry investment over the past four years
alone, require ample, costly upkeep to safely and
reliably move goods. The RCC’s proposal would undermine the industry’s ability
to provide such upkeep in the future.
The fight will intensify soon as the
administration and Congress work to fill three vacancies on the STB, which has
wisely resisted the call to rule on such a far-reaching regulation until it is
fully staffed. Current and future STB members should bear in mind a
foundational truth as the process ensues: Only those rent-seeking through
sweeping government intervention support a drastic shift in railroad
regulation.
Last year, 25 leading free-market
organizations urged policymakers to reject the overtures of the
RCC. From Brookings to the Heritage Foundation, policy experts across the spectrum oppose a return to an era
when government mandates routes and sets prices — because ultimately, that
approach is the antithesis of American free-market principles.
Edward
R. Hamberger is the president and CEO of the Association of American Railroads.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment