Ted: Hello, my name is Ted. I’m an editor of AAR’s newsletter, The Signal, and the host of our new show, Coffee Break. I’m delighted to be joined today by Patrick Fuchs, Chairman of the Surface Transportation Board.

Patrick: Delighted to be here. Thanks for having me, Ted.

Ted: Thanks for joining us. We’ll jump right in, but first, on a lighter note, what are you drinking in your coffee cup?

Patrick: Literally, I’m drinking water right now.

Ted: All right. Tell us a little bit about your background and how you got to the STB.

Patrick: I appreciate it. I started in government at the Office of Management and Budget, specifically in the Office of Information and Regulatory Affairs, which oversees the federal regulatory process.

We assess significant and economically significant regulations and determine whether they can be made more beneficial or less costly—hopefully both. One part of my portfolio was railroads, so I worked primarily with regulations coming from the Federal Railroad Administration.

From there, I moved to the Senate Commerce Committee and the Surface Transportation Subcommittee under the leadership of Chairman John Thune. I had the opportunity to work on various pieces of railroad legislation, and it was a really enriching experience. After that, I was fortunate enough to be nominated to the Surface Transportation Board.

Ted: And remind us, how long have you been there?

Patrick: At the Board?

Ted: Yeah.

Patrick: About seven years now, if you can believe it.

Ted: Time flies. Talk about that time. How have things changed from seven years ago to today?

Patrick: It’s a great question. If you look at the Board generally, it was created by the ICC Termination Act of 1995. Before that, its predecessor was the Interstate Commerce Commission, which was really the original federal regulatory agency under the Interstate Commerce Act of 1887.

One of the things you experience when you come to the Board is the weight of that history and more than a century of precedent. At the same time, you’re working with an industry that has evolved dramatically. We’ve seen periods of tremendous railroad growth, followed by decline, then a rebirth through deregulation, and later the modernization of the agency under the ICC Termination Act.

When I joined the Board in 2019, it was shortly after the STB Reauthorization Act, which made several positive procedural reforms and provided additional authorities for the agency.

Fundamentally, we had an industry structure and legislative framework that had been in place for a couple of decades. Our job was to take a fresh look at what had worked well, what hadn’t worked well, where the Board wasn’t making the best use of its authorities, and where we were still more burdensome than we needed to be.

When I joined, Chairman Ann Begeman had a lot of energy and fresh ideas. It was a great opportunity to assess how we’d been doing business over the previous 20 years and think about how we could improve our regulatory framework.

Ted: You’ve worked with several different Board leaders. You mentioned Ann Begeman, who was chair when you started, then Martin Oberman, and now you’re serving as chair yourself. Those chairs represented different political parties, and we’re obviously in a very political town. Do you think the STB bucks that trend when it comes to partisanship?

Patrick: If you look at the economic regulation of railroads, it’s not one of the most partisan issues in the country. Many of our disputes are really about the evidence and the arguments. A large part of what the Board does is licensing work. As a general matter, there are certainly different regulatory philosophies and different ideologies that people bring to the job, but it’s not one of the most heated areas of public debate. That actually makes it a very enjoyable place to work.

Part of the reason is that railroads are such an important economic backbone touching so much of the country, but also because so much of the industry can be measured. You can measure rates, service, volumes, and outcomes. It’s a very objective landscape.

That provides a lot of feedback about how things are actually performing. You can evaluate the outcomes of licensing decisions or complaint cases. When you’re grounded in those facts, it lowers the temperature because you’re talking about objective information.

When it comes to Ann Begeman and Martin Oberman specifically, both helped maintain a very collegial culture at the Board. We all recognize that each person brings a different perspective and expertise, and we learn from one another. Even with different skill sets and different ideologies, we all tried to make each other better. That’s something we’ve continued, and it’s become an important part of the Board’s culture.

Ann was an incredibly hard worker. She was passionate and brought two decades of transportation policy experience from Capitol Hill. Marty came from a trial law background. He loved debating ideas and engaging in thoughtful discussions. You could spend hours talking through different issues with him.

Both brought qualities that made everyone around them better. When you’re debating someone knowledgeable, it elevates your own thinking. When you see someone working that hard, it motivates you to work just as hard yourself. They were wonderful people to work with and really helped build the collaborative culture we still have today.

Ted: I know you studied economics in college, and I’ve always thought of you as a constant learner. What has influenced your philosophy and how you approach your job, particularly from a regulatory standpoint?

Patrick: That’s a great question. If I go back to my professional experiences, my time at OMB and OIRA was heavily grounded in cost-benefit analysis and a utilitarian perspective.

Then I went to Capitol Hill, where you’re constantly engaging with constituents and stakeholders. That gives you a much greater appreciation for the practical side of policymaking. Not everything fits neatly into a model or a spreadsheet. Those tools are important because they discipline your thinking, but there are many other factors that come into play when you’re implementing policy.

There are also value systems beyond a purely utilitarian framework that help guide decisions in public service.

Then you come to the Board with that grounding in economic analysis and practical experience, and now you’re responsible for putting those decisions into motion. You’re working within a legislative framework, adjudicating cases, developing regulations, and thinking about administrative processes and how government should function.

Those experiences all shape how I approach the job. But we’re all influenced by more than our professional experiences. When I think about what motivates me, I think about my family, my dad, and growing up in Wisconsin. My father worked multiple jobs to build something of his own, and that instilled a strong work ethic.

That work ethic fits the Board’s workload very well. We may have 150 active cases and issue around 400 decisions each year. While there’s certainly room for big-picture thinking and strategy, there are also times when you simply have to put in the work.

A big part of what shapes me is believing in that grind—working through cases, understanding the facts, and striving for the right outcome. Before you can apply your values, you have to understand the material. You’re not going to make good decisions if you don’t know the facts. So, the biggest thing I try to bring every day is the willingness to work hard, understand the issues thoroughly, and make decisions based on a solid understanding of the record.

Ted: Let’s talk about that. Keeping in mind that we’re recording this in mid-April, what are the high-level issues you’re focused on at the Board? We’ll also set specific transactions aside.

Patrick: Broadly speaking, the values I’m trying to reinforce at the Board are accountability, transparency, and collaboration. From those values flow the issues we focus on. The priorities that are top of mind include permitting reform, preemption, competition, data modernization, and processing cases more quickly and effectively.

Starting with case processing, as I mentioned, we issue about 400 decisions each year. Many of those involve things like trackage rights, new rail construction, or other business decisions that companies depend on to plan investments and operations.

If we can provide more certainty—and do so within a timeframe that matches the pace of business—that creates a real public benefit. That means we have to process our cases efficiently.

That was one of my biggest priorities during my first year as chair because even the best regulatory ideas won’t succeed if you can’t make timely decisions. Permitting reform is another major focus. It ties directly to the speed of decision-making and the cost of doing business.

It also reflects collaboration. Many permitting projects involve railroads and shippers working toward the same goal, whether it’s serving an industrial park, a biofuels facility, or another economic development project.

Sometimes people call this environmental streamlining, but I’ve moved away from that term because we’re really talking about improving the process—not weakening environmental protections.

There are situations where everyone already knows what the outcome will be, or where early engagement allows you to eliminate unnecessary steps. If you can remove six months, a year, or hundreds of thousands of dollars from a project without compromising environmental review, that’s a meaningful improvement.

For smaller projects, like a four-mile spur serving one or two facilities, adding another million dollars or another year to the process can completely change the business case. That also means another year before people are employed or before economic activity begins.

When you multiply those kinds of improvements across the American economy—and rail touches nearly every sector—they become very significant. Preemption is another area where greater clarity would benefit everyone.

By its nature, preemption involves questions about whether federal law supersedes state or local laws. That often leads to litigation before anyone actually sits down to discuss solutions.

If people have a clearer understanding of the legal framework from the beginning, they can spend less time in court and more time working together to address concerns while still respecting the railroad’s statutory responsibilities as an interstate transportation network.

Patrick: Greater clarity also benefits courts. Because preemption cases can be heard in state court, federal court, or before the Surface Transportation Board, judges are often asked to make decisions involving a very specialized area of law. If the Board can provide a clear framework that summarizes the law in one place, it gives everyone a better starting point. Ideally, it helps resolve issues before litigation even begins. But if a case does end up in court, that guidance can still help judges and the parties reach a better outcome.

Data modernization is another priority because it supports transparency. We’re working to improve how service metrics are presented, including creating a dashboard that makes the data easier to understand. We’re also proposing additional service metrics to provide shippers and other decision-makers with better information as they plan their businesses.

Transparency also extends to our own work. We want people to have better visibility into the progress of Board cases and the overall decision-making process. Competition is another important area because market-based competition helps create accountability. As we develop a regulatory agenda, I always try to keep those values—accountability, transparency, and collaboration—in mind.

At the same time, we have to remain focused on our statutory responsibilities. There are always discretionary initiatives we’d like to pursue because we believe they’ll improve the regulatory framework. But we still have to process construction cases, rate cases, transactions, and all of the matters we’re legally required to decide.

As you build a broader regulatory agenda, you have to do so while making sure those core responsibilities are handled thoroughly, fairly, and on time.

Ted: Can you give an example or two where greater clarity would help, particularly when it comes to industrial development?

Patrick: Absolutely. Three examples come to mind. One involves intermodal facilities and customer facilities, particularly where questions arise about road regulation or facilities that are connected to rail operations but aren’t owned directly by a railroad.

Another involves facilities that are part of the rail network but aren’t owned by a rail carrier. There are areas where the Board can provide additional guidance on how preemption applies in those situations.

A third example involves state laws that are implemented under the authority of federal law.

Our preemption statute addresses both state and federal law, and courts generally try to harmonize those laws whenever possible. But there are situations where state actions conflict with the purpose of the ICC Termination Act, which is to maintain the smooth flow of interstate commerce and avoid a patchwork of inconsistent regulations.

Providing greater clarity in those areas would be very helpful. One example, since it’s not currently before the Board, is the California Air Resources Board’s locomotive regulations.

Whether those actions were taken under the authority of federal law or state law, they created a patchwork of regulations that imposed significant costs. Some short line railroads faced the possibility of going out of business, freight could have shifted to highways, and there would have been broader economic consequences.

When you look at the interaction between those regulations, the Clean Air Act, and the ICC Termination Act, that’s an area where additional guidance from the Board could be valuable.

Ted: I remember that issue well. It was good to see it reach a positive conclusion, at least for now. We’ll see what the future holds.

Patrick: Exactly. The value of something like a Board policy statement is that people can rely on it in the future. Because preemption cases can be heard in state court, federal court, or before the Board, a future Board—or even a state judge suddenly dealing with a complicated railroad case—would have a clear document summarizing the law in a coherent way.

Ted: And hopefully it never even gets to litigation because local decision-makers have that guidance from the beginning. But if it does, hopefully the case proceeds much more efficiently. Really, Patrick, we’re grateful that you took the time to join us today and share the work you’re doing. We appreciate your diligence and your thoughtful approach.

Patrick: Thanks so much, Ted.