ARLINGTON, VA — The American Consumer Institute (ACI) releases itsHow “Reasonable” Restrictions Become Unreasonable’ research paper:

Recent legislative and executive proposals are attempting to further impose public utility-style regulations on the U.S. freight rail system. These proposals are akin to the outdated and repealed Interstate Commerce Commission’s regulations that once led to numerous bankruptcies for freight rail lines over 40 years ago.

The latest example is a bill introduced by Senator Baldwin this week that will likely lead to higher prices for goods shipped, encourage rent-seeking by large shippers looking for favorable rates, and return the industry to onerous regulations that were ended over forty years ago and which nearly bankrupted the industry. The reasons for these regulations are not clear, considering there is no evidence that freight rail carriers have failed to meet their common carrier obligations.

This white paper recommends that STB and Congress take into consideration the competitive structure of the modern freight shipping industry when considering regulatory changes. Rail is no longer the major mode of freight transport. Regulations that target only one mode of transport will only serve to push more freight to trucking, thereby creating increased safety problems, more pollution, and increased wear and tear on public roads and bridges.

This white paper suggests that instead of expanding common carrier requirements to appear closer to the ICC’s former regulations, policymakers should consider streamlining the existing standard and limiting regulatory overreach.

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