Wednesday, May 27, 2009

UP's Jim Young to lawmakers: Why tamper with success?

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Union Pacific Chairman, President, and CEO Jim Young urged Congress Wednesday to be very careful about changing the Staggers Rail Act of 1980.

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Since enactment of Staggers, Young said, inflation-adjusted rail rates have dropped by more than half, railroads have reduced accident rates by 70%, rail market share has steadily increased, and the industry has poured $440 billion back into track, equipment, and facilities improvements.

Young, who is also chairman of the Association of American Railroads, made these points in a speech at the annual meeting of the North American Rail Shippers Association in Chicago.

Aware that some big rail customers in his audience were supporting legislation now in Congress that would dilute Staggers regulatory reforms, Young said the Staggers system had succeeded in its goal of protecting "the rights of shippers from excessive rail market power while at the same time providing railroads with new ability to react to changes in the marketplace."

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"The result has been an unqualified success," asserted Young.

He contended that the antitrust legislation now in Congress "would subject railroads to conflicting regulatory schemes, creating inefficiencies that would cause operating costs to increase. Eventually these cost increases would reach each of our customers, causing their costs to increase as well."

As for the high speed passenger rail systems contemplated by the Obama Administration, Young said "there are many good things" they could accomplish, "including reduction of greenhouse gases and fuel consumption as well as highway and air congestion."

But he had a caveat. “If all we do is superimpose high speed rail on existing freight networks, it will consume freight capacity needed for freight customes today and limit our ability to expand for the customer's growth in the future."