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Modernizing Freight Rail Regulation
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Congress called on the U.S. Department of Transportation (USDOT) to sponsor this study of the U.S. freight railroad industry’s economic regulation, including its purpose and performance in ensuring that railroads can earn enough revenue to continue to operate and invest and that rail shippers can obtain adequate service at reasonable rates.1 The study charge specifically calls for recommendations on the future role of the Surface Transportation Board (STB) in overseeing and reg- ulating the service levels and rate offerings of railroads, particularly as they become revenue adequate. STB was established in 1995 to succeed the Interstate Commerce Commission (ICC), which had been responsible for administering the federal railroad regulatory program when the Staggers Rail Act of 1980 substantially eased or eliminated many long-standing regulations on railroad pricing and operations. To the detriment of freight shippers, these regulations hindered the ability of the private railroads to earn enough revenues to invest, innovate, and become efficient. Implemen- tation of the act’s reforms was quickly followed by the restructuring and revitalization of the freight railroads, which shed large amounts of excess, uneconomic capacity; substantially increased their produc- tivity; and introduced innovations that conferred large benefits on shippers in the form of improved service offerings and lower rates. By the late 1990s, the Staggers Rail Act had succeeded in spurring the development of a modern and more efficient railroad industry that was better able to compete with trucks, maintain and expand capacity, and respond flexibly to shippers’ needs with less regulatory oversight and control.
978-0-309-36906-0
NONE
Management
English
2015
1-279
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