How Not to Regulate the Railroad Industry

How Not to Regulate the Railroad Industry
AP Photo/Gene J. Puskar

Recently released federal data show the nation’s freight rail industry is safer than ever, fueled largely by private spending that enables research, innovation, and the implementation of new safety technology. So it’s a good time for federal policymakers to step back and reconsider how the government regulates the railroad industry.

According to the Federal Railroad Administration (FRA), train accident rates have declined by 44 percent since 2000, while equipment-caused incidents have dropped 34 percent over the same time period. Similarly, track-caused accidents have plummeted by 53 percent and derailments by 44 percent. 

These safety improvements did not happen by chance. They were driven by railroad investments in infrastructure, maintenance, and technology. Since enactment of the economic regulatory reforms of the Staggers Act in 1980, railroads have poured more than $635 billion into their networks, averaging $26 billion annually in recent years. Nearly $8 billion has been spent on rolling out positive train control (PTC), with freight railroads expected to spend over $2 billion more to implement PTC.  It is no coincidence that the railroads’ safety record has continuously improved since 1980. 

Despite the industry’s safety record, federal regulators have recently implemented and proposed rules that would make rail transportation both costlier and less efficient. These regulations are not backed up by research or data. 

For instance, in 2016, FRA proposed prohibiting railroads from running trains with less than two crew members unless granted permission by the agency — with no criteria established by which a railroad operation would be judged.  The proposal, for which the FRA offered no supporting research or data, could adversely impact the ability of the industry to employ innovative safety technologies as well as impose unnecessary costs.

Another example is the Department of Transportation’s (DOT) requirement that certain trains use electronically controlled pneumatic brakes (ECP) brakes. This is a very costly requirement with minimal safety benefits. DOT’s reasoning has been questioned by both the Government Accountability Office and the National Academy of Sciences. Fortunately, Congress is now requiring DOT to review its rationale for the rule.

Given the railroad industry’s great strides in improving safety, it is an opportune time to question whether significant further improvements can be achieved by pursuing such regulations as the crew-size proposal. The industry thinks not. Rather than dictating how the railroads conduct their business, regulators should focus on setting goals and using performance measures to unleash the railroads’ potential to achieve further safety improvements. The railroads would then have the freedom and incentive to identify the most effective and efficient methods for achieving these goals, building on their past safety achievements. Similarly, joint research projects between government and industry could help improve safety not only for freight railroads but for passenger railroads as well.

The railroad industry and the federal government can work together to build on the industry’s achievements over the last few decades. Such a partnership would be in the public interest. 

Michael J. Rush is Senior Vice President of Safety and Operations at the Association of American Railroads.

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