Joe Biden wants to undo a railroad success

From the 1920s to the 1970s, the US dragged on Venezuela, nearly destroying an industry vital to its economy. An unexpected reform promoted by President Jimmy Carter and bipartisan allies in Congress set the Interstate Commerce Commission on a path to extinction and saved the nation’s freight rail system by mostly controlling it. Not only in Washington but the worldwide rail community sees the Staggers Rail Act of 1980 as the rarest thing ever written by the US Congress, a clear success.

It also left behind a little-known Surface Transportation Board, a little-known agency that is trying to revive regulation by Fiat in the Joe Biden era. The board did not formally consider a proposed merger between Canada National and the US’s Kansas City Southern (rival Canadian Pacific has struck a deal). The board waved vaguely in the direction of “competition” concerns, but many noted a filing by Amtrak complaining that the acquirer, Canadian National, had earned a D+ grade (yes, Amtrak grades). issuances) for its reluctance to be profitable for Amtrak’s unprofitable passenger trains to have freight service disrupted.

Whatever the motive, the board’s action sent a thrill through white-haired advocates who never reconciled themselves in a railroad industry free of Washington control. His new hero is Mr Biden. His sweeping July 9 White House “competition” manifesto set out the rails for the heavy hand. It may not be strictly related, but the statement also called for more favors for Amtrak, thereby burning Biden’s brand as “Amtrak president”, which touches on some strange fetishism for liberals. Area.

Railroading is a complex business. A load can be hauled across the country in hours, then hang around for days or weeks in a transit yard before the next part of its journey. Railroads has recently increased its value to shareholders and customers through something called Precision Scheduled Railroading. Operating efficiencies and profit margins have increased. Fewer workers are needed. Some low-margin customers have also been off-loaded—that is, those who can ship efficiently by truck or whose service is required to maintain less-used spur lines.

On the other hand, some truck-going shipments now go by rail as rail better matches trucks in timeliness and reliability. And so the economy develops under the workings of profit motive.

One thing remains unchanged: Railroads and their biggest customers (such as coal shippers, agricultural processors and chemical plants) are condemned to live in anger because neither can exist without the other. Their ancient feuds were recently reiterated by Philip Longman, a think tanker in the Washington Monthly, who paints today’s freight railroads as outrageous monopolists. He says these companies are run by modern-day “robber barons” who want to shrink the industry “to the point of non-viability” for “short-term economic gain” (this would be news to one of those robbers). Baron, Warren Buffett, who praises his Burlington North Santa Fe as a source of long-term profits).

When this argument doesn’t take him far, Mr. Longman offers an alternative clincher: climate change. Since railroads use less fuel per ton-mile than trucks, railroads must be forced to change their practices and pricing to switch from trucks to rail to subsidize more freight. The blessed result would be a “cooler planet” through a “massive reduction in carbon emissions”.

Echoing this argument has been Biden’s newly installed head of the Surface Transportation Board, Martin Oberman. In a speech he claimed that “123 million tons of global warming CO2 have been pumped into our atmosphere simply because railroads chose not to retain their market share compared to trucks (emphasis added).

The wording is slippery. Railroads and their customers both choose to maximize their efficiency and profitability. M/s Oberman and Longman also fail to mention that any emission reduction would be limitless with respect to the atmosphere. His is another climate “solution” designed to fool the media and the public with no real perception of the quantity involved or about the impossibility of American actions to influence the weather.

Climate change is indeed a complex puzzle. Many religions produce charlatans who resort to a simple message of “give me your money”. Asking can be today’s legacy.