Let the Free Market Ride the Rails

Imagine it was your life’s dream to open a restaurant. You found a great location, hired a top-notch chef and taught him your grandmother’s favorite recipes, put together a great wait staff, and made the dining room fit for the Food Network.

But during your grand opening, a customer wanted a McDonald’s Happy Meal…and to your surprise a government mandate required one of your waiters to visit the Golden Arches to get that Happy Meal. You had no choice in the matter. Sure, you received some compensation, but certainly not enough to justify the cost, much less your investment in a trendy dining experience.

Sound crazy? That’s exactly what some are proposing in the railroad industry. Like your hypothetical restaurant, railroads invest significant sums in their networks to provide safe and efficient service. One new locomotive costs more than $2 million. Constructing one mile of track capable of handling a freight train running at 70mph costs more than $1 million. Billions have been invested across the industry for Positive Train Control a government-mandated safety system designed to prevent crashes and derailments. Rail carriers work closely with their customers to design custom services that were nearly unheard of when railroads were regulated like public utilities. Railroad employees are well-compensated, matching the difficult, highly-skilled jobs they do. Freight rail carriers even provide the infrastructure for Amtrak trains like the growing Downeaster services in New England and Capitol Corridor trains in California.

Why then should railroads be forced to open their networks up to the trains of their competitors? Railroad shippers say they want choice, but those same shippers have the choice to locate where they can be served by multiple railroads. They also have the freedom to choose whether they ship by rail or not. These freedoms are the truest manifestation of the free market. If railroads don’t offer competitive service and prices, they won’t carry the freight. End of the Line.

Flowery terms like “reciprocal switching” and “rate relief” being bandied about in Congress and by the Surface Transportation Board (the primary railroad regulator) are just a different way of saying “government mandates” and “Washington solutions in search of non-existent problems.” Government mandates fail spectacularly everyplace they’re tried, so as America grapples with an evolving e-commerce economy and growing traffic jams on the government’s highways, let the free market continue to ride the rails.