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11/22/2013


Rail News: Federal Legislation & Regulation
Sen. Rockefeller, AAR disagree on freight-rail implications associated with updated commerce committee report



U.S. Sen. John "Jay" Rockefeller (D-W.Va.) yesterday released an update to a report on the freight-rail industry's financial state that the Senate Committee on Commerce, Science and Transportation issued in 2010.

Titled, "Update on the Financial State of the Class I Freight Rail Industry," the committee's new report concludes that Class Is' financial performance is at its strongest point since the passage of the Staggers Act in 1980.

Now that more than three decades have passed since the Staggers Act was enacted, the Surface Transportation Board needs to take a "close hard look" at whether large freight-rail companies "enjoy an unfair competitive advantage," said Rockefeller, who chairs the committee, in a press release.

"The Staggers Act was designed to give a boost to the rail industry during a time when railroads were struggling, but today the railroads are enjoying tremendous financial success," he said. "At this point the evidence is clear that the dominant freight railroads are financially strong."

But the committee's updated report doesn't take into account that the freight-rail industry's return to financial health has resulted in record private investments — not taxpayer dollars — being plowed back into the nation's rail network that serves the needs of diverse freight shippers and passengers alike, said Association of American Railroads President and Chief Executive Officer Ed Hamberger in a prepared statement.

"At a time when there is pressure to reduce government spending on just about everything — including transportation infrastructure — the country's privately owned freight railroads have, in the last three years alone, reinvested nearly $70 billion back into the rail system, including $25.5 billion in 2012," he said. "There is nothing wrong with success. In fact, the rail industry's success is predicated on the fact that the balanced regulatory system in place today is working. This success should be lauded, not undermined."

In addition to ongoing investments, freight railroads have continued to hire. Over the past three years, the freight-rail industry has boosted employment by 6 percent, said Hamberger.

"Much is riding on freight rail to continue helping deliver our recovering economy and all efforts should be focused on letting the current system work," he said.

Yet, the current system doesn't necessarily provide the most competitive and healthy freight-rail network to support domestic producers and promote the growth of jobs and the U.S. economy, said American Chemistry Council (ACC) officials in a prepared statement. The committee's report demonstrates that the rail industry's financial health has improved dramatically and much has changed since Congress last addressed freight rail reforms nearly 40 years ago, they said.

"Ensuring that we have an accurate picture of the current state of the major railroads is important to help guide policymakers on the best course for policy reforms," ACC officials said.

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