Trump Should Stop Reregulation of Freight Rail

By Stephen Moore and Jon Decker

Excerpt from CNS News:

Unfortunately, this successful regulatory restraint is now being put to the test as Donald Trump’s own agencies flirt with new and highly unfair rules overseeing rail practices. The biggest threat the rail industry faces comes from a Surface Transportation Board proposal known as the “forced switching” rule. The forced switching rule would force rail operators to turn over their freight cars to competitors at potentially below-market prices.

This rule change is an assault on the rail companies’ private property rights. Having them share their freight cars with competitors would be like requiring FedEx to deliver packages for UPS.

This price control scheme would be similar in nature to net neutrality, wherein broadband carriers are prohibited from charging more money to companies that use the most of their bandwidth or “lanes.” Why should someone be forced to carry another person’s goods through their channels without receiving proper compensation?

If enacted, the forced switching rule would severely restrict rail carriers’ freedom to negotiate their own contracts — even though this freedom was what made the industry so successful in building its network and lowering costs for consumers in the first place. Any cost-savings in the short term would be offset by less capital investment in rail as these rules create literal “free riders.”

To add insult to injury, some in Congress want to do the biddings of the unions and require mandatory crew sizes on rail cars. This would come at a time when increasing automation is reducing work crews for rail delivery and lowering transportation costs. Does anyone really believe that locking in a specific rail crew size today will be appropriate two, five or 10 years from now? Locking in a set number of workers on a rail line makes as much sense as locking in a set number of workers at a McDonald’s restaurant.

Photo Credit: Kabelleger / David Gubler (https://www.bahnbilder.ch)

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