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CEI-Led Coalition Urges Congress to Defend Railroad Deregulation

Today, a coalition of free market groups led by CEI sent letters to Senate Commerce Committee and House Transportation and Infrastructure Committee leaders urging them to defend railroad deregulation against the attempts of the Surface Transportation Board (STB) to impose forced reciprocal switching on U.S. rail carriers.

Reciprocal switching refers to an arrangement whereby two railroads interchange on another’s traffic for a fee. This occurs voluntarily across the country. But the STB is now seeking to make it easier to force railroads into these arrangements by eliminating the decades-old anticompetitive conduct requirement, which requires that shippers present evidence of anticompetitive behavior in order for the STB to force railroads into reciprocal switching arrangements.

The STB has ludicrously attempted to support its proposed elimination of the anticompetitive conduct requirement by noting that there has been no evidence of anticompetitive behavior for decades, so it must therefore make it easier to wield this authority. So, for the nation’s railroad economic regulator, carriers are damned if they do, damned if they don’t.

Railroad deregulation represents one of the greatest American economic liberalization success stories. Since the Staggers Rail Act of 1980 freed a dying industry from government-imposed ruin, U.S. freight railroads have become the envy of the world. In the last 35 years, rail carriers have invested more than half a trillion dollars into their networks and inflation-adjusted freight rates have fallen by nearly half.

The STB’s recent actions threaten this rail renaissance and Congress must exercise its oversight authority and push back against the agency. Failure to do so would be putting the railroad industry—and its customers and consumers—on the same dangerous path that nearly brought it to ruin in the 1970s.

For more on forced reciprocal switching, see: