The House Transportation & Infrastructure Committee, now under Republican Control in the 118th Congress, held its first hearing on Feb. 1, “State of American Infrastructure and Supply Chain Challenges,” hearing testimony from Association of American Railroads (AAR) President and CEO Ian Jefferies, American Trucking Associations (ATA) President and CEO Chris Spear, Hamilton Construction Vice President Jeff Firth (testifying on behalf of the Associated General Contractors of America (AGC), Port of Houston Executive Director Roger Guenther, and Transportation Trades Department, AFL-CIO President Greg Regan.
Chairman Sam Graves (R-Mo.) opened his first T&I hearing by stating that he “did not support IIJA, [but] accepts that it is the law of the land.” He also said that “vulnerabilities within our transportation network were laid bare during the COVID-19 pandemic and were only made worse by stifling regulations.”
“Bananas, Gasoline, Bread, Chicken, Eggs, Potato Chips and Postage”
AAR’s Jefferies focused on the usual themes that have been stressed in numerous Capitol Hill hearings, year after year: an overview of the industry and its economic and environmental benefits; the exemplary safety record; the 1980 Staggers Rail Act; railroads are private companies that invest billions of their own money and pay taxes; the need for “balanced regulation,” etc., etc., but embellished with talk about post-pandemic labor shortages, supply chain disruptions and service problems, and the progress that has been made with recovery efforts. His full written testimony can be downloaded below. Following are excerpts:
“America’s freight railroads are proud of the tremendous role they play in the U.S. economy. The operations and capital investments of America’s major freight railroads support a million or more jobs and several hundred billion dollars in nationwide economic activity, wages, and taxes. Moving freight by rail meaningfully reduces greenhouse gas emissions. In 2021, U.S. freight railroads moved a ton of freight an average of nearly 500 miles per gallon of fuel, making railroads three to four times more fuel efficient than trucks. Safety is the foundation of everything the railroads do, and the past decade has been the safest in rail history. The train accident rate in 2021 was down 30% from 2000; the employee injury rate was down 47% and the grade crossing collision rate was down 23%. … Average rail rates (measured by inflation-adjusted revenue per ton-mile) were 44% lower in 2021 than in 1981. Changes in rail rates over time compare favorably to changes in the prices of things we buy every day (like bread and potato chips).”
“Railroads know rail service over the past year has not been what their customers want or deserve and are fully committed to restoring service to a consistently high level … Over the past two years, railroads, along with virtually every other industry, have found that attracting and retaining enough employees to meet their needs has been a major challenge. The pandemic turned labor markets upside down. When rail traffic collapsed, railroads deployed a long-standing method of temporarily furloughing some employees. As the economy recovered faster than anyone expected, and demand for rail service surged, far fewer furloughed employees chose to return than historical patterns would suggest, leaving railroads without sufficient workforce. We now know that furlough policies must be carefully reviewed to build more resiliency into the system to better ride economic ups and downs.”
“Railroads remain firmly committed to investing in and growing their operations to improve and expand service, as evidenced by the plans announced by many of the railroads to expand capacity (citing BNSF, Union Pacific, Norfolk Southern and CSX capex projects) … Railroads are making these investments because they want to grow with their customers through a safe, fluid and reliable network.”
“Data reported by individual railroads and compiled by the Surface Transportation Board (STB) indicate that railroads are making progress on a variety of key service metrics. A recent STB report stated that railroads are meeting six-month targets for service improvement, with key performance indicators trending in a positive direction.”
“The historic agreements reached in the round [of national collective bargaining in 2022] were based on the recommendations of neutral arbitrators appointed by President Biden and were facilitated directly by senior members of his Administration. These agreements contain a 24% wage increase, the largest compensation increases seen in the industry in approximately 50 years. They also maintain the railroads’ platinum-level healthcare plans, provide additional paid time off for all represented rail workers, and establish a process and timeline for the railroads to work directly with the operating craft unions to make additional work rules changes this year that will enhance predictability and quality of life for those employees who currently have the least predictable schedules.”
“While other Department of Transportation modal agencies are working to support greater automation and the safety benefits that accompany such technology, the Federal Railroad Administration (FRA)—railroads’ prime safety regulator—stands alone in its efforts to lock in yesterday’s regulatory approaches. Congress can support the goal of achieving better outcomes through new technology by ensuring the FRA becomes increasingly forward-looking in how it proposes and promulgates new rules, particularly when innovation can improve safety … [One] example of FRA failing to understand the importance of technology in improving safety is the July 2022 Notice of Proposed Rulemaking (NPRM) that, for all intents and purposes, would mandate two crew members in a locomotive cab. Proponents of a two-person crew mandate for railroads, including current FRA leadership, say it would enhance rail safety. There is no data to support this claim.”
“America’s railroads are healthy precisely because of the regulatory balance that [the 1980 Staggers Rail Act] ushered in. Unfortunately, some rail industry critics want policymakers to re-impose excessive regulations and price controls on railroads. The STB is currently considering several proposals that would do just that. If this happened, the rail industry would not disappear overnight, but over time its physical plant would deteriorate, needed new capacity would not be added, and rail service would become slower, less responsive, and less reliable. Of course, the STB does, and should, play a productive role in adjudicating disputes between shippers and railroads, but excessive government intervention into private activity only risks sending the industry backwards.”
“Railroads are bullish on 2023 and beyond. In the long term, demand for freight transportation will grow as our economy and population grow, and railroads are the most efficient, cost-effective and safest way to meet much of this growing demand.”
Editor’s Commentary: Such hearings—whether they are presided over by Republicans or Democrats—are little more than political theater that accomplishes almost nothing. The AAR most certainly has better things to do with its time than, over and over, present a high school-level primer on railroads to mostly clueless politicians, but I suppose it’s an unavoidable part of the job. I give a lot of credit to Ian Jefferies and the AAR staff for patiently trudging over to the Rayburn House Office Building Theater, statistics and ego-polishing microfiber cloths in hand, when summoned. Maybe it isn’t tiring. Maybe it is. I don’t know, and I don’t expect anyone to say one way or the other, on the record. What I do know is that the important work on Capitol Hill is being carried out behind the scenes, out of the public spotlight, by organizations like the AAR, ASLRRA, RSI, and by career staff at the Federal Railroad Administration, with Congressional staffers who are hopefully better educated on the industry than their bosses. Said one observer: “The T&I Committee’s first organizational meeting opened with the Chairman saying he had no intention of holding marathon hearings—and yet this one lasted four hours and revealed nothing new.”
Perhaps not surprisingly, excerpts from Greg Regan’s as-expected testimony, in which he said that “labor unions, the workers they represent, and even this Administration—which signed the most consequential infrastructure and domestic manufacturing bills in generations—have all been scapegoated … The truth is, since the start of the pandemic, corporations have vacuumed up massive, record-setting profits,” were not included in Graves’ press release summarizing the hearing. Tell me politics as usual aren’t in play here.
By the way, I don’t have a bag of inflation-seasoned potato chips I can munch on after digesting all this. My wife and I don’t keep them in the house. They’re tasty but unhealthy. We do, however, love a generous serving of fresh Italian bread, which would cost a heck of a lot more if the raw materials used to bake it weren’t transported in covered-hopper railcars. – William C. Vantuono