Railway Gazette (London): Don't Re-regulate Rail Freight
(London) Railway Gazette International: Don't re-regulate rail freight
AAR President and CEO Ed Hamberger in the August 2008 edition of the Railway Gazette International wrote that the U.S. freight rail system plays a key role in moving the economy, and does so with unmatched and environmentally sound fuel efficiency.
"It's been called the freight rail renaissance, and it couldn't have occurred at a more opportune time," Mr. Hamberger wrote in the European publication. "Our figures show that 2006 and 2007 were the busiest two years in history for North America's railroads. Last year US railroads moved a ton of freight a whopping 85 percent further than they did in 1980."
"If just 10 percent of the long-haul freight now moving by road moved by rail instead, the USA could save 3.8 billion litres of fuel a year," he wrote. "The Environmental Protection Agency estimates that same 10 percent shift would also reduce annual greehouse gas emissions by around 11 million tons."
America's freight rail system plays a major part in reducing energy use and addressing environmental concerns in North America, but if Congress increases rail regulation, much-needed investments in additional capacity will not materialize.
Mr. Hamberger warned of the four bills currently working their ways through Congress, which, if enacted into law, "Would impose on railroads a regulatory system similar to that which existed prior to 1980, with bureaucrats dictating rates, routes and services."
During the era of tight regulation, more than 20 percent of the industry went into bankruptcy, accident rates soared, and rail's market share dwindled.
Since 1980, when the Staggers Rail Act partially deregulated the industry, US railroads have invested more than $420bn to maintain and improve track, rolling stock and signalling. Freight traffic volumes have almost doubled. Productivity of both infrastructure and employees has more than tripled, and average freight rates have halved in real terms.
"Demand for rail freight service is now at the highest level in US history, and is projected to almost double by 2035," Mr. Hamberger wrote. "But to meet this demand, the capacity of the rail network must grow."
"Wall Street is emphatic," he wrote. "Investment capital for rail expansion would evaporate with re-regulation."
The impact would be felt beyond US shores as well. Railroads have become the vital link for moving consumer goods from ports to inland markets, and exports from US manufacturers, farmers and miners to markets abroad. The lack of efficient rail service would drive up the cost of both imported and exported goods.
"The lesson of history is clear," Mr. Hamberger wrote. "Rail regulation was an abject failure. Deregulation worked."
Read the full article in the Railway Gazette International. Visit http://www.railwaygazette.com/news_view/article/2008/07/8707/dont_re_regulate_rail_freight.html