Railway Age - April 2010 - (Page 29)
Great expectations in hard times
Waging a defensive war
By Lawrence H Kaufman, Contributing Editor
The railroads will help the U.S. economy recover—if Congress doesn’t hinder them.
By Douglas John Bowen, Managing Editor hroughout a distressing 2009, many analysts and economists, and not a few ordinary citizens, searched for any signs of economic recovery, seemingly in vain. Some had hearing keen enough to hear one voice repeatedly stressing the positives: the U.S. freight railroad industry. True, rail freight suffered along with most other industrial, commercial, and service sectors, duly documented by Association of American Railroads weekly traffic reports. But AAR and the industry itself repeatedly noted that rail’s fundamental economic posture was sound, and would be a factor—if not the factor—leading the economy to recovery. AAR formalized its message in February, releasing “Great Expectations: Railroads and U.S. Economic Recovery,” to drive the point home. As 2010 progresses, rail traffic is indeed recovering, appearing to set the stage for some form of economic rebound, strength yet to be determined. Still unclear is whether the freight rail industry’s pivotal role in that recovery will be more widely acknowledged. Indeed, congressional activities and focus in Washington at times seem more intent on punishing the industry for (or despite) its strong economic performance.
A convergence of benefits . . .
“Whether it’s by supporting millions of American jobs, keeping
he battle between railroads and their price-sensitive customers over legislation that would re-regulate the railroads has become open warfare. Price-sensitive customers like to call themselves captive shippers; perhaps that makes them objects of sympathy, something that gigantic companies have a hard time convincing rational observers. These rail customers have been unhappy ever since passage of the 1980 Staggers Rail Act, which substantially deregulated railroads. Staggers didn’t give railroads complete freedom, though, and one of its most important provisions is a safety net to protect captive shippers from railroad abuse of unrestrained market power. Shipper lobbies have sought changes in the Staggers Act since the ink was barely dry on President Jimmy Carter’s signature. One difficulty of waging a defensive war in Washington is that you never win. Opponents come back again and again, and eventually they may convince key members of Congress that there is a problem that needs fixing. That’s what has happened with rail deregulation. The Senate Commerce, Science and Transportation Committee approved the Surface Transportation Board Reauthorization Act (STBRA), and shippers, carriers, and congressional staffs continued working diligently to craft a measure all parties could agree on. They failed. In mid-February, the National Industrial Transportation League (NITL), which calls itself “the voice of the shipper,” endorsed the version of STBRA that awaits Senate floor action, calling also for antitrust law changes that would make it increasingly difficult for railroads to conduct business without exposing themselves to legal challenge from state attorneys general or private shippers. Railroads negotiated in the hope of reaching an accommodaAPRIL 2010 Railway age
Table of Contents for the Digital Edition of Railway Age - April 2010
Railway Age - April 2010
From The Editor
Regional Railroad Of The Year
Short Lines In The Buffett Era
Short Line Of The Year
Great Expectations In Hard Times
Short Line/Regional Perspective
Getting Better With The Basics
100 Years Ago
Railway Age - April 2010