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Industry Insights

Smart regulations needed to preserve freight rail's economic impact in N.J.

By ,
Peter Goelz.
Peter Goelz.

With 17 railroads annually carrying more than 43 million tons of cargo through the state, the freight rail industry plays a tremendous role in powering New Jersey's economy. But several proposed rules that ignore the industry's strong safety record are threatening freight rail's ability to support the state's economic future.

 New Jersey’s freight rail system stretches almost 1,000 miles and ranks in the Top 10 in the nation in the transport of intermodal cargo, in which truck-trailers and shipping containers are transported on rail flat cars.  And more than 1,100 New Jersey residents help move these goods every year, making an average salary of over $100,000.

Given its significance to the region’s economy, policy makers must facilitate, not hinder, rail transportation. Unfortunately, railroads are increasingly faced with government mandates that seemingly disregard their impressive safety record, as well as ignore the economic growth that partial deregulation has brought. There is a need to set the record straight, and for decision makers to view freight rail without bias and make decisions driven by hard data, not anecdotes or politics.

Government safety statistics paint a clear picture. On the mainline rail network, derailments are down 25 percent compared to 2010. Employee injuries have decreased 48 percent in the last 15 years, while the overall train accident rate is 39 percent less today than in 2000. For the transportation of hazardous materials, 99.99 percent of carloads move freely without incident to their destinations.

Consider also the positive effect of just one train taking as many as 200 trucks off the road. It eases congestion, reduces infrastructure wear and tear, increases safety and cuts emissions.

Also, consider the continued efforts of the industry to train the emergency community and develop resources such as AskRail, a mobile application that provides real time info regarding rail cargo so that if a rare accident occurs first responders know the right steps to take as quickly as possible.

Railroads have said repeatedly their goal is zero accidents, and they are working every day to achieve that goal. The data reflects the positive progress made.

But several recent policy proposals from outside of Congress seem to disregard the railroads’ safety record and perhaps mask other broader political agendas.

For instance, the Federal Railroad Administration continues to advance a proposal that dictates crew size operations even though evidence actually points toward single man crews being safer. The costly supposed redundancy in fact offers no greater level of safety. At best the proposal needs further study before being arbitrarily imposed.

The Surface Transportation Board has also recently proposed a number of new regulations that would threaten the success of the industry, including a rule that would require railroads to give competitors access to their rail lines. This “forced access” rule would disrupt the efficient flow of cargo that makes freight railroads such a vital piece of our economy.

Misguided proposals like these could handicap our still fragile economic growth. New data shows the U.S. economy grew just 1.2 percent in the second quarter. Meanwhile, new data also shows that the railroad sector generated $274 billion in economic activity and $33 billion in taxes in 2014 alone.

Sen. Cory Booker of New Jersey, who heads the Senate subcommittee overseeing rail, gets it. “Freight railroads mean more job opportunities and a more productive economy,” he says.

While no one is alleging that any one single policy proposal will cripple the industry, thereby diminishing its positive economic impact in New Jersey, the aggregate of regulations could have a real dampening effect in the future. In these less-than-ideal economic times, why should we ignore the safety record of railroads and unnecessarily disrupt an economic engine like freight rail?

We have seen the damaging economic effects of overregulating industries with burdensome red tape in the past.  This is why we must let data — not politics —drive smart safety policies that continue keeping communities safe and allow freight rail to support the economy in New Jersey and throughout the country.

Goelz served as managing director of the National Transportation Safety Board from 1995-2000.

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Write to the Editorial Department at editorial@njbiz.com

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