How will the Moving Forward Act, passed by the House, affect rail? (Tony Hatch)

20161212 Tonyhatch (Cropped)

Washington – the Pendulum swings back against the rails: I previously commented on the poor timing to even discuss M&A given the ongoing saga of the obstacles to selling a low density (Massena) line, as well as some of the issues in Mexico.  Meanwhile, and related to the atmosphere of seeming anti-freight rail biases, here comes the House-passed “Moving Forward Act” as a possible successor to the FAST Act, which expires on September 30. The rail trade groups (AAR, ASLRRA, RSI, NRC) have been diplomatic, but it doesn’t take a Detective Bosch to understand what’s really going on. The bill as it relates to rails is a broad gift to the railway unions, a form of old-style Democratic leadership that dates back to the ‘50s & 60s; it would entail:

  • Mandated 2-man crews (after the successful implementation of the “unfunded mandate” of PTC!); coming during the national rail labor negotiations (for a good read on the hard feelings around the negotiations, if not the actual discussions themselves, see Frank Wilner’s column in the May issue of RA). Meanwhile, if anyone cares, the FRA announced that PTC implementation was at 98%.
  • Directed a study on PSR strategy, as noted before (barn door/horses in the glue factory – but still – invasive).
  • Ditto on demurrage (barn door, horses mostly gone as shipper behavior conformed to new practices).
  • It appears to be also invasive of private business practices in terms of train length and, importantly, the ability of rails to outsource MoW and other work (which would hurt as well as also have the government interfere in rail/labor bargaining).
  • But too soon to panic – it doesn’t appear that the Senate will support this, but in 2021?
  • The STB’s full plate is coming into the dining room of visibility (sorry) – with longer-term stomach aches being possible in terms of market dominance, revenue adequacy….remember, rail regulation is big business versus big business (the AAR in one corner, the ACC in the other, so that, anyway doesn’t have a partisan edge and won't be impacted much by November. The two (of 3) votes on the Massena line were one Dem, one GOP.
  • Meanwhile, in Ottawa, it’s quieter (naturally) but the RAC (chaired by Fiona Murray of the Canadian NATIONAL) is working with the government on a form of ETC, having ranked the corridors in play and developing the technical documents….