Balanced Regulation
Balanced regulation is needed to help ensure freight rail can continue to meet America’s needs.
By the 1970s, decades of over-regulation had brought America’s freight railroads to the brink of ruin. More than 20 percent of rail mileage was owned by bankrupt railroads, safety was deteriorating, and rail tracks and equipment were falling apart because railroads couldn't afford the repairs.
Recognizing the need for change, Congress passed the Staggers Rail Act of 1980. The Staggers Act created a balanced, common-sense regulatory system that gives railroads the opportunity to chart their own success. Balanced regulation means lower prices and better service for rail customers and consumers and allows railroads to operate in the most efficient and cost-effective way.
Balanced regulation has been a resounding success for consumers, rail shippers, and railroads themselves. Consider:
- Average inflation-adjusted rail rates (as measured by revenue per ton-mile) are down 51 percent through 2010. That means the average rail shipper can move nearly twice as much freight for the same price it paid more than 25 years ago — saving consumers billions of dollars in shipping costs each year.
- Railroads are much safer. From 1980-2010, the train accident rate was reduced by 77 percent and the employee injury and illness rate fell by 82 percent. 2010 was the safest year ever for railroads, breaking the safety records set in 2009.
- Freight railroads have reinvested more than $480 billion back into their operations from 1980-2010, creating a national network second to none worldwide. Over the past few years, railroads have re-invested more back into their networks than ever before.
- Railroads are stronger financially. Return on investment, which had been falling for decades, rose to 4.4 percent in the 1980s, 7.0 percent in the 1990s, and 8.0 percent from 2000 to 2010. That’s important, because railroad earnings today lead to rail investments in new locomotives, tracks, bridges, and more for tomorrow.
More Information:
AAR Background Paper: The Need for Reasonable Railroad Regulation (PDF)
AAR Background Paper: The Impact of the Staggers Rail Act of 1980 (PDF)
AAR Background Paper: Rail Earnings Today Pay For Rail Capacity and Service Improvements For Tomorrow (PDF)
AAR Background Paper: Maintain Railroad Antitrust Laws (PDF)