Wednesday, June 23, 2010

AAR CEO letter counters rail re-regulation claims

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The effort by some shippers to re-regulate freight railroads relies on citing selective rail rates that “don’t tell the entire story,” according to a letter by Association of American Railroads CEO Edward R. Hamberger, which appeared in Wednesday’s Wall Street Journal.

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“Average rail rates in 2009 were 55% lower than in 1981. That means the average rail shipper can move twice the freight today for the same price it paid nearly 30 years ago. America’s competitive rail rates also stack up pretty well against the rest of the world,” said Hamberger (pictured at left).

“While rail rates in recent years increased in line with railroad costs and the need to reinvest in the nation’s rail infrastructure, these increases pale in comparison with price increases farmers have seen in other areas, such fertilizer costs, which are up 304%, fuel costs, up 244%, and seed costs, up 154%,” the CEO said.

“Without railroads bringing America’s high-quality, competitively priced grain to the global market, we’ll never achieve the president’s goal of doubling exports on the road to economic recovery,” Hamberger concluded.