Re-regulation of the railroad industry would hurt Maine’s railroad operators

Not that long ago – when gas was less than a dollar, an SUV wasn’t in the American lexicon, and Kyoto was linked with Japanese food rather than a global warming treaty – rail was primarily a nostalgic, sleepy mode of transport. Of course, there were exceptions, but for the most part, goods were shipped domestically by truck or internationally by container ship or plane.

Fast-forward to today. Gas tops $3 a gallon. The nation’s major highways are congested to the point of gridlock. Corporate America is obsessing over carbon footprints and pollution reduction. As a result, the use of rail to transport goods, raw materials, and people is becoming more attractive. (Have you seen the recent ridership numbers for Amtrak’s Downeaster?) In a word, rail transport is hot.

That’s certainly true in Lewiston-Auburn. Over the past five years, rail activity has surged, as L-A now has a U.S. Customs Port, a Foreign Trade Zone (allowing companies that conduct international trade to reduce or defer tariffs on goods), a freight intermodal terminal that has doubled in size over the past five years, and the only double-stack container service in northern New England. L-A is also in the fray for an Amtrak station sometime in the future.

All of these positive local developments are the fruits of many people’s labor, primarily some very hard-working and savvy private sector companies, including Genesee & Wyoming/Saint Lawrence & Atlantic Railroad and Safe Handling, Inc. It’s largely the entrepreneurial spirit of the private sector that this community credits for such a wonderful rail-ride.

That is why a congressional bill you may not have heard much about, HR 2125, the Railroad Competition and Service Improvement Act of 2007, threatens to derail what we’ve all worked so hard to accomplish.

The bill would essentially turn back the clock and regulate the industry (which was deregulated back in 1981). The bill would dictate fee structures by which rail operators would have to abide, and essentially treat the industry as a one-size-fits-all proposition. Because re-regulating would force rail companies in some instances to offer favored shippers reduced rates, several billion dollars in revenues would be lost. Railroads – particularly smaller lines like those in Maine – would find it impossible to fund the necessary rail improvements needed for maximum efficiency and safety, not to mention to maintain a competitive edge.

The impact of this bill on Maine communities such as Lewiston-Auburn, which are becoming increasingly dependent on rail to harness an ever-growing international trade, transportation and logistics industry, could be devastating. Indeed, the community has just recently created a new industrial park in Auburn to capitalize on the continued vibrancy of freight transportation in the Twin Cities and to take advantage of the proximity to its municipal airport, FTZ, and Pine Tree Zones. We can’t afford to switch tracks now.

The most important question to ask is whether deregulation has worked. The answer is a resounding “Yes!”

Overall volume of the nation’s railroad industry over the past 25 years is reportedly up 95 percent and rail productivity is up 167 percent. During that time, railroads have reinvested well over $375 billion in order to improve service. Locally, rail use is up as well: rail car shipments for Safe Handling alone was up 40 percent from 2002-2004, and rail siding has been added to companies, including Cascades Auburn Fiber and Port of Auburn LLC. Other companies that have benefited from using rail include Fore River, M.B. Bark, Panolam and UCF Grain. Thanks to Saint Lawrence’s connections to Canadian National lines, rail serves as an international link to deep sea shipping ports in Vancouver, British Columbia, and Halifax, Nova Scotia, providing access to markets in Europe and Asia.

It is precisely because of the innovation and competition in the private sector that this area has done so well in establishing itself as a transportation hub. Government re-regulation of the railroad industry would stifle some of that entrepreneurial spirit, force our railroad operators to cut back on rates, and jeopardize long-term investments.

Furthermore, by turning back the clock on federal rail industry oversight, we risk having bureaucrats – who have traditionally not understood or appreciated some of Maine’s unique geographic, economic, and logistics challenges – mandate rates and define what our freight experts know best: how to operate their unique rail lines efficiently, effectively, and economically.

Here’s a simple reality check: If you happen to be stuck behind a railroad crossing as the gate comes down and the light turns red, count the number of rail cars that pass by. Then consider how much product is moving through this state via rail.

Then ask yourself why in the world Congress would want to thrust the hand brake on progress, just as the train is gaining momentum?

Lucien B. Gosselin of Lewiston is president of the Lewiston-Auburn Economic Growth Council. E-mail him at [email protected]