Railroads official: Bipartisan rail reform continues to benefit Savannah and Georgia
This column is written by Ian Jefferies, president and CEO of the Association of American Railroads.
The continued freight boom in Georgia, buoyed by undeniable growth at the Port of Savannah – including a record-setting September – is one of the Peach State’s best economic stories. The ability to get goods to market and support internet commerce is especially important in the coronavirus era.
The Mason Mega Rail project at the Savannah port continues to gain attention for its forward-looking vision, including the fact that it will help make south Georgia a top destination for freight headed to the Midwest.
“The Ports Authority is now thinking even bigger with their rail partners – and with their potential customer base,” says Georgia political commentator Charlie Harper. “Expanded and more efficient rail is key to making this happen. [Longer, more efficient trains will] reduce per unit shipping costs significantly.”
Indeed, freight railroads remain deeply connected to the Savannah and Georgia economies, enabling businesses to safely and efficiently move goods. Everything from retail products bought on store shelves, to food to lumber, generally moves at some point on privately owned freight railroads like CSX and Norfolk Southern. All told, Georgia is home to more than 4,500 miles of freight rail infrastructure and roughly 6,000 rail workers who help who spur immense economic activity – think farmers, logistics companies or auto manufacturers who use railroads to compete. Georgia-based UPS relies heavily on railroads to facilitate their world-class parcel business.
Railroads take trucks off Georgia’s strained interstate highway system in the process.
This American success story, however, hinges on a balanced federal regulatory system enacted on bipartisan grounds 40 years ago. October 14th marks four decades since President Jimmy Carter of Georgia signed the Staggers Rail Act into law. In short, Congress and President Carter largely removed the government from setting rates between railroads and customers. Decades of overregulation and treating railroads like utilities left them unable to earn the revenue needed to reinvest to maintain expensive networks.
Many readers likely remember that U.S. railroads nearly died, and that before the government removed itself from day-to-day business decisions, 20 percent of the nation's railroad miles were operated by bankrupt entities.
“By stripping away needless and costly regulation in favor of marketplace forces wherever possible, this act will help assure a strong and healthy future for our nation's railroads and the men and women who work for them,” said Carter at the time. “It will benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service to shipper needs,” he said.
President Carter was right. Today, railroads are as safe, efficient and reliable as ever, a direct result of being treated the same as other private businesses and competing transportation modes.
Since unleashing market forces, railroads have seen unparalleled gains in safety, private investment, and productivity – all while making rates more affordable. Since passage of the Staggers Act, railroads have invested more than $710 billion in private capital. “These reforms are noteworthy because they produced enormous consumer benefits, there is a strong scholarly consensus about their effects, and they enjoyed significant bipartisan support,” says George Washington University scholar Jerry Ellig.
Indeed, the current system maintains broad support across political fault lines and is essential for railroads to meet future freight demand – expected to rise nearly 40 percent by 2040.
To sustain the freight railroad industry’s role as a crucial piece of the national economy, as well as regional economies, public policies that reflect today’s modern economy and do not prevent the industry from succeeding must remain in place. We hope the anniversary will serve as a good news story about what can happen when policymakers work together.
