repealing railroads' antitrust exemption?

Time for another of my minimally-edited and haphazardly-written railroad ramblings.

I'm not sure what I think of this bill making its way through the system right now. As with every piece of legislation passed pertaining to the railroads these days, it doesn't understand the true context, ignores the root concerns, forgets history, has some massive unintended consequences, and will inevitably worsen the very problems it's trying to fix. Oh wait, never mind, I know exactly what I think of it. As reported by Progressive Railroading and Railway Age the Senate Judiciary Committee voted to pass the bill that removes American railroads' antitrust exemptions. In general I tend to side with antitrust protections, however there is no doubt that one of the key factors in the railroads' crash was the stifling government rate controls, and their removal did play a major role in the recovery.

Railroads in America are a unique industry, one that few really understand or appreciate. They are very different from every other rail network in the world, and not at all like any other industry in America. In many ways they are most akin to a utility, and in almost all of the rest of the world would be treated as a public entity. But here we have yet another weird not-free market, not-socialist, not-anything else system that evolved over decades into something very peculiar. America (and Canada - the two networks are functionally one and the same in most situations) is perhaps the only place with private, profitable freight railroads. Certainly the only of this scale or of a comparable context. Nothing else comes close, and our freight rail network is far and away one of the best in the world ("best" meaning efficiency especially, and to a lesser degree, capacity and utilization relative to population though some of that is debatable). But just a few decades ago under very different regulatory conditions (and much more - economy, technology, etc) that was not the case. It's outside the scope of this rambling to go into, and has been covered a million times over. All that matters is that we were very close to having a freight rail network of comparable quality to most of the rest of the world in large part due to the regulatory environment of the time, and we're very lucky that didn't happen.

We treat utilities very haphazardly in America, and on the whole very stupidly I think. We set up the system through regulations in such a way that both true competition and the protection of the public interest are prevented. Not to mention a system that economically-encourages poor investment in the network, helping to worsen our infrastructure gap with the rest of the developed world. And yet our railroads are somehow outside of that usual pattern.

I think that going the route that England and a few others have tried to some degree could possibly work, depending on the details. It's always the subtle nuances and follow-through that make or break seemingly-similar systems. Nationalize the backbone network, and allow open competitive access to all companies over the same track. But the path back towards antitrust regulation and rate-setting will almost-certainly cause the same problems it did last time. As it stands, the railroads are regulated, the standards under which they're regulated are just very different. The rate monopoly complaints of shippers that have prompted this legislation? Some of it is very legitimate. Some of it is total bullshit when you look at the overall transportation system in America. But it is still far less of a problem than it had been under previous regulatory environments.

Mostly I just think this will make things worse in the long run if passed, though it probably won't have a significant immediate impact.

India's railroads failing to keep up with growth

and in the process choking the nation's economy. India has a railroad infrastructure that is very similar in design, equipment, and practices to those of other eastern-Asian and African former-colonies, which is to say a mirror of British practices from the 30's and 40's. Despite being a powerhouse of the global economy and having the second-largest population in the world, India is running what is essentially an overgrown 'third-world' railroad. The loading gauges and tonnages are tiny by American standards and even modest by international standards.

(One quibble with the article - the author comparison of passenger train speeds is rather irrelevant - the Acela hardly counts as high-speed, and it's average speed is closer to 70 or 80 mph, not the 150 that it manages for only a couple short miles in eastern CT. Most countries get by just fine with conventional speed passenger service, and even in nations like France with heavy TGV penetration the vast majority of service is on local and conventional trains - high speed trains are irrelevant to normal passengers' needs.)

An important lesson to remember from India though, is that north-american railroads are expected to see over 40% traffic increases for the next several decades, and will need tens or hundreds of billions in capital investments to meet that demand. They are already at-capacity on all core routes, and can't come close to affording the sort of build-out they will need. For the next decade or so they can get by with incremental improvements to the existing infrastructure - eliminating bottlenecks primarily - but they will eventually need to invest in major build-outs. (Note that this means heavy investment to existing routes, not new routes or reopening old lines - it is far more efficient to upgrade the slimmed-down and vastly more-efficient modern network than to spread themselves thin since the constraints are all on the trunk routes, not the feeder-lines.)