Railroad concerns just popping up all over

Nothing big this week, but there are little things popping up that deserve mention on these blog pages.

While the Surface Transportation Board increases civil violation penalties by 1.6 percent to account for the inflation that “didn’t exist” when the Social Security Administration decided not to make any cost of living increases, it continues to hold reciprocal switching rules and possible re-regulation of some commodity rates over the heads of the freight railroads. This, in my opinion, reflects the slow transition of the STB from a body constituted in the wake of de-regulation solely to foster competition and review mergers with an eye to prevent combinations disastrous to the public commerce to an out-of-control regulatory behemoth.

That the STB would continue down this path even in the wake of the recent election shows its disdain for both the Congress and the incoming administration, despite the pledge of President Donald Trump to slash burdensome regulations whenever and wherever possible.

The Federal Railroad Administration is the freight railroads’ safety regulator (while STB is financial—sometimes in concept only), and it, too, is ready to double down on mandatory two-man crews, heading off the remote possibility that railroads will be able to utilize Positive Train Control to achieve zero-man crews by the end of this decade.

Meanwhile, passenger rail, which has always struggled to find a financial foothold in America, may be getting a boost from the once-more-for-the-first-time start of Brightline, Florida’s privately built and operated high speed passenger railroad serving Miami, Fort Lauderdale, West Palm Beach, and eventually Orlando. Brightline’s success will be a harbinger for the future of passenger rail without government involvement.

Success is not assured, however, and its failure might boost the naysayers that contend only government agencies and taxpayer money can run passenger trains. Virtually the moment that Brightline unveiled its new equipment, a bill was introduced in the Florida legislature to give the Florida Department of Transportation authority over Brightline trains, including the power to change trains, routes, and services and impose fines.

Back on the freight rail side, there is the report that the first weeks of 2017 are bringing an uptick in both coal and intermodal traffic. It’s too soon to know if this is a trend. I think Hunter Harrison thinks so. The prospect of getting his hands on CSX Transportation and turning it into a money-making side show was enough to get him to leave Canadian Pacific early, as it was clear that CP no longer had the stomach for some kind of merger with one of the eastern Class One’s. That he would be taking over CSX for an investment group, if approved by CSX stockholders, is all but confirmed as this is written.

Although it spurned at least two merger proposals from Harrison-run CP, the word on Wall Street is that CSX may favorably view the idea of hiring Harrison as its CEO, particularly as it comes with an investment of $1 billion from the investment group fronting him. That’s big-time money when compared to last year’s CSX capex of only $2.4 billion.

More concerns are popping up every day. The year and the Trump Administration are only just getting started, so I'm sure I'll have more to blog about next week. See you then.

©2017 – C. A. Turek – mistertrains@gmail.com

(Charles A. Turek is a writer and novelist based in Albuquerque, NM. After four decades working in areas of the insurance industry related to transportation, he now writes on all aspects of American railroading. Charles is a political conservative but believes in public funding of passenger rail as a part of the federal government’s constitutionally conservative obligation to provide for defense and public infrastructure so that private enterprise may flourish.)