American Association of Railroads (AAR) president and CEO Ian Jefferies issued the following statement on the US Department of Transportation’s (DoT) supply chain report responding to Executive Order 14017.

In the statement, Jefferies said: “The Biden administration deserves credit for an extensive review of the US supply chain, which by definition is vast and complex. Freight railroads have and will continue to invest large sums of their own capital into the rail system to maintain the nation’s top-rated infrastructure and safely and efficiently serve customers. As we noted to the US Department of Transportation in previous comments, freight railroads operated throughout the pandemic – 24/7 – weathering the economic downturn without federal assistance. While railroads experienced some challenges in moving goods, many of those were due to external forces discussed in the report, such as workforce and chassis shortages and insufficient warehouse capacity.”

The report’s discussion and policy recommendations directed at the US freight rail sector, however, raise concerns that powerful special interests are co-opting logistics challenges created by the pandemic to obtain below market rates and pad their own profit lines. Make no mistake: the recommendation for federal regulators to impose new economic regulations is at direct odds with the stated goals of this report to increase freight fluidity and would also lead to freight diversion away from railroads that would hinder the White House’s other stated goal of reducing carbon emissions. The current push at the Surface Transportation Board to impose “reciprocal switching” regulation would create inefficiencies, inhibit investment and in turn make rail transportation less competitive.

Freight railroads submitted extensive comments to the DOT’s request for information to help develop this report, so it is unfortunate the report ignores those suggestions and comments and instead focuses on matters that would actually disrupt the fluidity of supply chains. A wide array of stakeholders – including labour, passenger rail, environmentalists and state and local leaders – recently outlined to the STB why economic re-regulation of rail will not improve the network, but instead do little more than “appease the rent-seeking interests of the chemical sector and its allied shipper interests.” The administration should disregard misleading data analysis and heed these real-world concerns to ensure that its policy agenda is consistent with its topline goals to increase freight fluidity, spur investment and reduce the environmental impact of the supply chain.