The derailment in Ohio brings this question to mind.
Rail workers call for nationalization. [1] They argue that the private and inadequately regulated industry has “shown itself incapable of doing the job.”
That the Precision Scheduled Railroading model used by corporate railroads is what
s at fault in the system. PSR is a Wall Street-backed model that has taken hold across the U.S. rail industry, gutting workforces and undermining safety in pursuit of more “efficiency” and larger profits for rail carriers and rich investors. Meanwhile, more than 1,000 of the nation’s trains derail every year.
A brief recent railroad history[2]: In 1980, Congress passed the Staggers Rail Act. Among other changes, it lifted the requirement that the ICC approve rate changes, let rail companies close unprofitable lines more easily, and permitted more mergers between firms. The results, the Association of American Railroads argued in The Washington Post, were an unqualified success. In the decades following Staggers, the productivity of freight rail shot up, to the point that one-third of U.S. exports were carried by train, while shipping rates dramatically declined.
But the AAP’s favored interpretation of the data may not tell the whole story. With mergers and consolidations made easier, the number of Class 1 (long-haul) railroads has plummeted since Staggers. The just-in-time operating model favored by the industry helps stock prices and dividends but at the expense of basic maintenance and service necessities. And reducing the number of railroads, and rail workers, has left the system with little flexibility in the event of a crisis.
According to CNBC, the freight rail industry was responsible for transporting a third of U.S. exports in 2022.
Over the objections of unions representing railway workers, rail companies had made dramatic staff cuts since 2017, while increasing the length of operating trains and adopting inflexible business models. While railroads insisted that such changes didn’t represent a threat to safety, rail unions maintained that with fewer staff, a serious accident was only a matter of time.
If profits for U.S. freight rail have been the highest in the world in recent years, the industry’s reputation with its customers is another story.
Rail service can regularly see delays of over three days, and many shippers dependent on rail services only have a single company they can work with. This means that they have no opportunity to negotiate for better rates.
Trucks provide an alternative to trains, and many customers prefer to use trucks to transport their goods. They’re more reliably on time and their parent companies provide better tracking of shipments. But trucking can’t match rail for volume.
But what about shipment by waterways? Even the UP admits that it is the cheapest way to ship goods.[3] Though it is slower.
Shipment by waterway is hindered by the Jones Act passed 100 years ago.[4]
a federal law known as the Jones Act has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. Justified on national security grounds as a means to bolster the U.S. maritime industry, the unsurprising result of this law has been to impose significant costs on the U.S. economy while providing few of the promised benefits.
The above keep shipping costs by water artificially inflated. Thus driving down demand. Reduced demand means that producers build fewer ships and, accordingly, there are fewer employment opportunities for merchant mariners. Meanwhile, artificially inflated waterborne shipping rates increase demand for alternative forms of transportation, including trucking, rail, and pipeline services, raising those modes’ rates and inflating business costs throughout the supply chain. Transportation expenses — incurred to move raw materials and intermediate goods to the next stage in the production process and final product to retailers and end users — comprise a significant portion of the cost of goods sold. Elevated transportation costs affect nearly every business in nearly every industry, rippling through supply chains, squeezing profits, curtailing business investment, disadvantaging U.S. companies relative to their foreign competitors, and depriving U.S. households of savings to spend elsewhere in the economy or to invest.
At a minimum I believe it would make sense to repeal the Jones Act & for our government to impose increased safety regulation upon railroads with inspection by government employees similar to US government inspection of foods to ensure compliance to the rules & regulations. It is apparent that the corporate culture of cost cutting can NOT be trusted with safety.
What think ye?
[1]Rail Workers Urge Nationalization Amid Ohio Disaster
[2]MSN
[3]UP: Pros & Cons of Water Transport: Ship Speed, Shipment Visibility, More
[4] https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear
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