The year was 1980.
The economy was in the midst of a crippling recession; people were rushing to theaters to see The Empire Strikes Back (or if they were a little older, The Shining); Ronald Reagan — still better-known by some as an actor than a politician — had just won the Republican nomination for president; and America’s freight railroads were on the brink of collapse.
Can you imagine?
For most people today, the deteriorating state of American freight rail leading up to and through the 1970s is unimaginable. Nearly 100 years of overzealous and outdated regulations had left the industry struggling to earn enough revenue to operate let alone compete. Railroads were going out of business left and right, including many major Class I railroads like Penn Central, which was, at the time, the biggest corporate bankruptcy in U.S. history. The dire situation wasn’t just economic: railroads did not have the money to invest in infrastructure, meaning safety suffered. Standing derailments — cars at rest simply falling off the tracks — happened often.
Then came the Staggers Rail Act of 1980, which breathed new life into America’s freight railroad industry. This October marks the 40th anniversary of the bipartisan bill (named for West Virginia Congressman Harley Staggers), which passed in Congress with overwhelming support. Both parties agreed that railroad regulation needed to change if the rail industry — and ultimately the American economy — was to survive. The Staggers Rail Act placed freight rail on a level playing field with other modes of transportation, while ensuring individual railroads were able to earn enough to operate and reinvest.
Fast forward to 2020.
America’s freight railroads are one of the most efficient and cost-effective transportation networks in the world, working with tens of thousands of rail customers to deliver economic growth, support job creation, and provide crucial environmental benefits while preparing to meet the freight transportation challenges of tomorrow.
Gone are the days of railcars falling off the tracks. Today, railroad infrastructure is rated among the highest in America thanks to more than $710 billion in private railroad investments since the passage of Staggers. That’s $710 billion saved for taxpayers: unlike other modes of transportation that receive large federal subsidies or grants, railroads pay for their own infrastructure.
These investments have also brought technologies once only found in 80s’ sci-fi movies into everyday use on the rail network, with automated inspection technologies, and fuel management systems improving safety, customer service and efficiency. All of these advancements have happened while average rail rates (measured by inflation-adjusted revenue per ton-mile) are 43% lower today than in 1981, meaning the average rail shipper can move much more freight for around the same price it paid nearly 40 years ago.
Back to the future.
A lot has changed since 1980. The birth of the Internet, ubiquitous two-day shipping, and the rise of smart technologies have all fundamentally transformed the transportation sector in ways that 1980s politicians could never have predicted. But despite that change, it’s impossible to understand today’s freight rail sector, and the long-term impacts of transportation regulation, without a bit of history. Over the coming weeks, we’ll be marking the 40th anniversary of the Staggers Act through a “retro-predictive” series below, examining the key provisions of the legislation, why it matters today and how it helps lay the tracks for tomorrow’s future.
- Article 2: 20/20 Vision: How the Staggers Act Prepared American Railroads for Today
When Congressman Harley Staggers and his colleagues helped save the freight rail industry by passing the Staggers Rail Act of 1980, they had no idea the changes America would see over the next 40 years and just how important their legislation would become. Learn more about the impact of the Staggers Act and how the Surface Transportation Board — freight rail’s economic regulators — can help bring to life the bright vision railroads have for the future.