Matt Yglesias

Freight Rail’s Anti-Trust Exemption

An alert industry observer brought to my attention legislation by Senator Herb Kohl (D-WI) aimed at revoking the anti-trust exemption the freight rail industry currently enjoys. I don’t want to claim to be an expert on all the ins-and-outs of this but my understanding is that this would be a mistake and that it’s good that Jay Rockefeller (D-WV) has switched sides and is now joining Sens. Kay Bailey Hutchison, Frank Lautenberg, and John Thune in opposing this.

One of the reasons the rail situation in the United States has gotten so bad is because of a lot of infighting between the freight rail people and the passenger rail and transit people. More recently, however, the OneRail coalition has come together, which recognizes that rail advocates of all kinds have a great deal in common and can best advance their goals working together. A strong freight rail industry can and should be an important part of America’s transportation network, both because of its own intrinsic benefits (this is a very energy efficient way of moving stuff) and also as part of building a rail system that’s robust enough to also support viable passenger traffic. The fact that rail shipping rates are rising reflects the fact that rail is an appealing option under present conditions. It looks to me like an argument for increasing freight rail capacity not for harsher regulations.

Ride the Freight Train

Phillip Longman has a piece in The Washington Monthly making the case for increased investments in high-quality freight rail. I think this is about right. There are certain kinds of trips that are — if the trains exist — intrinsically better-suited to passenger rail than to driving or flying. But that’s a limited set of trips, especially in the United States which is relatively sparsely populated. For freight there’s a similar calculus, but you wind up with a different answer, and there’s a much wider set of trips that are best done by rail. Which is one of the reasons why in even our current pathetically train-deprived state a great deal of freight shipping happens on trains. But we could be doing much more. He observes:

By all rights, America’s dilapidated rail lines ought to be a prime candidate for some of that spending. All over the country there are opportunities like the I-81/Crescent Corridor deal, in which relatively modest amounts of capital could unclog massive traffic bottlenecks, revving up the economy while saving energy and lives. Many of these projects have already begun, like Virginia’s, or are sitting on planners’ shelves and could be up and running quickly. And if we’re willing to think bigger and more long term—and we should be—the potential of a twenty-first-century rail system is truly astonishing. In a study recently presented to the National Academy of Engineering, the Millennium Institute, a nonprofit known for its expertise in energy and environmental modeling, calculated the likely benefits of an expenditure of $250 billion to $500 billion on improved rail infrastructure. It found that such an investment would get 85 percent of all long-haul trucks off the nation’s highways by 2030, while also delivering ample capacity for high-speed passenger rail. If high-traffic rail lines were also electrified and powered in part by renewable energy sources, that investment would reduce the nation’s greenhouse gas emission by 38 percent and oil consumption by 22 percent. By moderating the growing cost of logistics, it would also leave the nation’s economy 13 percent larger by 2030 than it would otherwise be.

One appealing thing about freight rail investments is that there’s a greater potential for interim steps that make a difference. Since there’s already a lot of freight rail happening, there are plenty of places where smallish improvements would increase usage and capacity a great deal. And then when the small improvements have piled on, that creates a bigger rail infrastructure that can also support passenger projects like commuter rail lines.

One word of caution I would offer about all this, however, is that while we certainly should try to get stimulus money to fund good infrastructure projects, we shouldn’t think of infrastructure spending as primarily a stimulus issue. A genuinely good infrastructure investment is worth making whether or not there’s a need for short-term stimulus. And just spending on infrastructure for the sake of spending can get you a lot of pointless garbage like we’ve seen recently in Japan which isn’t what we want. And people who have worthwhile projects to advocate shouldn’t invite people to think of the projects as make-work by talking about them exclusively in terms of the stimulus. This freight rail stuff would be worth doing in a totally normal economic climate.