WASHINGTON, DC, May 13, 2015 (Press Release) -Partial deregulation of the freight rail industry 35 years ago was a catalyst that still continues to revitalize railroads, while ensuring they have enough resources to meet the demands of an economy on the rise, the top U.S. freight railroad representative told House lawmakers.
"The global superiority of U.S. freight railroads is a direct result of a balanced system of economic regulation that relies on market-based competition to establish rate and service standards, with a regulatory safety net available to rail customers who need it," said Edward R. Hamberger, president and CEO of the Association of American Railroads.
"This balanced regulation has allowed railroads to improve their financial performance from anemic levels prior to Staggers to much healthier levels today," Hamberger said.
Hamberger was testifying before the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials concerning the benefits of the Staggers Act of 1980. That law partially deregulated freight railroads, serving as an economic catapult that rejuvenated an industry on the brink.
Massive annual rail company investment in the 140,000-mile rail network is required to keep the nation's economy moving because the companies - and not U.S. taxpayers -- bankroll its operation and maintenance. This is in stark contrast to other modes of transportation, such as highways, paid for by taxpayers.
Thanks to partial deregulation, which sparked earnings increases, railroad spending on infrastructure and equipment has soared over the past decade. All told, America's freight rail industry has invested $575 billion since 1980 for enhancement of the nation's freight rail network. The money is earmarked for such priorities as upgraded track, and new locomotives and freight cars needed for new capacity to meet growing demand.
"Railroads are preparing for tomorrow today, all over the country. They're expanding intermodal terminals in northwest Ohio and outside Atlanta; double-tracking track between North Dakota and Montana; installing thousands of new rail ties in southeastern Arizona; upgrading signaling systems in Chicago; and building a major new rail yard between Dallas and Houston," Hamberger said. "These are just a few examples of the thousands of similar projects that freight railroads undertake each year."
Some are urging Congress and the administration to turn back the successes of the Staggers Act, which would result in lesser revenue for the rail industry to reinvest back in their businesses. Adequate rail earnings are critical for railroads to make the capacity investments required to meet customer demand and propel the economy forward.
For reinvestment to continue, "there must be appropriate public policies," Hamberger said. "Private railroad investment in transportation infrastructure should be encouraged, and regulations and legislation should not adversely affect railroads' ability or willingness to make those investments."