Prior to 1980, our nation’s rail infrastructure was crumbling. Federal bureaucrats decided everything from the services railroads could offer to the rates they could charge. Railroads could not afford even basic maintenance. Tracks were collapsing, rail rates were rising faster than inflation, and rail market share shriveled as more and more shippers turned to trucks – putting more trucks on the road.
In 1980, facing a crisis, Congress passed the Staggers Rail Act, creating a reasonable regulatory system that still exists today: shippers are protected, while railroads can manage their operations on free market principles like other businesses.
Thanks to today’s regulation, rail is more affordable and shippers can move more freight, saving American consumers hundreds of billions of dollars each year. Trucks are now among rail’s best customers—12 million trailers and containers travel by rail, instead of over the road each year. Railroads have invested more than $480 billion from 1980-2008 to maintain and renew the tracks – more than 40 cents of every revenue dollar.
Preserving reasonable regulation of railroads is key to building the infrastructure that the nation needs to grow. The U.S. Department of Transportation estimated that American freight transportation demand would increase 92 percent between 2002 and 2035. Over-regulation would prevent railroads from building the new systems that our economy needs to grow. If railroads cannot expand, one-third of all key freight rail corridors will be at or over capacity within 25 years. That’s a risk our economy can’t afford.