Wednesday, June 19, 2024

Keating: Congress should oppose the misnamed Rail Safety Act

by BIZ Magazine

Following a significant train derailment in Ohio in February, railroad labor unions and their allies in Congress have been seeking to expand their reach and membership in the name of “safety.” Most glaring is a misunderstood issue around train staffing. Labor unions want to freeze the current model in place forever, regardless of how technology and innovation might change things.

Assorted other measures would disproportionately affect energy and chemical companies, which power much of Louisiana’s economy, and have unintended consequences, such as increased truck traffic. Small businesses – both in railroad sectors and in industries that need their goods moved – stand to suffer the most.

Rather than push a bad bill across the finish line, Louisiana’s senators should stand their ground while the Republican-controlled U.S. House of Representatives continues to plot a more thoughtful approach to improve safety on railroads. Fresh off a victory in reducing federal spending, Louisiana’s Garrett Graves, also a member of the Transportation Committee, could play a key role.

Consider chiefly the staffing policy in the legislation. Ample research shows there is no safety gain. In fact, safety on railroads has increased dramatically as the number of people on a single train has decreased. The train in Ohio that spurred the current discussion was staffed with three people – actually above the typically two-person freight crews.

The costs of new government mandates are almost always underestimated by those seeking to impose such policies. Indeed, regulatory entities have incentives to underestimate such costs, and lack the proper knowledge to fully account for costs.

Competition in all its forms spur railroads, and other players in the transportation business, to be mindful of costs, prices and quality of service. Any businesses that ignore these essential points will find themselves in decline. Therefore, disallowing future changes is bad policy.

Technology is at the heart of the discussion in Washington, too, although with Congress seeking to micromanage deployment. Specifically, Congress is calling for railroads to install a set number of detectors that measure the heat of wheels – systems that exist at a large scale because these companies have a natural incentive to be safe. They are spread out in ways informed by data regression. Congress is calling for these businesses to put aside data-driven solutions and just slap a bunch of additional detectors around. Again, this sounds good, but it’s bad news for smaller railroads less equipped to install the systems. These railroads also need them less, as they travel much shorter distances.

But it also portends to crowd out needed advancements. “Having Congress prescribe specific safety measures for railroads — such as specifying the spacing of hot-bearing detectors — is nonsensical: Improved technology might render such detectors obsolete, but a legislative body lacks the expertise to know such matters,” says a professor in a letter to The Washington Post.

Last is the blunt-force changes Congress sees for any movement of hazardous materials. In essence, lawmakers want to treat any train carrying any amount of hazmat the same, and in turn, subject it to a range of unjustified restrictions. Delivery of non-hazardous materials, such as building materials or parcel packages, will be slowed to extremely low speeds. Or, railroads will simply bunch all hazardous materials together, thus increasing risks associated with those train movements.

Railroads should absolutely get safer. The Ohio incident this year proved as much. But policy should be designed to meet specific needs, not favor constituencies like organized labor. It’s time for Congress to consider a better path on rail safety.

Raymond J. Keating is the chief economist for the Small Business and Entrepreneurship Council.

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