The industry groundswell attacking the Surface Transportation Board's pending actions on forced access and commodity reregulation has grown to include the railway supply community, including the three principal trade associations (REMSA, RSI and RSSI) and numerous members, and the railway contracting community, led by the NRC.
Congressional leaders John Thune, Chairman, Senate Committee on Commerce, Science and Transportation and Bill Nelson, Ranking Member; and Bill Shuster, Chairman, House Committee on Transportation and Infrastructure, and Peter DeFazio, Ranking Member, have received a letter signed by dozens of suppliers and contractors pointing out the STB’s “recent trend of imposing regulations first, and discovering the consequences later.”
Following is the full text of the letter:
Towson University’s Regional Economic Studies Institute recently quantified the national impact of major freight railroads on the U.S. economy, finding that sizeable industry investments supported 1.5 million jobs, generated $33 billion in taxes and produced $274 billion in economic activity in 2014 alone. Like many economists before, the researchers concluded that the regulatory structure surrounding the industry—set forth by Congressional leadership in passing the Staggers Act—provides certainty and stability and allows the industry to earn the revenues needed to invest and create such positive ripple effects.
As the collective voice of businesses that serve railroads and provide the equipment and technologies to enhance the efficiency and safety of their operations, we know this first hand. Over-involvement of the federal government in the day-to-day business decisions of railroads once pushed this sector and the larger railroad ecosystem of customers and suppliers to the brink of collapse. Without the wisdom to partially deregulate the industry in 1980, America would have lost a privately owned and maintained economic engine that provides quality jobs to support families and communities, affordable and environmentally friendly options for businesses to move goods and critical infrastructure to support passenger railroads.
So it is especially troubling to see the Surface Transportation Board (STB) move forward on reregulatory efforts, including so called “reciprocal switching” and commodity reregulation. The “Rail Customer Coalition” recently wrote you advocating for these misguided proposals and casting them as common sense and in the common interest of the American public. Nothing could be further from the truth, and as a result, we are asking you to ensure the STB regulates as you intended in the 2015 reauthorization.
As leaders on issues pertaining to surface transportation, the railroad supply community asks you to please consider the facts as it relates to the STB and proposed regulations.
Reciprocal switching, or more accurately, forced access, would upend longstanding precedent. It would force railroads to switch traffic to competitors without any suggestion that the incumbent railroad failed to offer competitive services, or has otherwise engaged in any sort of unreasonable behavior. A rash of new switches could possibly advantage a few, but in the aggregate it would strain a 140,000-mile network and degrade services for the majority of customers.
We are deeply concerned that this regulatory effort could greatly cut into capital spending by the railroads. Past analysis by the Association of American Railroads found that a similar proposal could affect an estimated 7.5 million carloads of traffic, placing nearly $8 billion in revenues at risk. Reduced revenues mean reduced money for investment in the rail network and reduced demand for businesses like ours. Continued investments are critical for maintaining a safe and efficient rail network and allow us to provide strong employment opportunities in our communities.
The government dictating what a private business can do with its property and operations is antithetical to the free market and should be soundly rejected by a Congress that has never advised the STB to embark on this path.
A separate commodity regulation would subject five commodity groups to STB economic regulation for the first time in two decades, despite the fact that railroads face strong competition for the service from trucks. The proposal comes without any evidence that the transportation markets are different today than in past decades, and more alarmingly, without petitions from these commodity groups. Such a rule would again signal that the STB views competition through a narrow prism.
The railroad supply community plays an integral role in maintaining the world’s safest, most efficient and highly competitive freight railroad system. We also provide high-paying and high-skilled manufacturing jobs in our communities. We are concerned that the STB has interpreted its reauthorization as a signal that Congress wanted the independent agency to regulate more.
We support a transparent and efficient STB and believe that the agency maintains an important role in maintaining a proven regulatory structure. But we do not support the STB’s recent trend of imposing regulations first, and discovering the consequences later.
We appreciate your continued leadership in setting sensible policies to govern this critical industry that serves U.S. industry and creates local jobs. We ask that you ensure the STB regulates as you intended in the 2015 reauthorization by making your concerns known directly to the STB and we look forward to working with you in the future.
National Railroad Construction and Maintenance Association, Inc. (NRC)
Railway Engineering-Maintenance Suppliers Association, Inc. (REMSA)
Railway Supply Institute (RSI)
Railway Systems Suppliers, Inc. (RSSI)
Railway Tie Association (RTA)
A&K Railroad Materials, Inc.
Amerities Holdings, LLC
Ames Construction, Inc.
Amtrac Railroad Contractors of Maryland, Inc.
Ansaldo STS, A Hitachi Group Company
Arthur N. Ulrich Company
Atlas Company of Lincoln/Judds Brothers
AXIS Track Report
Balfour Beatty Rail
Birmingham Rail & Locomotive Co., Inc.
Boschert Precision Machinery, Inc.
Bowers & Company CPAs
Bullock Construction Inc.
Chester Bross Construction Company
Coleman Heavy Construction, Inc
Commercial Insurance Associates LLC
Design Nine, Inc.
Driven Engineering, Inc.
East Coast Railroad Services, LLC
Edna A. Rice, Executive Recruiter, Inc.
Encore Rail Systems, Inc.
Esco Equipment Service Co.
EVRAZ North America
Fritz-Rumer-Cooke Co., Inc.
Frontier Railroad Services, LLC
Gannett Fleming, Inc.
Genesis Technologies, Inc.
Georgetown Rail Equipment Company
Gross & Jones Co.
Hall Signs, Inc.
Hanson Professional Services, Inc.
Herzog Railroad Services, Inc.
Hudson ROI Equipment, Inc.
Hulcher Services, Inc.
Innovative Parts & Solutions Ltd.
IP Automation, Inc
Johnson’s Frog & Rail Welding, Inc.
L.B. Foster Company
Loram Maintenance of Way, Inc.
Menard’s Railroad Materials
Modern Track Machinery, Inc.
MPL Innovations, Inc.
National Salvage & Service Corporation
Natural Wood Solutions, LLC
Nevada Railroad Materials, Inc.
New York Air Brake, LLC
Ogborn Consulting Group, LLC
Ohio Railroad Association
Omaha Track, Inc.
Omega Industries, Inc.
OMNI Products, Inc.
Outsource Administrators, Inc. (OAI)
Peak Performance Asset Services LLC
Polivka International Company, Inc.
Progress Rail, a Caterpillar Company
R.J. Corman Railroad Group, LLC
Rail Construction Equipment Co.
RailPros Field Services
Railroad Construction Co. of South Jersey, Inc.
Railtech Boutet, Inc.
RCL Services Group, LLC
RedHawk Energy Systems
Reflective Apparel Factory
Rocla Concrete Tie, Inc.
Salco Products, Inc.
Shannon & Wilson, Inc.
Siemens Rail Automation
Simmons Railroad Group, LLC
Site-Specific Solutions, Inc.
Southern National Track Services Inc.
Southern Technologies Corporation
Special Fleet Service
Standard Steel, LLC
The Okonite Company
Thomas McGee, L.C.
Trackside Services, Milwaukee, Wisconsin
Twinco Manufacturing Company, Inc.
US Trackworks, LLC
Wheeler Lumber, LLC
Willamette Valley Company
Wilson & Company, Inc.
WJ Riegel Rail Solutions, LLC