Staggers Act - A Revisit

While Rep Harley Staggers (D-MD2) is often noted as the first Member of Congress to blatantly "politicize" the Amtrak route map with his "insistence" upon establishing a useless Wash-Parkersburg route, how many of those critics realize how he saved the railroad industry, with his "shepherding" of the Deregulation Act through two Houses and then to President Carter, bearing his name.

I think, with our economy facing its greatest assault in modern times, the Wall Street Journal has offered an Editorial noting the significance of this Act to the economy as a whole:

https://www.wsj.com/articles/when-democ ... 1602628514

Fair Use:

The term “deregulation” has become polarized in Washington. But there was a time when both parties could agree on the benefit of targeted regulatory reform.

The bipartisan Staggers Rail Act of 1980, passed by a Democratic Congress and signed by President Jimmy Carter, deregulated the freight railroad industry. When Mr. Carter signed the law on Oct. 14, he said that “by stripping away needless and costly regulation in favor of marketplace forces wherever possible, this act will . . . benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service to shipper needs.”

Of course, some group of railroad shippers has to feel aggrieved:

https://www.wsj.com/articles/make-u-s-r ... 1603227267

Fair Use:

In “When Democrats Were Deregulators” (op-ed, Oct. 14), Association of American Railroads CEO Ian Jefferies praises the Staggers Rail Act for leading to “targeted deregulation.” Unfortunately for the businesses that rely on freight rail, the term “targeted” is code for preserving certain outdated regulatory policies that favor and protect the railroads from truly competing in the marketplace.

There is no doubt that the Staggers Act helped save the nation’s rail network from collapse. But more work is needed to realize the landmark law’s vision of a competitive rail industry.

"We report, you decide"

The article is making a political statement about deregulation. I don’t think it should be one. The real issue is about the railways efficiently delivering their service, which is transportation. Under PSR, I feel that they aren’t doing a very good job at it, unless a customer has multiple unit trains worth of freight to ship.

PSR really has nothing to do with the Staggers Act. No regulation prior to Staggers would have prevented a railroad from implementing PSR if it wanted to; in fact, the IC (pre-ICG, I think) did something like that, without necessarily running longer trains. Prior to Staggers railroads changed train lengths all the time according to various operating theories favored by various managements at various times. What Staggers did was enable railroads to align freight rates with costs as the floor and competitors' rates as the ceiling, raising and lowering them as necessary without having to make -- literally -- a Federal case out of it before the ICC. It also enabled railroads to consolidate interchange points without going through the lengthy litigation necessary under ICC regulation.

Actually, I'm inclined to think that one result of Staggers was to make the railroads profitable enough to interest Wall Street, leading to an unhealthy preoccupation with operating ratio above all else; prior to Staggers nobody bought a railroad to make money.

Rush Loving's (author of "The Men Who Loved Trains") article in December TRAINS regarding "Dereg" is definitely on my "must read", as distinct from "scan", list.

Engineer Spike wrote: ↑Wed Nov 04, 2020 2:42 pm The article is making a political statement about deregulation.

Spike, the cited material is OPINION. Sorry if I did not make that adequately clear when presenting such.

ExCon90 wrote: ↑Wed Nov 04, 2020 9:53 pm Actually, I'm inclined to think that one result of Staggers was to make the railroads profitable enough to interest Wall Street, leading to an unhealthy preoccupation with operating ratio above all else; prior to Staggers nobody bought a railroad to make money.

That was the problem, no? Pre-Staggers Railroad management in so many cases (Pennsylvania, SP, Rock Island, Milwaukee, etc etc) correctly concluded that railroading could not make a commercial rate of return on investment, but that given that its assets were durable and cashflow substantial, it could be operated as a depreciation-engine that spit off cash that could be invested into sectors of the economy that actually did make more money like insurance or telecoms or movie theatres or real estate until the wheels fell off (literally).

Creating a regulatory environment where the sensible business choice was to run your operation into the ground was really bad!

While one of the Surfboard's missions is to afford shippers a means of redress against any surface carrier, what this Journal article reports could be construed as a first step towards rereg.

Fair Use:

WASHINGTON—Federal regulators moved Friday to make it easier for farmers, chemical companies and other shippers to get government intervention when freight railroad service is delayed, in a bid to resolve supply chain woes in the rail industry.

The Surface Transportation Board, which primarily regulates freight railroads, voted unanimously Friday to propose an update of its emergency service rules, which enable the STB to compel railroads to respond when shippers say they aren’t receiving sufficient and timely service.

"Dereg" has been the industry's salvation, transforming it from an industry in which one third of the mileage was operating under Bankruptcy protection. "I was there" during those "Dark Ages".

I'm well aware that the industry serves an "oligopsony" of shippers that are totally dependent upon railroad transportation. As such, they need an agency to redress their grievances. But to have this redress return to "rereg", there goes our viable industry.

Welcome back 1887.

Mr. Norman,
Let's hope that the choice isn't simply 1887 or Staggers, but something where current shipper and customer complaints about service can be redressed. 1887 was necessary then because of truly rapacious behaviors by RR tycoons--overbuilding, stock watering, rates that were immiserting farmers, etc. None of these were problems 50 years later at peak RR in the USA. New problems emerged and Staggers eventually solved them. 35 years later, customers seem to be complaining about RR practices that benefit only the RRs, like PSR and other lower operating-ratio (and capex! and labor costs!) schemes.
So now, some new rereg may happen (but unlikely with a Republican Congress?). As it is, the nation's Surfboard is already highly regulating the RR business by limiting mergers. As has been noted here and elsewhere, KCS and CP are the last Class I mergers we're likely to see, and the attention given to Chessie wanting Timmy's fancy feast (if I may borrow your trademarked images!) shows a nearly locked-in regulatory environment for RRs at present and going forward.

Mr. HRSN, I sincerely respect the maturity of both your immediate and those you.have made at the CSX takeover of PAR topic.

Now addressing the instant, we are confronted with roads buying into "The Gospel According to Saint Elwood" against shippers who hold they are aggrieved by such.

Unwind by regulatory fiat, "Saint Elwood's" operating practices and risk a return to the "Dark Ages" when I was in the industry (70-81) or continue to have such attracting investor capital?

I'd really enjoy seeing mature discussion here if the industry should unwind "The Gospel..." in order to provide better service to these aggrieved shippers, or if present practices are favorable to the bottom line, which should prevail?

disclaimer: author long UNP; Mar 31 a "substantial" S&P "outperform".

Let's see the supply chain impacts with more government regulation, because they clearly have so many successes to point at....... right up there wth "French Military Victories"....

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eolesen wrote: ↑Sun Apr 24, 2022 4:54 pm Let's see the supply chain impacts with more government regulation, because they clearly have so many successes to point at....... right up there wth "French Military Victories"....

Which French military victories do you mean. The Battle of Hanau, Battle of Lutzen, or the Battle of Bautzen, perhaps.

I have been following the circus around the present meeting between the class 1 CEOs and STB. One point which was brought up was the use of 14000' trains instead of 7000'. The railroad cried about how were they supposed to do it with a manpower shortage, and why can't single person crews be used, if reverting back to 7000 footers. My opinion is that the railroads are seeking to further reduce train crew size by using the excuse of manpower shortage. The rub is the fact that the crew shortage has been manufactured. I have seen rules implemented which serve no real safety benefit, they just are designed to make crews' lives as miserable as possible.

This may very well open the door for further reduced crews. One problem is that the main solid employee base is guys like me who have too much time invested to leave. Maybe this is the plan, and the ultimate goal is a crew size of 0. The problem is that in the interim until this can bleed implemented, there is a logistical meltdown, and many angry customers. zit seems as though the industry tried to make too man radical changes too fast.

Maybe this is the plan, and the ultimate goal is a crew size of 0.

The "autonomous trucks" enthusiasts might well be thinking of trying things on existing fixed guideway infrastructure. After all, there are those airport people movers, right? Once a knuckle breaks, a hose parts, or some other emergency goes down, then the downsides of crew size 0 will become apparent to them.

Mr. HRSN, a "1:1 Lionel" is unimaginable, in the Yard, that's one thing; on the Road, altogether different.

What if a "Lionel" on the UP decided "that's all folks" at Granger WY - that's where the Overland and OSL con/diverge. Nearest "human assistance" is either at Green River or Ogden - 60 miles, or an hour, over the highway for either. Now time to locate and address whatever happened. Result, the major East-West road tied up for probably five hours.

It's unthinkable. Let's think back to when Amtrak decided to make their LD trains into "Mixto Diarios".. Think of all the delays occurring when a two man TRAIN Crew had to walk the train, find the, say, parted air hose, and fix something they really were not qualified to do.

Let's hope our Moderator allows this to continue; it appears we have diverged from a regulatory matter to crew consist.