Information published on 28 October 2014 in the UIC electronic newsletter "UIC eNews" Nr 421.

United States, AAR’s Hamberger: Don’t Let Regulation Impede Rail Industry’s Role in Helping Nation’s Economy Rebound

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The President and CEO of the Association of American Railroads (AAR) said on 16 October 2014 that the recovering U.S. economy can ill afford new, restrictive regulations that would stymie private rail investments and curtail growth of the nation’s rail network.

During a speech to the Railway Tie Association in Orlando FL, Edward R. Hamberger said the U.S. rail industry is well-positioned to help the nation’s economy keep growing, but warned that the potential of new government rules and regulation would undercut industry efforts to enlarge the rail network, buy necessary equipment needed to move increased traffic and hire thousands of new employees.

“The fact is that any regulation diminishing the rail industry’s ability to invest in its 140,000-mile network is a regulation that will undermine the industry’s ability to deliver the efficient and reliable service shippers expect and rely on,” said Hamberger. He noted that in addition to constant threat of regulations that would impede progress and growth, several emerging issues are today affecting the overall efficiency of the U.S. rail system.

Surging Traffic
Hamberger said that rail traffic is an indicator of the economy’s overall health and well-being, and that more traffic signals a resurging economy. Today, 15 of the 20 commodity categories tracked by the AAR have seen steady increases in year-over-year carload numbers, including such key categories as grain, energy products and lumber and wood products.

“An uptick in traffic spells great news for the overall economy and shows it’s headed in a positive direction,” Hamberger allowed. “We are finally experiencing the comeback we’ve all been waiting for and much of it is riding on our rails.”

Service Issues
Hamberger also allowed that as the economy has rebounded and traffic volumes surged in 2014, there has been a diminution in the level of service for some customers. That said, he pointed out that railroads are actively working to fix what problems exist today and are committed to restoring service to the levels shippers expect.

“Our active plan for improving service and ensuring that freight rail meets steadily increasing demands revolves around continued massive railroad spending, including investment in new rails, freight cars, locomotives and quality personnel,” said Hamberger, who pointed out that the rail industry invested more than $25 billion in 2013 on private capital expenditures and is projected to spend at least $26 billion in 2014.

Hamberger told the Railway Tie Association that major rail infrastructure investments are needed now more than ever to address existing service issues, as well as plan for capacity expansions required to handle future freight demands. But, he cautioned, for those advocating for more regulations from the Surface Transportation Board, the negative impacts of piling on more federal rules and regulations will constrain the rail industry’s ability to grow and deliver against shipper and consumer expectations.

“The cumulative impact of layers of regulation upon layers of regulation can have a substantial negative impact on service and capacity,” Hamberger said. “We’re caught between the calls for better service and shipper demands for more government regulation.”

“Instead of hampering the rail industry’s ability to grow the nation’s rail network and expand capacity due to the changes brought on by a growing economy, lawmakers and regulators should be applauding the industry’s can-do attitude and commitment. Tying the industry’s hand behind its back is not going to resolve the challenges shippers and rail alike are facing.”

Hamberger also reiterated that the freight railroads are committed to implementing an interoperable nationwide Positive Train Control (PTC) system that will strengthen an already safe rail network. He said railroads have spent almost $5 billion to date and committed massive resources to implementing PTC, but due to the unprecedented technical and operational challenges, the industry will not achieve the 2015 deadline and has asked Congress for an extension.

“The rail industry is committed to boosting both safety and capacity and is today spending more than $2 billion a month upgrading and growing the rail network. We are, indeed, focused on addressing the most acute capacity problems and doing what we must to provide reliable, affordable and efficient service. But for the freight industry to meet demands of our nation’s growing and changing economy, we need to ease the restrictions and regulatory roadblocks that curtail the industry’s ability to relieve service pressures system-wide.”

(Source: AAR)