Rail Forum Sparks ATA-AAR Debate

NEW YORK -- A conference for Wall Street analysts on railroad finance last week turned into a debate on whether railroads should be forced to provide competitive access to their tracks and other infrastructure.

The debate between American Trucking Associations President Walter B. McCormick Jr. and Association of American Railroads President Edward Hamberger came after a panel discussion in which a shipper advocate and a key federal regulator said railroads need to improve service but that extensive economic re-regulation of the rail industry is not needed.

Stepping up three months of participation in the congressional debate on whether to include new rail regulations in legislation reauthorizing the Surface Transportation Board, McCormick said that allowing trucking companies access to railroad tracks may be the best way to improve railroads' service and profitability. Comparing railroads to the telecommunications industry, McCormick said allowing competitive or "open" access to railroads' privately owned infrastructure would result in increased profits for railroads and better service for shippers.

"Imagine an intermodal service organized not around the need of a railroad to maximize the time and miles spent on the rails, but around the total transportation company's need to offer premium service, reduce costs and maximize profits," McCormick said. "That is the kind of thinking service-oriented trucking would bring to intermodal."

"It's time for railroads' thinking about transportation policy to move into the modern era," McCormick told the June 3 forum on railroad finance. He said that while railroads took advantage of re-regulation that came from the Staggers Rail Act of 1980, the industry's "mindset remains mired in economic regulation."

He said railroads have opposed several attempts by trucking to increase productivity, such as wider use of triple-trailers and increases in maximum truck weights. McCormick told the forum that the railroad tactics won't succeed. "It is a strategy built upon maintaining the remaining vestiges of early 20th-century economic regulation -- regulation that sought to ration freight between modes and between carriers."

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