As a small boy, one of my favorite stories was my Uncle Curt’s tale about a hostler buddy of his who had ended his railroad career by putting most of a 4-8-2 Mountain type steam locomotive into the turntable pit in Tulsa. Uncle Curt would wave his arms over his head and repeat his friend’s last frantic words as a railroader. They were, “Woah, big engine!” Throughout my life, I’ve used those words over and over, when something seems out of control.
In that light, when I read Bill Huneke’s commentary suggesting that the Surface Transportation Board (STB) has, perhaps, outlived its economic usefulness and might be a candidate for elimination, the first words out of my mouth were … you guessed it, “Woah, big engine!” Bill is a gifted economist with decades of hand-to-hand regulatory experience, so he would not have let slip what he did without careful thought. Just the same, his remarks felt scary to me (or, at least, premature). Perhaps, before we let anyone casually nose the STB into the policy pit in Washington, we should more fully figure out what we want and need from freight policies going forward.
Factually, everything that Bill observes seems correct. As currently enabled, the STB’s principal functions are to protect captive shippers through rate oversight, to evaluate and rule on large rail industry transactions like mergers, and to referee the endless disputes between passenger rail providers, local public entities and the freight railroads. Additionally, the Board is left to tidy up a variety of lesser administrative tasks mandated under the current regulatory regime.
To offer a crude summary of what Bill is saying, it is the following: Coal has been the primary source of captive shipper complaints and coal is going away. To boot, the STB has been kind of clumsy and ineffective in its treatment of rates anyway. Mergers? Well, there won’t likely be many more of those, and the Department of Justice seems more than capable of policing future rail industry transactions. Finally, Bill doesn’t mention the STB’s role in facilitating passenger services, but the growing physical separation between passenger and freight rail infrastructure and operations would suggest that conflicts in that arena are not forever problems.
Indeed, if the STB’s future role is simply to be what it has evolved to become over the past 30 years, then Bill Huneke may be right. But the policy world is like a precariously balanced Jenga tower. Before we remove pieces—even small ones—we need to understand our policy needs going forward and how rearranging the currently available pieces can contribute to creating that future or, alternatively, topple it.
Luckily, we needn’t fully agree on specific future freight goals to evaluate the desirability of potential regulatory changes. For this purpose, a representative set of largely benign target outcomes is sufficient. An example list of these outcomes might include a future where:
- Competitive processes further replace hands-on regulatory oversight in the daily governance of both intermodal and intramodal freight commerce.
- Private sector investment is the rule and public sector spending is the exception.
- The freight environment seeds and nurtures technological advances—things we can, right now, scarcely imagine.
- A suite of domestic freight facilities, equipment and practices mesh seamlessly with commerce throughout the world. The current pushbacks against global trade are modest policy adjustments, not a wholesale change in long-run course.
Do we need anything like the STB to accomplish these goals, and if so, how might a forward-looking STB be configured and armed? I don’t know. However, what seems unarguable is that attaining the outcomes we want will require indefatigable vigilance and a clear avenue for policy action if things go awry. Freight is too important to the American economy to be left to chance, and I question whether this vigilance can be attained by eliminating the STB and parsing out its responsibilities to other federal agencies. Finally, the notion that streamlining vigilance will decrease or even eliminate the need for carrier reporting, good data and strong analytical tools is simply wrong. On the contrary, a regulatory hand with a lighter touch must be better informed, not less so.
To be sure, we owe Bill Huneke our thanks for publicly pointing out the elephant in the policy room. ‘Tis the season for such discussions, and freight transport is not (nor should it be) immune. Still, I am left to say, “Whoa, big engine!” There’s much to talk about.
Dr. Mark Burton is a semi-retired transportation economist with a long-standing interest in freight transportation. An Economics faculty member at the University of Tennessee assigned to UT’s Center for Transportation Research, his professional career has included both academic and consulting research in transportation economics. In addition to authoring several articles and monographs, Dr. Burton has provided testimony in proceedings before the Surface Transportation Board, a variety of state agencies, and the U.S. Senate. In August 2004, Dr. Burton was named as Director of Transportation Economics at the University of Tennessee’s Center for Transportation Research. In addition to his academic work, Dr. Burton has three years of practical experience, serving in Burlington Northern’s Law Department between 1982 and 1985. The opinions expressed here are his own.
