Freight Rail wants smarter, greener and safer shipping. Its regulators have other ideas.

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Port slowdowns and empty store shelves prompted policymakers to investigate supply chains and shipping networks in a recent audience of the House Transportation and Infrastructure Committee. A witness from the Massachusetts Institute of Technology Center for Transportation and Logistics blame Chronic underutilization of truck drivers and suboptimal loading / unloading policies in warehouses. Another from the transport intermediary industry noted it is a perfect storm of factors, including shortages of labor, chips, warehouse and container storage, combined with a historically magnified demand for freight globally. Ian Jefferies of the Association of American Railways detailed how pandemic-induced changes in consumer spending and retail inventories can disrupt freight patterns.

This global shipping industry is very diverse, including rail freight, air freight, ocean shipping, trucking, logistics providers, and increasingly, proprietary shipping solutions from retailers like Amazon Prime who ordered its own fleet of 100,000 custom-made electric and ergonomic vans from Rivien because he wants to improve delivery via FedEx, UPS and the post.

The key questions are whether regulation can improve the status quo (and for whom) and to what extent can suppliers have the flexibility to adapt to difficult market conditions. In addition, it is difficult to discern costs and energy efficiency due to regulatory distortions. For example, trucking can reduce an attractive price for the shipper because the costs of highway subsidies and greenhouse gas emissions are borne by Americans as a whole.

In the last century, rail freight focused on delivering coal, but today represents a huge one third of the American ton miles delivery of all kinds of consumer goods and industrial inputs. Freight rail operators invest some $ 25 billion a year to modernize networks and improve safety, volume, speed and energy efficiency. It is not surprising that the privately funded freight rail industry invests so much; if they weren’t, trucking would put them out of business. More broadly, trucking is fighting to be green and autonomous and to achieve greater profitability through reductions in energy and labor costs. Clifford Winston, Brookings Institution Transport Policy Expert argues that trucking will play a huge role in the future of freight movement. However, rail freight continues to emerge as the greenest shipping option, a combination of volume shipped over a distance for a given amount of energy. He is four to five times more effective in energy used per mile compared to trucks.

On the contrary, many witnesses stressed the need for flexibility to adapt to changing conditions. Investments in technology can make networks greener and more secure and provide the efficiency needed to better withstand supply chain shocks in the future. Work too could be more flexible, both by making it easier to improve workers’ skills and reducing the use of humans for repetitive tasks, which are better served by computers. Rather than encouraging transport networks to make these long-term improvements, it appears that regulators want to do the opposite by setting prices, imposing labor levels and controlling traffic flows, such as envisions the Surface Transportation Board (STB) with a new set of rules early 2022.

Forced switching

The United States already has more rail freight miles than any other country, some 140,000. The green approach is to minimize new tracks and make existing lines as efficient as possible by stacking intermodal containers in double, adding longer trains and optimizing shipping schedules. Often referred to as “Precision Scheduled Railroading” or PSR, observers like Forbes contributor Ike Brannon see the search for efficiency as the key to the growth of rail transport, which in turn can contribute to the greening of the economy.

However, shippers do not necessarily have the climate in mind when building a facility. They expect the rails to reach them and want a shipping price that is as close to free as possible. It may be a good deal for any shipper, but it is not financially viable for the railroad if policymakers expect continuous improvements in rail networks. While it is understandable that a business wants to ensure low shipping rates, voters in a country want to see a continuously improving transmission and distribution infrastructure in terms of safety and energy efficiency.

Interstate Commerce Commission downsizing of 19e Century, the STB was chartered to regulate the transport of coal. To stay relevant, the STB needs a new constituency. The U.S. chemical trade associations, the American Chemistry Council and the National Association of Chemical Distributors, were happy to step in and ask the STB to set shipping prices at a level unattainable in within the framework of fair and transparent negotiation, as suggested by a forthcoming procedure. The STB does not act to ensure the well-being of consumers or to improve the environment, it helps senders to travel for free. David Henderson offers a useful overview of the history of railroad regulation, its deregulation in the 1980s, and subsequent efforts to re-regulate it today. Sadly, it seems Democrats have forgotten the significant political success of the Staggers Act which laid the foundations for competition and fuel efficiency in rail.

Forced labor

A similar parody against consumers is underway at the Federal Railroad Administration by allowing critical rail safety programs to expire. A recent letter from 23 senators to Deputy Director Amit Bose calls on the FRA “to expand the use of Automated Lane Inspection (ATI) technology, which currently operates by override and through testing programs.” “The data-driven fusion of ATI and visual inspections produces a superior safety result, with track employee hours being reallocated to checking and resolving the highest number of faults detected by ATI rather than perform redundant visual inspections, “the senators wrote. The FRA has allowed several of these ATI programs to expire in recent months, refusing even to extend one, as it said the agency did not expect any new data to come out. “If this delay is due to FRA’s satisfaction with the ATI data collected to date, please indicate what next steps FRA is considering to enable further use of this security technology,” they wrote. There is nothing more the FRA needs to do to reset the expiration date.

Investments in safety are the foundation of all transportation networks, and all over the world, passenger and freight trains are automating themselves due to superior safety performance. Rob Atkinson, ITIF’s Leading Innovation Expert describe “Enabling technologies, such as sensors, communications networks, actuators and software (including AI)” that reduce carbon emissions, increase productivity. He observes,

“Continued technological innovation in the freight rail industry is essential to improving living standards in the United States by helping to reduce freight costs. But regulators should avoid putting up roadblocks. Policy makers should favor regulations that encourage innovation, facilitate the deployment of automated systems and adapt to dynamic technological changes. ”

Like the STB, the FRA has found new constituencies in major railway unions like the Brotherhood Of Locomotive Engineers and Trainmen (BLET) and the SMART Transportation Division (SMART-TD), which seem to have no qualms about delaying the future. safer navigation. By definition, operations cannot be autonomous if they are conducted by humans. The House hearing highlighted labor shortages in many parts of the supply chain. Additional regulatory requirements will only exacerbate this problem just when employers and staff need flexibility to adapt.

However, there are constructive ways to ensure the career of railway workers, in particular by upgrading their skills. While manual labor is not justified in the train cabin, much is needed to manage the computer systems that operate trains. Indeed, rail freight is faced with a shortage candidates for information technology positions. Safety also encompasses the digital realm, and the freight rail industry has proposed a a comprehensive approach for working with US cyber authorities to deter cyber intrusions. In any event, if the freight industry is allowed to meet growing consumer demand for freight, it will add more trains and freight. And with that, more jobs.


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