Let's leave well enough alone

Let's leave well enough alone

by Cliff Lynch
29. April 2013 08:00

There probably was dancing on the tracks when Jay Rockefeller, the Democratic senator from West Virginia, announced that he would not run again in 2014. Rockefeller has been one of the major proponents of re-introducing regulation to the rail industry, in spite of the tremendous success we have experienced since the passage of the Staggers Act in 1980, which removed most of the stifling regulation under which the rail carriers had been operating since 1887.

The Consumers United for Rail Equality (CURE), an organization composed of rail shippers, has been lobbying hard in Congress for some time now, and Rockefeller has been a strong supporter of their efforts. The major issue revolves around those industries that are served by only one railroad, referred to as "captive shippers". They want the ability to have a choice in the rail carriers they use which is often impossible because of their single railroad locations. Many of these are coal mines, and many of those are located in West Virginia, which suggests that Mr. Rockefeller knows who butters his bread.

I believe that all shippers should be treated fairly, but to regulate the railroads would throw us back into the chaotic bureaucracy that existed before 1980. Most members of Congress were not in office then, but those of us who worked in the industry in the regulated environment can recite a litany of horror stories. It took months or even years to get new rates approved by the Interstate Commerce Commission. A carrier needed permission to get into the business, and then it needed permission to get out. Carriers were losing millions of dollars and capital improvements were a fantasy. Since 1980, however, the nation's railroads have invested over $500 million in plant and equipment, and the Class I railroads in the country all are making a profit. Many railroad employees during the era of regulation spent their entire careers at one carrier, and never saw a profit.

The NIT League is working with the Surface Transportation Board toward an equitable solution, but the worst thing that could happen is for Congress to jump in and try to fix things. More often than not, they are simply a solution looking for a problem.

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