U.S. railroads mark 25th anniversary of Staggers Act
U.S. railroads are celebrating the passage a quarter-century ago of the Staggers Rail Act of 1980, which essentially deregulated the U.S. rail freight network.
Specifically, the Staggers Act limited the authority of the Interstate Commerce Commission, which is now the Surface Transportation Board, to regulate rail rates only for traffic where competition is not effective to protect shippers.
The Staggers Act also legalized railroad-shipper contracts. At least 55 percent of all U.S. rail traffic moves under contract today. Those contracts are privately negotiated agreements between railroads and shippers over rates, service levels, equipment used, and minimum annual volume of traffic.
'Before Staggers became law, more than 20 percent of the rail industry had gone into bankruptcy over the previous decade. Earnings averaged less than 2 percent on investment. Rates were rising faster than inflation. Deferred maintenance was mounting as accident rates soared. Market share was in what seemed to be a never-ending downward spiral,' the Association of American Railroads (AAR) said in a statement.
By passing the Staggers Act, which President Jimmy Carter signed into law, Congress tackled 'the root problem: an unresponsive regulatory system that made it virtually impossible for railroads to respond to the disciplines and opportunities of the marketplace,' AAR explained.
After 25 years, U.S. rail productivity has tripled. Intermodal traffic has almost quadrupled. Rail accidents are down by two-thirds. 'Rates have declined by more than half, yet earnings have improved sharply,' AAR said.
The act was named for U.S. Rep. Harley O. Staggers, a Democrat from West Virginia, who was chairman of the House Energy and Commerce Committee that drafted the legislation.
