As we head into an election with an almost singular focus on economic recovery and job creation, it bears noting the anniversary of a likely unknown American success story. October marks the 30th anniversary of the Staggers Act, a watershed piece of legislation that ushered in today's modern freight rail industry.
Signed into law in 1980 by President Jimmy Carter, the Staggers Act fundamentally changed our nation's railroads. By extracting the federal government from the day-to-day running of the railroad business, and allowing the marketplace to determine success or failure, the Act helped put a teetering rail industry on sound financial footing.
It is no coincidence that in the last three decades, the nation's railroads have served as the backbone of America's economic expansion, generating hundreds of thousands of high paying union jobs while supporting millions more across industries as diverse as manufacturing, agriculture, technology, and chemicals.
Despite this success, there are some interests urging Congress to undo the progress borne out by the Staggers Act over the last 30 years. Such efforts would impose new rules on railroads that could curb employment growth at a time when job creation is at a premium, and our nation rallies to avoid a double-dip recession.
Sadly, those leading the charge to undo the success of the Staggers Act are operating on flawed facts, asserting the current regulatory system needs to be reformed. In reality, moving goods by rail is highly cost effective and provides immense benefits for the typical cash-strapped American consumer. Any discussion about widespread changes to current policies should at least be based on realities of the marketplace and not the desires of a select group of companies.
According to the American Association of State Highway and Transportation Officials, if all freight were moved by trucks instead of trains, costs to American consumers would jump by almost $70 billion a year. Why? Because the average rail shipper can move twice the freight today for the same price it paid almost 30 years ago. That is a bargain that translates into savings passed onto consumers, to businesses competing in the global marketplace - and translates to more money for companies to expand and prosper.
U.S. freight railroads are also the most affordable among the world's major countries. According to data from the World Bank and other sources, U.S. freight rail rates are half those in major European countries and well below China and Japan as well. U.S. rates have risen much more slowly than the cost of consumer goods and services, like cable television and phone services or staples like bread and eggs.
So who is complaining about rail rates? Mega-companies with huge profits who want even more profits -- such as major chemical, utility and agri-business companies with great market power, and often, major investments around the world.
Contrast that with the rail industry, which has used private capital to pour records sums back into building and maintaining the nation's rail network infrastructure. In fact, railroads have invested $42 billion in just the past two years in network expansion and maintenance -- a massive level of investment that will not be possible if the advances triggered by the Staggers Act are rolled back.
Freight rail is at the heart of at least three Obama Administration goals: doubling exports in the next five years; shifting more freight from trucks to fuel-efficient trains, and expanding intercity passenger rail service across the country. But undermining the railroads' ability to make private investments in the nation's rail network that supports both freight and passenger rail will make those goals all the more difficult to achieve.
Freight railroads today are a shining example of the American success story -- proving what is possible when the right balance is struck between government regulation and private innovation. With national unemployment levels hovering over 9 percent and poll after poll showing that Americans believe job creation must be the top goal of Congress and the Obama administration, now is not the time to go back to the days when government ran our nation's railroads and bankruptcy threatened rail commerce.
They've pocketed money for a century or more that should have been reinvested in their infrastructure, and now they find themselves behind.
As a systems process engineer, I'm a proponent of rail solutions, but I've been involved in upgrading their inter-line billing systems and have had some insight as to their "waste", which could feed small countries.
I don't see rail being as proactive as I should hope they need. What happens to the major coal carriers when coal demand drops (and it will) because of a decentralized energy generation grid that is cleaner for the environment?
No, the taxpayer need not be robbed to pay for a wealthy industry's infrastructural investments. Especially when we shall pay for it at the stations.
All the more reason we should be producing more domestically. We have the perfect distribution infrastructure in place, we have plenty of natural resources, a huge amount of arable land, and perhaps the best geographic position in the world. When will we figure out how to use this to our advantage once more?