October 14, 2020 - TRA Editorial -

Texas is a powerhouse, even in these unprecedented times that have brought disruption and upheaval, Texas is well-positioned for a robust recovery because of the very advantages—from our workforce to our infrastructure—that have made us so vigorous that we grow by leaps and bounds.

One advantage sometimes overlooked because of its behind-the-scenes nature is our strong freight rail network. Rail’s connectivity power—and how this fuels the state's growth— is why I was pleased to join over 1,000 community, business and elected officials across the country recently in signing a letter to commemorate a major rail milestone. Forty years ago this October 14, President Jimmy Carter signed the Staggers Rail Act into law.

Due to severe government overregulation, freight railroads before the Staggers Act were in a downward spiral of disinvestment and disrepair that required congressional intervention. Overwhelming bipartisan majorities in the U.S. House and Senate passed a bill to partially deregulate certain economic aspects of freight railroading. And this little-known action has paid tremendous dividends.

When enacted in 1980, Staggers simply allowed railroads to operate like other businesses in the marketplace—for example giving them the ability to enter into contracts, set their own rates and routes, and earn enough revenue to be successful companies. This stability in turn meant they could afford to make the massive investments in infrastructure and technology that it takes to run a railroad. This seemingly simple and straightforward concept was revolutionary.

Freight railroads since 1980 have invested $710 billion of their own capital into the equipment, infrastructure and technology necessary to execute a rail renaissance that has doubled rail traffic and fuel efficiency. Meanwhile, rail rates are actually down 43% when adjusted for inflation, meaning shippers today can move about twice as much freight for about the same price they paid four decades ago. What a difference a little balance and common sense can make.

While celebrating the Staggers milestone is worthwhile, it’s more important today to make sure policymakers maintain this balanced approach into the future because it still works. Our Texas economy is strong, in no small measure because freight railroads help connect our industries to markets across the state, country and world. From manufactured goods to energy sources, agricultural products to essential goods and PPE, freight rail carries it all.

Fort Worth-based BNSF Railway is one of the largest railroads in the world and Union Pacific, another rail giant, has a huge presence supporting the economy across Texas. They, along with Kansas City Southern, facilitate cross-border traffic that is part of an international trade portfolio supporting more than a million jobs in Texas. These railroads, along with dozens of Texas short-line feeder railroads, have also played a huge role during the pandemic in helping restock the nation’s shelves while being one of the few industries to not require government assistance—and will play a huge role in advancing our recovery.

Americans and Texans may be struggling now. We know that recovery will take time and will require industry, government and all of us to work together and to work hard. But we in Texas are better positioned than most. Texas has a robust GDP and we have a business-friendly attitude to keep growing.

The rail network is the backbone of our economy. The success of the railroad turnaround is something to celebrate and to work hard to keep going.

Peter LeCody is a Dallas business owner and President of Texas Rail Advocates.