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The U.S. Department of Transportation's (USDOT) new report on the status of the U.S. supply chain ignores important suggestions provided by the freight-rail industry, according to the Association of American Railroads (AAR).
Yesterday, on the one-year anniversary of President Joe Biden's executive order on supply chains, the USDOT issued a report that lays out vulnerabilities in the nation’s freight and logistics supply chain and provides actions needed to speed up the movement of goods from ships to shelves.
Addressing supply-chain challenges is a top priority for the Biden administration. The USDOT has taken immediate and long-term actions to bolster supply chains, and the report provides a path to continue that work, including the recent announcement of $450 million in grant funds available for port infrastructure projects.
AAR President and CEO Ian Jefferies praised the Biden administration for its focus on supply-chain problems. However, the USDOT report's discussion and policy recommendations directed at freight railroads "raise concerns that powerful special interests are co-opting logistics challenges created by the pandemic to obtain below market rates and pad their own profit lines," Jefferies said in a statement.
"Make no mistake: The recommendation for federal regulators to impose new economic regulations is at direct odds with the stated goals of this report to increase freight fluidity and would also lead to freight diversion away from railroads that would hinder the White House’s other stated goal of reducing carbon emissions," he said.
The Surface Transportation Board’s proposed "reciprocal switching" regulation would "create inefficiencies, inhibit investment and in turn make rail transportation less competitive," Jefferies added.
Although freight railroads offered input as USDOT developed its report, it ignores the industry’s suggestions and instead focuses on matters that would disrupt supply-chain fluidity, the statement continued.
An array of stakeholders recently outlined to the STB why economic re-regulation of rail will not improve the network, but instead "do little more than appease the rent-seeking interests of the chemical sector and its allied shipper interests," said Jefferies.
"The administration should disregard misleading data analysis and heed these real-world concerns to ensure that its policy agenda is consistent with its top-line goals to increase freight fluidity, spur investment and reduce the environmental impact of the supply chain," he added.
To read the USDOT report, click here.