New rail regulatory legislation appears dead for this Congress, according to the top executive for Norfolk Southern Railway.
Charles W. Moorman, NS chairman, president and CEO, told the Dahlman Rose investors transportation conference this week that he expects the issues that prompted the legislation will wait for a new Congress to deal with next year.
If so, that would be a major defeat for a coalition of activist rail shippers and for key Democratic committee chairmen in the Senate and House, who had pledged to get a rail competition bill enacted this year while the current Congress is still in place. It they fail to pass it in 2010, the next Congress could start over in drafting a completely new bill.
By The Numbers: U.S. Rail Cargo.
A shipper-backed regulatory overhaul bill passed the Senate Commerce Committee last December as a top priority of Chairman Jay Rockefeller, D-W.Va., and with broad bipartisan support.
But it never advanced to the full Senate, amid stiff railroad opposition to various parts they said would shift competition rules too much toward rail freight shippers and thereby threaten railroad profitability. House Transportation and Infrastructure Chairman James L. Oberstar later said he was negotiating the contents of a final bill with Rockefeller, and would put an identical measure through the House once the Senate acts.
But Moorman talked in the past tense about the legislation, as he told the New York conference on Sept. 8 that rail industry officials “worked very hard over the past 2 years to try to see if there was in some sense a compromise position on legislation.” Instead, said Moorman, “there was never seemingly an ability to reach a position in which we could live with and other folks could live with as well.”
Moorman said he considers it “highly unlikely” that a lame-duck Congress would act on the Rockefeller bill after the Nov. 2 elections and before a new Congress takes office in January. He did not address whether it could pass before the election, and most observers think Congress will be able to enact very little new legislation before it recesses to campaign this fall.
So, he said, “I think that we’ll all come back. We’ll have a Congress that obviously looks different next year, and we’ll sit down and start again with those conversations and see if there’s something to be done.”
Activist shippers have seen the current legislation as their best hope since 1980 deregulation to win competitive access to a second railroad for many freight shipments now held “captive” under current rules. Captives pay significantly higher freight rates on average than shippers that have more than one rail transportation option. But railroads labeled it as “reregulation,” and said it risked pushing the industry back toward the crippling financial situation that prompted Congress to deregulate them 30 years ago.
Still, railroad executives have also pressed Congress for financial aid such as new tax breaks targeted just for major railroads investing in capacity expansion, and for help paying for a federally mandated train-control technology they must deploy by mid-decade. They are also winning substantial support from the Obama administration for grants to support new freight terminals and fast-route corridors, and to carry more passenger trains.
Moorman has been outspoken against the legislation and against what he has said is a small group of activist shippers trying to get it passed to lower their own freight charges. He told the investor conference this week that “the rail industry remains interested in trying to find some way to put some of this discussion behind us, but it cannot be at the expense of putting us back” to an era of weak railroad finances.
-- Contact John D. Boyd at email@example.com.