CHICAGO,
May 27, 2009
(Press Release) -
While the nation has faced extraordinary economic challenges, America's freight railroads in 2008 invested a record $10 billion in capital projects that increase capacity, improve service and prepare for growth - all while continuing to improve safety, on-time performance and average train speeds, said Union Pacific Corp. Chairman, CEO and President Jim Young today, speaking as Chairman of the Association of American Railroads at the annual meeting of the North American Rail Shippers Association.
"This is a reflection of the fact that while responding to today's economic problems, railroads have managed to keep an eye on the future - a future in which the nation will need more passenger and freight rail service," Young said. "We intend to be prepared for that future."
As government attempts to address the nation's transportation challenges, Young highlighted certain key policy initiatives - such as rail regulatory reform, changes to the industry's limited antitrust exemptions and the development of high-speed rail - that are critical to the continued success of the industry.
Young urged caution to lawmakers weighing changes to rail regulation established by the Staggers Rail Act of 1980. He noted that since then, average rail rates have dropped by more than half on an inflation-adjusted basis, accident rates have dropped by 70 percent, rail market share has steadily increased, and the industry has invested more than $440 billion back into their networks to improve track, equipment and facilities.
"That regulatory system protected the rights of shippers from excessive rail market power while at the same time providing railroads with new ability to react to changes in the market place, Young said. "The result has been an unqualified success."
Also critical to railroads are proposals currently being debated in Congress that would eliminate the industry's limited antitrust exemptions.
"These proposals are based on the misconception that railroads are exempt from most antitrust laws. That is simply not true," Young said. "The legislation proposed would subject railroads to conflicting regulatory schemes, creating inefficiencies that would cause operating costs to increase. Eventually, those cost increases would reach our customers, causing their costs to increase as well."
The national push to develop high-speed passenger rail is of critical importance not only to railroads, but also to their customers, Young added.
"There are many good things expanded high speed rail could accomplish, including reductions in greenhouse gases and fuel consumption as well as highway and air congestion," Young said. "But if all we do is super-impose high speed passenger rail on existing freight networks, it will consume freight capacity needed for freight customers today and limit our ability to expand for the customer's growth in the future."
Young assured the shipper group that freight railroads are part of the solution to some of America's challenges, as long as key policy initiatives strike the right balance needed to support the industry's continued capital investment in its own infrastructure.
"We've proven that with reasonable financial returns, we will invest in our infrastructure, making service to our customers safer, faster and more reliable," Young said, adding that railroads and shippers are dependent upon each other's success.
"We need strong industries to grow our business, while you need a strong and efficient rail network to move your goods at competitive prices. I believe both are possible and we look forward to working together to achieve success."
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