• Biden Railroad Executive Order

  • For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.
For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

Moderator: Jeff Smith

  by Shortline614
From Trains Magazine:
WASHINGTON — The Biden administration wants U.S. regulatory agencies to address consolidation and what it considers to be anti-competitive pricing by railroads and ocean shipping firms, the Wall Street Journal reports in a paywalled article.
https://www.trains.com/trn/news-reviews ... ndustries/
https://www.wsj.com/articles/biden-to-t ... 01?mod=mhp

This week an executive order will be issued that will direct the STB to address "aggressive" pricing by the seven Class I railroads, citing the consolidated nature of the railroad industry as the primary reason. Interestingly it will also allow shippers to create low-cost routes using multiple railroads. Perhaps we could see a limited return of the pre-Staggers bridge roads It will also ask the STB to move forward on implementing nationwide reciprocal switching, something that Canada has had for a few decades now.

As for my thoughts. You need to strike a balance between competition and efficiency. Something that I believe the STB has done for the most part since its foundation (UP-SP I believe being one major exception). In the pre-Staggers era, competition and fairness were the two driving forces behind regulation. Now, it is competition and efficiency. Perhaps this is an attempt to go back to the "competition and fairness" of the pre-Staggers world, or perhaps these limited measures will actually fulfill their stated purpose of expanding competition. I guess we will just have to wait for the order itself to find out. I suspect the former not the latter.

If I were a Class I railroad that is currently seeking a merger of its own (CP, CN, CSX) I would oppose with all the gusto my legal department could muster. If I were shortline or regional railroad, the prospect of overhead traffic that such a change in regulation might bring would push me to support such a change. It should be noted that bridge lines are only well-off enterprises if a part of a larger system. Look at the success that the Cotton Belt had under Southern Pacific compared to a "stand-alone" bridge line like the Deleware & Hudson. Most shortlines nowadays are under holding companies which can take a big economic hit much better than an independent shortline can; however, the prospect of many shortlines fortunes becoming even more dependent on the whim of their largest connection does not sit well with me. It has the possibility of making an already volatile shortline market worse.

As for reciprocal switching, I would not oppose such a move. Canada has had it in a limited capacity for a few decades at this point and it does not seem to be the "world ender" that the American Class Is make it out to be. In this case, the expanded competition might be good for railroads as it would push their marketing departments into learning how to retain customers better since it would be easier for them to lose to other railroads. I also would not be opposed to granting second railroad access to a region where the first one has a monopoly. If the STB forced CSX to give NS trackage rights to Nashville or the West Coast of Florida, I would not be opposed to such a move.

(Edited to include more of my thoughts.)
  by Gilbert B Norman
Wait until you read this Journal editorial appearing today:

https://www.wsj.com/articles/joe-biden- ... 1625869633

"Amtrak Joe" is apparently taking dead aim at railroads; are we back to rober baron days? (no further political comments) .

Fair Use:
Consider railroads. Government regulation of railroad rates was among the great failures of the 20th century. It reduced private investment and service and drove many carriers into bankruptcy. Congress abandoned it in 1980, but Mr. Biden wants to revive it. His order summary says there are only seven Class I freight railroads compared to 33 four decades ago. Yet freight prices have dropped 44% since 1981. Mr. Biden wants to force railroads to hand over freight traffic to competitors, which would reduce private investment and shipping efficiencies.
  by Red Wing
I guess the WSJ hasn't heard of PSR and the lack of private investment associated with that?