In the offices of a small federal agency a stone's throw from the U.S. Capitol, regulators are considering rules that could ripple throughout the economy and undermine important national policies.
The U.S. Surface Transportation Board (STB) is weighing whether to cap freight railroad revenue, which could result in far less investment in the privately owned and maintained national freight rail system.
These private, and not taxpayer funded investments in things such as new track, technology, locomotives and equipment have helped power not only the freight rail industry, but also our economy and many of our nation's strategic goals. Here specifically is what is in danger should the STB cap the revenue that railroads can earn by misapplying the concept of "revenue adequacy":
- The policy of improving the capacity, efficiency and productivity of freight railroads overall: Less money to invest means that railroads will have to make hard choices. They will not be able to invest in building capacity in as many locales as shippers demand, which could result in less reliable service. Demand for freight rail will only increase. That's because the U.S. population is projected to grow by 70 million by 2035, generating 2.8 billion more tons of freight, a 22 percent increase.
The common theme in meeting these bipartisan policy goals is adequate revenue to maintain and expand the 140,000 mile rail network. A direct correlation exists between what the STB decides concerning revenue adequacy and whether freight railroads will in fact have the necessary resources and, ultimately, whether these policy goals will be achieved.