Congress has turned the spotlight on the nation’s freight railroads regarding both continuing safety and service problems, and it is more likely the legislators will take action to address them.
The prospect of policymakers actually making real changes improved following the fiery train derailment in East Palestine, Ohio, that grabbed public attention earlier this year and gave the Biden administration a black eye because of its initial inaction. Federal officials tried to make up for their embarrassment by generating new rules and members of Congress stepped up as well.
On May 11, the Senate Commerce Committee voted to approve the Railway Safety Act, which now goes on to the full Senate for a vote. It had been introduced in the Senate by Republican J.D. Vance and Democrat Sherrod Brown, both from Ohio.
Only one Republican on the committee other than Vance voted for it, however, and some Republican lawmakers have voiced opposition to provisions like the one that would require two engineers operate a train – something long supported by rail labor and opposed by railroad management, who believe trains can safely function with only one.
Decades ago, the head of a major shipper group explained to me that his organization was more successful in getting trucking rather than rail reforms because, while the trucking industry was diverse and largely made up of small companies,
the railroads were multibillion-dollar corporations who are in a position to play an outsized role on the political scene, particularly when it comes to all-important financial contributions.
That may not be the case here, but so far, the Republican politicians who are objecting to the bill were not known to have expressed any interest in train crew sizes and inspection requirements in past years, for example.
Opponents noted that the original bill was only 18 pages long and has now expanded to 80, but Vance said that was the result of input that came from industry stakeholders, including railroads, rail unions and shippers.
“This bill has changed a lot from what I introduced just a few short months ago,” Vance observed. “We’ve made a number of concessions to the rail industry, a number of concessions to various interest groups, which is why we have so much bipartisan support in this body, but also we have a lot of support from industry.”
In the months since the East Palestine derailment, the Federal Railroad Administration also has initiated rulemakings and issued industry advisories about equipment safety and maintenance issues in an attempt to polish its image after initially being perceived as being slow to react.
The Class 1 rail lines also have been negotiating individually with labor unions to secure additional sick leave for their members.
Of course, if the rail safety bill passes the Senate it would possibly face a more difficult future in the House of Representatives, which is controlled by Republicans. At the same time the Senate was acting the House Transportation and Infrastructure Committee held a hearing on railroads that included testimony from rail shippers and union representatives as well as rail industry executives.
Service Failures Persist
The committee members got an earful about continuing safety and services failures. Greg Regan, president of the AFL-CIO Transportation Trades Department blamed squarely on the railroads’ extreme cost-cutting operations model called Precision Scheduled Railroading (PSR).
PSR seeks to generate the highest possible profits by maintaining the lowest possible operating ratios. To achieve these profits, railroads have stripped rail networks of their physical and human capital, Regan explained.
This included Class 1 railroads slashing their total workforce by 30% and cutting their investments in infrastructure, like rail yards and essential equipment like rail cars and locomotives.
Regan also linked the impacts of PSR on service and operations to poor rail safety. “Contrary to the railroads’ rhetoric, the industry’s safety record is worsening, not improving. Safety failures are pushing the system to the breaking point and this breakdown is negatively affecting shippers.”
He said that Congress could help by passing the common carrier obligation legislation introduced in the last Congress by Sen. Tammy Baldwin (D-WI), which drew support from rail shippers and unions.
This is a requirement that rail carriers serve all shippers equally and without discrimination.
The obligation is embodied in rail regulatory law but needs to be clarified to meet current needs in the face of rail regional monopolies. Similar legislation was introduced in the House last session.
Agreeing was Chris Jahn, president of the American Chemistry Council, a member of the Rail.
Customer Coalition, a nationwide group of rail shippers.
ACC members report that rail service problems continue to disrupt supply chains and inflate prices for consumers. “These problems will not fix themselves.,” Jahn observed. “Policymakers need to adopt reforms that incentivize railroads to make their networks more resilient and help prevent a future supply chain crisis.”
This year Jahn said his chemical producing and processing members have reported that a Mid-Atlantic facility in the was unable to make 30 shipments to close out the first quarter due to lack of service. In another case, a key production facility in Virginia has frequently received less than two out of three scheduled switches per week.
Council members also report congestion at the New Orleans interchange, with trains being held there for up to two weeks. “When railroads send additional crews and locomotives to clear up congestion in one location, it often creates problems in other areas,” Jahn pointed out.
Unfortunately, many ACC members and other rail customers have no competitive transportation options because of concentration in the industry resulting from mergers. He said that about 75% of his member companies are captive to one Class I railroad with no viable transportation alternatives.
“Policymakers must address one of the central problems undermining the freight rail network and the nation’s supply chain – lack of competition amongst carriers,” Jahn said.
Congress needs to encourage the STB to complete proceedings in a timely manner, he explained. ACC members, along with other shippers in the customer coalition, support the widespread imposition of reciprocal switching, imposed either by the STB or by legislation passed by Congress.
Congress also should establish minimum service delivery standards to enforce the common carrier obligation, he urged, along with reforming the rail demurrage process and forcing railroads to regularly report demurrage income to the STB.
