AAR: Railroads On Track In Free Market Economy
6 Aug 2008
AAR President & CEO Ed Hamberger in a July 31, 2008 article in U.S. Industry Today, countered claims made by American Chemistry Council (ACC) on regulating railroads saying "Deregulation is key to meeting 21st century demands."
In his article, "Railroads On Track," Mr. Hamberger noted that the views expressed in the May 29 article by the ACC's Jack Gerard advocates for "a bureaucratic system in which regulators make all the important decisions."
Contrary to Mr. Gerard's claims, some 80 percent of all chemicals are shipped by modes other than railroads.
"That's not a monopoly," Mr. Hamberger said. "That's the marketplace at work."
Prioro to the Staggers Act in 1980, railroads once were regulated with disastrous results that pushed more than 20 percent of the railroad industry into bankruptcy, fostered high accident rates and poor service.
Since then, railroad productivity has tripled, accident rates have declined by 70 percent and average shipping rates have dropped by half on an inflation-adjusted basis. In 2006, the Government Accountability Office said: “Without a doubt, rates have decreased for most shippers, and most shippers are better off in the post-Staggers environment than they were previously. This outcome suggests that widespread and fundamental changes to the relationship between the railroads and their customers are not needed.”
Louis S. Thompson, the former railroad expert at the World Bank, put it this way: The U.S. freight rail network "gives the world's most cost-effective rail freight service."
Rail also has important environmental advantages. A single intermodal train can take 280 trucks off the highways. Last year railroads moved a ton of freight an average of 436 miles per gallon of diesel fuel, more than three times as far as that same ton could be moved by truck. Trains also pollute less than trucks. If just 10 percent of the long distance freight moving by truck went instead by rail, the nation would save one billion gallons of fuel annually and reduce greenhouse gas emissions by 12 million tons a year.
"None of that can happen, however, unless rail capacity is expanded," Mr. Hamberger wrote. "Today’s railroad customers deserve a 21st Century rail system that meets their needs efficiently and economically. They deserve a system they can depend on, a system that can grow as they grow. Yesterday's regulated system won't give it to them, but today's deregulated, market-based system can and will."
Read the full article at http://www.usitoday.com/article_view.asp?ArticleID=we124.