The Port of Wilmington received good news last month with the announcement that it will receive over $18 million from a federal grant for rail infrastructure upgrades. The funding, distributed through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) program, will help build a new intermodal facility at the port—cutting down on truck trips and enhancing efficiency.
Forward-thinking like this will propel our state’s economic development. Strengthening supply chain connections is a particular focus of local and state leaders. Commerce Secretary Machelle Baker Sanders recently noted that, with efficient deep water ports and easy access to much of the rest of the country, North Carolina “logistics companies can thrive.”
It’s unfortunate that while we make progress locally, a proposed bill in Congress could roll back these gains and undercut our rail network. Being hastened for a vote in the House Transportation and Infrastructure Committee this month, the “Freight Rail Shipping Fair Market Act” would insert the government into routine rail operations, making it harder for rail companies to earn enough revenue to invest at high levels into the rail lines connecting state industry.
Twenty-three different freight railroads operate across North Carolina, carrying more than 80 million tons of freight and displacing some 4.6 million heavy truck trips annually. Large, Class I railroad CSX connects the Port of Wilmington, for example, to the rest of the state and far beyond. It’s expected that the port’s rail upgrades will divert nearly 250,000 container boxes from trucks to rail over the next decade—mitigating local traffic, wear on publicly funded roadways, and emissions.
While chugging away in the background, these railroads are critical to our state’s manufacturers, agricultural producers, power plants, mines, and more. And the network’s ability to serve customers—to keep our businesses competitive—hinges on private spending from rail companies. In recent years this spending has exceeded $20 billion annually, about 40 cents of every rail revenue dollar earned.
That’s why it would be problematic if the government intervenes in rail operations in a way that makes them less able to invest. We’ve seen the result of such policy before. By the late 1970s, over-regulation had driven a foundational American industry into the ground. Heavy-handed mandates dictated where and when trains operated and how much railroads could charge for their services.
U.S. freight railroads today are the best in the world as measured by shipper cost and productivity. They achieved this through smart, bipartisan deregulatory policy passed in 1980 that freed them to operate like other businesses in a market-based system.
Today’s “fair market” rail bill would be a departure from this balanced policy that has allowed railroads to invest and innovate to meet the needs of the customers and communities they serve. Policymakers should see it for what it is—a solution searching for a problem. Not even the chair of the board overseeing rail economic regulation believes that giving his group of regulators more oversight would help railroads confront current supply chain challenges.
Instead, our leaders should do what they can to ensure more freight, not less, can move by rail as demand increases in the future. Our state and local leaders already recognize and are fostering the economic development that accompanies efficient logistics operations. Let’s encourage federal leaders to embrace rail by rejecting this misguided bill.
Frank Iler represents District 17 (Brunswick County) in the North Carolina House of Representatives. He also serves as Chairman of the NC House Transportation Committee.