Zakee Bashir, Guest Columnist
Zakee Bashir is manager of the Columbus Region Logistics Council.
After all, easy access to air, road, waterway, and rail is good for doing business. We see this in central Ohio, which is one of the best places in the U.S. for basing a logistics or industrial operation.
And a standout among infrastructure modes for their private investment in the region is our freight railroads.
Ohio in total has 41 railroads that support manufacturing, agriculture, natural resource development, and international trade. Here in Greater Columbus we have a robust set of rail connections including two Class I and several short-line and regional railroads.
So while the infrastructure news is good in Ohio, with our state and local leaders poising us for success as the CNBC rankings demonstrate, a bill in Congress being accelerated for September consideration could throw a wrench in the railways.
The misleadingly titled “Freight Rail Shipping Fair Market Act” is likely to come up for a vote in the House Transportation and Infrastructure Committee.
It would mean a wholesale change for the economic regulation of railroads, inserting the government into the daily operations of a railroad, from routing to rate interference.
“The proposed bill is a solution in search of a problem. Even the top regulator at the board that oversees rail economic policy has said more supervision from his body would not actually help railroads meet current challenges, from supply chain slowdowns to hiring” Zakee Bashir
It’s misleading and misguided because it would make it harder for railroads to compete and earn business from competitors in other modes that don’t face similar constraints. Railroads that can’t compete also can’t earn enough revenue to keep investing at high levels into the rail infrastructure that has helped put our region on the logistics map.
For reference, these rail companies are reinvesting into their networks at about six times the rate of the average manufacturer—over $20 billion every year collectively. Private dollars not only save taxpayers money, they mean businesses have efficient and reliable shipping options for reaching Cleveland or China. They help consumers by keeping transportation costs down. They mean fewer emissions from freight transport.
U.S. freight railroads today — the best in the world as measured by cost and productivity — got a boost from smart, bipartisan deregulatory policy that shaped them in 1980. It freed them to operate like other businesses in a market-based system, casting aside many of the government controls that had left rail infrastructure in near ruins.
The proposed bill is a solution in search of a problem. Even the top regulator at the board that oversees rail economic policy has said more supervision from his body would not actually help railroads meet current challenges, from supply chain slowdowns to hiring.
If anything, railroads need practical ideas for meeting the needs of today’s supply chain, like a bill proposed by U.S. Rep. Troy Balderson to reduce bureaucratic barriers to rail hiring.
Rather than looking backward to a failed regulatory policy — as represented by this new “Fair Market” bill — our policymakers in Congress should look at the real impact in our communities. If Ohio railroads are compelled to invest less, our manufacturers and producers suffer, not to mention the logistics industry that powers central Ohio. Consumers suffer from higher costs, already being driven up by inflation.
Instead, Congress should look to the future, and the role we will need freight rail to play, working with other modes, in meeting rising demand. They can support railroads simply by getting out of the way and letting them meet tomorrow’s challenges.