Supply Chain Optimization

Re-Regulating The Rails

by Tom Moore on Jul 19, 2021 8:00:00 PM

The presidential order is trying to push:

  • Reciprocal switching. This enables competition and decouples a shipper from the railroad whose tracks are next to their building.  In Tom’s opinion = good
  • More Amtrak trains on freight rails. The Presidential order encourages the Surface Transportation Board “to require railroad track owners to provide rights of way to passenger rail and to strengthen their obligations to treat other freight companies fairly.”  In Tom’s opinion = bad
  • More regulation of rates.  In Tom’s opinion = very bad
I remember the “bad old days” were railroads were highly regulated.  Regulation generated rate complexity, under-investment in infrastructure, and poor service.  The Presidential order summary says there are only seven Class I freight railroads compared to 33 four decades ago.  What it fails to point out is that a lot of railroads went bankrupt at that time, and since deregulation (1981),  Rail freight prices have dropped 44%.  (Inconvenient facts are normally omitted)
 
Major US railroads:   Source USDOT
 
 
 
Topics: Supply Chain Load Building Optimization SaaS

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