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Home My WebLink About01/15/2019 10 Request for Letter of Support by GoRail to\'4\lyy tbxk ik 1 PPP +� PPP d g. P A P p PPi ittYlltYlt.\ta. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEM ENT Item No. 10. For Meeting of: January 15, 2019 ITEM TITLE: Request for letter of support by GoRail SUBMITTED BY: Randy Beehler, Community and Public Affairs SUMMARY EXPLANATION: At its January 8th regular meeting, the Council heard a presentation from a representative of GoRail, a national rail advocacy organization, and discussed a request from GoRail for the Council to send a letter to certain members of Congress expressing concern over regulations being considered by the federal Surface Transportation Board (STB). Following its discussion at its January 8th regular meeting, the Council voted to postpone action on the GoRail request until the Council's January 15th regular meeting. The Council directed City staff to review a draft letter provided by GoRail and make any recommended revisions to the letter. A revised letter is included in the Council's January 15th regular meeting agenda packet. City staff and City lobbyists have contacted the offices of Senator Patty Murray, Senator Maria Cantwell, and Representative Dan Newhouse regarding what, if any, position Senator Murray, Senator Cantwell, and Representative Newhouse have taken on the proposed STB regulations. City staff will report whatever information is received from those three elected officials at the January 15th Council regular meeting. ITEM BUDGETED: STRATEGIC PRIORITY: APPROVED FOR ' SUBMITTAL: City Manager STAFF RECOMMENDATION: BOARD/COMMITTEE RECOMMENDATION: 2 ATTACHMENTS: Description Upload Date Type D eItnrdeap Cover Memo D gonad 1/912019 Cover Memo D go rail 1/9/2019 Cow;Memo 3 January 15, 2019 The Honorable Patty Murray 154 Russell SOB Washington, DC 20510 Dear Senator Murray, The Yakima City Council is concerned about federal government actions that could undercut private sector investment in the freight rail industry. The Council's concerns include the Surface Transportation Board's (STB) proposed regulations that are referred to by some as "forced access." The proposed regulations could serve to undermine the resilience of our state and regional economy by diminishing the strength of the rail industry. It is important that businesses have reliable and uninterrupted access to efficient freight transportation to ensure agricultural and other products produced in the Yakima Valley are able to compete nationally and internationally. The proposed regulations could result in railroads being required to provide competitors with access to their private rail lines. Imposing such regulations would be a step away from the current regulatory system, which protects a nationwide freight rail network that businesses rely on to meet customer requirements. Regulations like those being considered by the STB could negatively impact business activity by slowing the movement of goods in our state and across the country. When local businesses are negatively affected by government regulations, so are the communities in which those businesses are located. The affordable and reliable movement of goods is important for the Yakima area and the Central Washington region as well as the entire state. The Yakima City Council urges you to carefully monitor the proposed regulations under consideration at the STB and the impact they could have on businesses in the Yakima Valley and across the nation. Thank you for your attention to this matter. Sincerely, Distributed at the ASSOCIATION OF Freight Railroads in~ �� L "� ��K�ERICAKjR��ILROADS Washington ~� ��~��~~��= Miles Operated|n ' Washington Miles Operated Washington m2u17 ' 20/7Tota|s Number Excluding Including Class|Railroads of Freight T,eoka0o Trackage BNGF Railway Company 1.454 Railroads Rights Rights Union Pacific Railroad Co. 533 1.987 Class 3 1.607 1.987 Regional Railroads ' Regional 1 o 15 Montana Rail Link 15 Luoo| 19 1.341 1.549 W~ 15 &Tennmd 8 84 107 Local Railroads T6�' 30 3,032 3,658 Cascade&Columbia River Railroad 145 � Central Washington Railroad Company 00 Columbia&Cowlitz Railway 19 Miles Operated|n Columbia and Walla Walla Railway 37 Washington in2V17 Columbia Basin Railroad Company, Inc. 88 Local Railroads,cont. Eastern Washington Gateway Railroad 116 Western Washington Railroad, LLC 19 Eastside Community Rail, LLC 14 Yakima Central Railway 22 GNPR|y. Inc 14 1.549 Great Northwest Railroad, LLC. au Switching&Terminal Railroads Kettle Falls International Rmi|mmyLLo 133 Ballard Terminal Railroad o Palouse River&Coulee City Railroad, LLC. 226 Kennexiok Terminal Railroad 1 Pend Oreille Valley Railroad 61 Longview Switching Co. 17 Portland Vancouver Junction Railroad 14 Meeker Southern Railroad 5 Puget Sound&Pocifio Railroad Co. 283 Mount Vernon Terminal Railway 1 Tacoma Rail Mountain Division 93 Olympia&Bo|mone Railroad, Inc. 13 Mohington&Idaho Railway, Inc. 88 Tacoma Rail 47 Washington Royal Line 20 Th'Qty Railroad Company 20 107 Kettle Fa 11 s !2t Vernon SEverett spokan BNSF Wenatchee CN up! CP .`CS � mo UP Chehalis Multiple Owners 51 N�SF Map is based on the 2018 National Transportation Atlas Database published by the U 3 DOT,Bureau of Transportation ` Class/Railroad:A railroad with un1r operating revenues of at/oosto*'7nmm/"n- Regional Railroad:x non-Class/line-haul railroad that has annual revenues mat least o*o million,u,that operates at least n5m miles m road and revenues wot least$uomillion. Local Railroad;x railroad which/nneither } a Class/nor a Regional nonmao and which/oe�aoeo»,/mamv/nxnexau/newve mw/�m Te rminal Anvn'om ra ilroad »xmamvmow/�mnoanm te rminal ...................................__ ------- __ ............ .................... ...._ - __ m1es�uo1a./*soc/�/un�American nao,maoo For mommm,mononabout�//maon.visit w°w°amrg. oeuzo,a � ` n Freight Railroads in ASSOCIATION �F � - - Washington AMERICAN RAILROADS �� m�,��g�tn�� Rail Fast Facts For 2017 Operations Number uf freight railroads 30 Freight railroad mileage 3.032 Employment Number offreight nui|employees 4.381 and Earnings Average wages&benefits per freight rail employee $127.770 Railroad Number ofrailroad retirement beneficiaries 10.196 ' Retirement Railroad retirement benefits paid $228mi|Uun Economic Nationwide, in 2017, major U.S. railroads supported approximately 1.1 million jobs Impact (about eight jobs for every railroad job), nearly$219.5 billion in annual economic aotivity. $71 billion in wages and almost$2S billion in tax revenues. Fuel In 2017, America's railroads moved a ton of freight an average of 479 miles on one Efficiency gallon of fuel. That's like going from Seattle to Boise, ID. On average, railroads are four times more fuel efficient than trucks, Moving freight by rail instead oftruck reduces greenhouse gas emissions byun average 75percent. Cutting Highway One train can carry as much freight ae several hundred trucks. |t would have taken Gridlock approximately 6.5 million additional trucks to handle the 117.2 million tons of freight that originated in,terminated in, or moved through Washington by rail in 2017. Rail Traffic Originated in 2817 Total Tons: 20'7mmiHian Total Carloads: 787,208 * Lumber,Wood Commodity Tuns Carloads Products |ntemode| 9.862.000 651.700 Lumber,Wood Products 2,469,00 26,400 Petroleum 1.520.000 17.100 Petroleum | nn�u� FnrmPm�wmm 142OOOD 14OOO ~'~ ' 7Y6 ' ' ' wmnw Pulp and Paper 1.178.000 12.800 Other 4208OOO 651OO Farm Products ' ' ' 7% Source: AAR Analysis of3TBWaybills ' Pulp and Paper O% (Percentages based vntonnage) Rail Traffic Terminated in 2$17 Total Tons: 66'7 mwi0Viww Total Carloads: 1,105"600 P *a u | Commodity Tons Carloads Farm Products 34.572.000 309.200 |niannude| 8.290.000 513.300 :-:,Petroleum,Gas Petroleum,Gas 5.272.000 57.100 Food Products 3.986.000 41.000 Farm Products Chemicals 330�OOO 357UU Food Prod u�s . . . 52% 896 Other 11.181.000 143.300 Chemicals m 596 Source: AARAne0 �� ofGTBNayb0s MEW (p^,romaoovumoeuvnmnn*uv) __ (D 1993- mo.Aoauciat/vnmAmmnuan*uomeos For more information about railroads,visit wmw=arvw oeozo1u 6 January 15, 2019 The Honorable Maria Cantwell 511 Hart SOB Washington, DC 20510 Dear Senator Cantwell, We would like to convey our concerns about federal government actions that could undercut private sector investment in the freight rail industry.These include the Surface Transportation Board's (STB) proposed regulations known as "forced access," which would undermine the resilience of our state and regional economy by diminishing the strength of the rail industry. It is critically important that businesses have reliable and uninterrupted access to efficient freight transportation to ensure our products are able to compete nationally and internationally. The proposed regulations would require railroads to provide competitors with access to their private rail lines, compromising the efficiency of the national rail system by slowing the overall movement of goods in Washington and across the nation.This policy is a dramatic step backwards from today's sound regulatory system,which protects a nationwide freight rail network that businesses rely on to meet customer requirements. Forced access regulations would likely jumpstart a chain reaction in the network that constricts business activity by slowing the movement of goods in our state and across the country.This is not only detrimental for the U.S.railroad network,but is also unfair to the businesses,small and large,that form the backbone of the American economy. When those businesses suffer, so do the local communities that surround them.The affordable and reliable movement of goods is important for our region as well as the entire state. Washington's economy is twice as dependent on exports than the national average. It is worth noting that unlike other transportation modes, freight railroads pay their own way and operate a self-sufficient private network that reduces the burden on our roads and bridges by removing several hundred truckloads from our congested highways with each train trip. I urge you to carefully monitor the potentially disruptive proposed regulations under consideration at the STB and the impact they would have on businesses in the Yakima Valley and across the nation.Thank you for your attention to this matter. Sincerely, 7 January 15, 2019 The Honorable Patty Murray 154 Russell SOB Washington, DC 20510 Dear Senator Murray, We would like to convey our concerns about federal government actions that could undercut private sector investment in the freight rail industry.These include the Surface Transportation Board's (STB) proposed regulations known as "forced access," which would undermine the resilience of our state and regional economy by diminishing the strength of the rail industry. It is critically important that businesses have reliable and uninterrupted access to efficient freight transportation to ensure our products are able to compete nationally and internationally. The proposed regulations would require railroads to provide competitors with access to their private rail lines, compromising the efficiency of the national rail system by slowing the overall movement of goods in Washington and across the nation.This policy is a dramatic step backwards from today's sound regulatory system, which protects a nationwide freight rail network that businesses rely on to meet customer requirements. Forced access regulations would likely jumpstart a chain reaction in the network that constricts business activity by slowing the movement of goods in our state and across the country.This is not only detrimental for the U.S.railroad network,but is also unfair to the businesses,small and large,that form the backbone of the American economy. When those businesses suffer,so do the local communities that surround them. The affordable and reliable movement of goods is important for our region as well as the entire state.Washington's economy is twice as dependent on exports than the national average. It is worth noting that unlike other transportation modes,freight railroads pay their own way and operate a self-sufficient private network that reduces the burden on our roads and bridges by removing several hundred truckloads from our congested highways with each train trip. I urge you to carefully monitor the potentially disruptive proposed regulations under consideration at the STB and the impact they would have on businesses in the Yakima Valley and across the nation.Thank you for your attention to this matter. Sincerely, 8 January 15, 2019 The Honorable Dan Newhouse 1318 Longworth HOB Washington, DC 20515 Dear Representative Newhouse, We would like to convey our concerns about federal government actions that could undercut private sector investment in the freight rail industry. These include the Surface Transportation Board's (STB) proposed regulations known as "forced access,"which would undermine the resilience of our state and regional economy by diminishing the strength of the rail industry. It is critically important that businesses have reliable and uninterrupted access to efficient freight transportation to ensure our products are able to compete nationally and internationally. The proposed regulations would require railroads to provide competitors with access to their private rail lines, compromising the efficiency of the national rail system by slowing the overall movement of goods in Washington and across the nation. This policy is a dramatic step backwards from today's sound regulatory system,which protects a nationwide freight rail network that businesses rely on to meet customer requirements. Forced access regulations would likely jumpstart a chain reaction in the network that constricts business activity by slowing the movement of goods in our state and across the country.This is not only detrimental for the U.S.railroad network,but is also unfair to the businesses, small and large,that form the backbone of the American economy. When those businesses suffer,so do the local communities that surround them.The affordable and reliable movement of goods is important for our region as well as the entire state.Washington's economy is twice as dependent on exports than the national average. It is worth noting that unlike other transportation modes, freight railroads pay their own way and operate a self-sufficient private network that reduces the burden on our roads and bridges by removing several hundred truckloads from our congested highways with each train trip. I urge you to carefully monitor the potentially disruptive proposed regulations under consideration at the STB and the impact they would have on businesses in the Yakima Valley and across the nation.Thank you for your attention to this matter. Sincerely, n A RESOLUTION Bv the Yakima City Council of the State mfWashington VVHER|EAS, businesses and cmrnnnWnibeo across Washington have o long history of utilizing the private freight rail network to bolster our mtate'a economy; and VVHEREAS, ovve||-mmaintained transportation infrastructure mym1ern ia critical U» meeting the needs of our city and the mt81e'a residents and businesses; and WHEREAS, unlike other modes of transportation, freight railroads operate almost exclusively on infrastructure they own, bui|d, maintain and pay for themselves, saving taxpayers billions of dollars each year; and WHEREAS, encouraging private investments ininfrastructure provides for the long-term viability of Washington's business community; and WHEREAS, businesses large and anna|| rely on svvift, predictable shipping options to meet their customers' needs and compete on a global level; and WHEREAS, The U.S Surface Transportation Board's proposed 'forced @ncemm^ na0u|o1ionm could undermine the resilience of our regional and state economy by diminishing the strength of the rail industry and slowing down the movement of goods and passengers; and WHEREAS, we urge our leaders in Congress to monitor and oppose policies under consideration by the U.S' Surface Transportation Board that disrupt the free flow ofgoods and constrict the railroad's ability to neinwam1 in the private n3i| network; and ' BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAK|MA: The City Council and Mayor oppose proposed federal forced access regulations and any other mneomunm that would undercut private sector investment in the freight noi| network. ADOPTED BY THE CITY COUNCIL this 15th day of January, 2019. ATTEST: Kathy Coffey, Mayor Sonya C|earTee' Qh/ Clerk � 10 - M �� ^ Cliff From: Nate Kaplan <nkaplan@gorai|org^ = Sent: Tuesday, November 27' 2018zk2SPK4 To: Mendez, Carmen; Moore, Cliff, Cortez, Ana Subject: GoRai| Follow Up Attachments: STB K4u|tiSignerLetteLa\| signem.pdf; Balanced Regulation Issue Paper.pdf Council Member Mendez, Cliff, and Ana: � |t was a real pleasure meeting each of you this morning. And thank you for letting me share some insight on what the freight rail industry iafocused on fmrZ019, and explain the serious challenges faced if the US Surface Transportation Board (STB) decides to re-regulate freight railroad routes and rates, aka FmrcedAccess. To recap, Congress has objected to Forced Access several times in the past because it is known that this regulatory overreach will hinder freight rail's economic growth and efficiency in turn harming the logistics chain and freight mobility in Washington and across the country. Nearly OOOorganizations and elected officials across the country have written or signed-on to letters to Congress opposing Forced Access, and we would love to have the City of Yakima's support since a vote by the 5-member STB Commission will likely occur early next year. Here's more background on the policy: O. Here i38 link tO .UPS `to Forced Access; and here is a Point/Counter-Point from GoRail's president a A short video from Association of American Railroads explaining the policy's operational impacts O. Link to the actual legal rule-making notice in the federal register (Published in August, ) // / / /O l6-17g8O/petitimn-hopru|emaking- O. Group letter we sent last year opposing Forced Access with approxirnate|y5OO signers from across the country—about 1OO additional letters have been sent since (attached) O. Balanced Regulation 1'pager (attached) As discussed, I prepared the attached draft letters for your consideration opposing Forced Access addressed to Washington's congressional delegation (and [C'ing our two senators Senator Patty Murray, 154 Russell 3O8, Washington DC2O51O; Senator Maria Cantwell 511 Hart SOB, Washington DC3O5l0). Please feel free to edit these letters however you'd like, but | thought this vvVu|d be a good start. ^ Please always let me know if there's anything I can do to help you and the City now or in the future. I'll be connecting you with BNSF on a separate email regarding the at-grade crossing. Thanks again! Nate ~ p.s—Follow us @GoRail for fun and accurate info about transportation and infrastructure! _ Nate Kaplan West Coast State Director GORA|L 1 110 423 3rd St SW, Ste 940 VVashington, 'DC 20024 _- 202.908.3230 Eorai .orb November 16, 2017 The Honorable John Thuile Chairman, Committee on Commerce, Science and 'Transportation United States Senate Washington, DC 20510 The honorable Bill Nelson Ranking Member, Committee on Commerce, Science and Transportation United State Senate Washington, DC 20510 The l lonorable Bill Shuster Chairman, Committee on Transportation and Infrastructure United States IIouse of Representatives Washington, DC 20515 The Honorable Peter DeFazio Ranking Member, Committee on'Transportation and Infrastructure United States I Iouse of Representatives Washington, DC 20515 Dear Chairman Thune, Ranking Member Nelson, Chairman Shuster and Ranking Member DeFazio: The U.S. Surface Transportation Board (ST'B) continues to consider new regulations on freight railroads that stand to harm our economy, consumers and thousands of farms, factories, mines and other businesses that rely on freight rail. The proposed regulations represent a dramatic step backward from the balanced regulatory system that is working today by providing a regulatory benefit to some shippers at the expense of the efficiency of the entire network. These new regulations would undermine the ability of railroads to reinvest capital in the rail network thus imperiling local rail service for most shippers and communities. At a time when the nation is looking to leverage private investment in infrastructure more than ever and is counting on efficient and safe transportation to facilitate economic growth, Congress should ensure that regulators leave railroads free to invest and innovate to better serve customers and the nation. We represent communities and companies across the country that know well the public benefits of private freight rail investment. Freight railroads are the only transportation mode that pays for its own infrastructure with almost no government support. This saves taxpayers money while also keeping freight off already crowded and underfunded highway infrastructure. And, every ton of 1 12 freight moving by rail rather than by highway means less fuel was consumed for the move and fewer pollutants were emitted. Most importantly, the massive private investments made by freight railroads connect local farms, companies and mines to markets across the country and world. In 2014 alone, private railroad investments generated $274 billion in economic activity and supported 1.5 million jobs nationwide. This mean jobs for our companies and a powerful catalyst for economic development in our communities, Contrary to the assertions of interest groups promoting these unnecessary new federal regulations, the proposals would be extremely damaging to rail-served communities and businesses. The proposed new regulations would force railroads to open their privately-owned networks to competitors by turning over traffic to other railroads, potentially at below-market rates and without any showing of competitive abuse. The proposals undermine existing free market competition and replace it with a regulatory scheme that runs directly counter to the balanced and effective regulatory framework set by Congress in the Stal!ers Rail Act of 1980,which ushered in a freight rail renaissance in America. This is a classic case of regulatory overreach. Congress did not ask the STB to take any of these steps when it reauthorized the Board in 2015 and,in fact, these proposals have been previously rejected by Congress 16 times, and for good reason. They would limit railroads' ability to earn enough capital to reinvest in their networks,making the national freight rail system less efficient,less safe and less productive. At a time when the country is considering massive infrastructure investments to spur economic growth, freight railroads provide a shining example of the power of private investment. We need to support freight railroads' ability to invest to continue to relieve pressure on the highway system and to support the still-recovering economy. In that context, these actions by the STB make no sense. Please preserve the existing smart, balanced regulatory system that protects shippers while allowing railroads to invest. Sincerely, Monroe Jones Billy Ainsworth President President& CEO Birmingham Rail&Loco. Co., Inc. (AL) Progress Rail (AL) Corbett Bennington Josh Curtis Director of Planning Governmental Affairs Director City of Anniston (AL) Arkansas Association of Counties Allen Blythe Johnathan Dismang President Senator Ferrovia Services, LLC (AL) Arkansas General Assembly Knox Kershaw Michelle Gray CEO Represenative Knox Kershaw, Inc. (AL) Arkansas General Assembly 2 bt4 St .. .,x„ v:.w: x'p s!vYsq,F13 .:..... =oIiikg . . : 0..0.. ri :r © Prior to 1980,the nation's rail infrastructure was crumbling. Today,U.S,freight railroads are the most efficient andproductive in the world. � . Just 35 years ago,however,railroads were on the brink of co apse because outdated and overly stringent government regulation had crippled their ability to ...•.,• ,�s.�ga� • °" • - x operate effectively and profitably. a:a.:.: "_:::ir.rt<..... •More than 20 percent of the country's railroad miles were operated by 4.:'..iiiM • I d bankruptcy, rai roa sin v.ry:v.T o'r x;v.... v t �. ...N.::v M...... r v v..... wy. ,>� �> r= 'x'`: � r Rail rates were rising faster than inflation,and the rail market share for ww......v :.:. ::r'Y,;.7. ,, ... .x� #n�„ �A,., '`" freight shriveled as more and more shippers turned to trucks. xv w.vv.. :sr Y.: .. Y ,''::,.w. w:.. vv: rvw w.v.7 v w:. vwv... vNe::'��.zt�{lv. '...:. ' � �5 .}}�x• .+ kry ak d,...:. vr::=::r . ,7Y., rw r.=:r..Y r r..r : x The Staggers Act created smart, balanced regulations. vw...:.vg w.. a n.....v „x>:.:=- ar In 1980,Congress passed the Staggers Rail Act,creating.a balanced regulatory v ...y�.......v...w.. xk M :x. 999 9 ...vvy......v rv. v... xx`%,t.x,. .: r:.::..:.. � tvm::::=rr:v ,�; yr'?�r.......:�,:��x��•,•x.M:....r�.;..:.:MArm' system that still exists today.Shippers are protected against unreasonable '.: Y1..'4;•:*; y.r x�"az?.;•' railroad conduct while railroads can largely decide for themselves how to ,:... manage their assets andprice their services. t ,ma . y::.:.::: ty •:. � a e r' ':y',f..5".t: .:. fax ,:.....;: v:. :. r w. � v.t .. r,; ::.' ., 41' x'; : Improved profitabilityhas allowed freight railroads to pour$600 billion � ?•�.fir ,,;,a'' &xF.ai>:... P g �i,l .:. Altilagiigh a.Y.�. k+ •i.1';:.:.;; of their own funds back into their systems to create a network that is .. ..5 imd�:.::.:.. .. ..ri! * vi,, >r' second to none in the world. ': •Average inflation-adjusted rail rates are down 43 percent since 1980, :..a..:w.41$6v.......; ry:y�: �w.1:r v ::...v.: `. ,µt_�AA ,MA�+'x; saving rail customers,and ultimately U.S.consumers,hundreds of billions rr. xr s'^ry of dollars over thisperiod. a. v. i. ::::vrr;;45::'.l.:r..rv:w:.,...' :ig;,. ,..+:.::. .: lowest in ;;... •.v •Railroads are safer; train accident rate i 1 2014 was the Wthe ggr ' "'"" � x'r�� ;::w: "� � •x history and dawn 8percent since Staggers waspassed. _x.�aa:... ... ....... x,. x..;�.-:.. . . or 0a e a ••• - -- 0. •Overall industry productivity was flat for many years prior to Staggers, but is up 139 percent since then. . ':' >: r' ,,,,. •Hundreds of short line and regional railroads formed since Sta ers '. . .:, ; . preserving rail service and rail jobs that otherwise would have been lost« • P:s ..''V.I'll:. IY.:.n • ay _ ... «rya ... .. . :. 'k+ , ' *?i i w. :?,?Y; - r;Yx...>,,x � ty•A �. ..aa, ,�;.MHkw U.S. FREIGHT RAILROAD PERFORMANCESINCE SI.................E.....STAGG ERS ,axe . t:. . 'a a 4ti,L ; ;t am.am.'.• �r, +r.tr A.xR;i ` "7 �.«, • Staggers Act Passed #oducUWty: . ; a4g'•. • >-a,�.{', 300 ....... .................. ................ -.. ,..:,^' ; ,.';•Y^ ....� •• 275 Oct.1880 250 ter•' :t.y@'A"..'.Q.,. 0ya ? v ,Y4{,.—`*,.ti £° ,r.-'a- « 225 ........._ ......... ... ... .... .... ..............................._.........�....m........m. ..^ • ,.:, ...:..t +•,:,-•' .Y@-x..t f,'-,,Ri -y....' 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'64 '67 '70 '74 '76 '62 "86 '90 '94 '98 '02 '06 '10 '14 ^ �P `-y."i0* ::..+ M k.x,, :• u o.aA ' r @go ai t '.' ?.: ..,,f i ryrrw.'x GORAIL Twitter r ..v ... yy".✓ T,. ..a, ... ... a Wa. a. .... * l � 11n<e m.cst 0 1 Y/g ra r gora •" _�„—= act ocs aam r ,M^' m c m tin :.„y/) }t r, 14 (if) ASSOCIATION OF AMERICAN RAILROADS November 13, 2018 } Dear Newly Elected Members of Congress: Congratulations on your recent election to Congress.As you transition from campaigning to governing, the nation's private freight railroad industry— the linchpin of our integrated national infrastructure system —wants to provide key facts surrounding our business and outline some key policy positions. Congress will examine the nation's infrastructure next year, including through surface transportation reauthorization,needed by the end of fiscal year 2020. Freight railroads,which provide safe and efficient transportation for nearly every industrial, wholesale,retail,and resource-based sector of the economy,are central to this discussion. We play a crucial role in maintaining Americans' quality of life: moving the fertilizers used to grow crops,cars that move workers and families, materials to build homes and businesses,and chemicals used to purify drinking water. hi 2017 alone,the sector generated roughly $219 billion in economic activity while supporting 1.1 million jobs. Our industry is fueled by private investment, averaging$27 billion in recent years. We stand in stark contrast to publicly funded infrastructure systems such as highways,which face a backlog of$740 billion in repairs,or the infrastructure crises plaguing our country's transit systems. Facts about the freight rail industry, which operates on a 140,000-mile network it owns and maintains: • Safe: Based on federal data for 2017 across key measures—including train accident rate and employee safety— recent years have been the safest in the industry's nearly 200-year history. Last year marked the lowest rate of track-caused accidents ever,while the overall train accident rate is down 23%since 2008, The industry transports critical hazardous materials—including plastics, fertilizers,and other chemicals—to their destination without release due to accident 99.999%of the time. All the while, railroads train 20,000 first responders annually and make the Ask Rail mobile application available to first responders and law enforcement officials who need to access information on rail contents traversing their territory. • Future-focused: Private freight carriers are implementing Positive Train Control (PTC), which will help stop a train before certain types of human-caused accidents occur. A host of innovations, such as unmanned drones and a nationwide network of wayside detectors using technology like radar and ultrasound, allow railroads to evaluate infrastructure conditions and inspect equipment with greater precision and frequency. Technologies increasingly enable the industry to identify problems before they arise,ultimately improving the safety and efficiency of the rail system. • Economically critical: One job in the rail sector supports eight others across the economy, as the industry is tethered to essential job creators- logistics,warehousing,fanning,and manufacturing— through reliable and affordable transportation. Adjusted for inflation,average U.S, freight rail rates were 46%lower in 2017 than in 1981. • Environmentally friendly: The most sustainable way to move goods on land, a freight train moves a ton of freight 479 miles on one gallon of fuel on average. Moving goods by rail instead of truck reduces greenhouse gas emissions by an average of 75%. 1 15 • Trade enabler: Global commerce is tied to 42%of rail traffic and 50,000 domestic rail jobs,worth $5.5 billion in annual wages and benefits. Railroads haul roughly 33%of U.S. exports, allowing U.S. industries to compete abroad. Together with trucks and barges, freight trains help move an average 54 tons of goods per American each year. • Committed to its workforce: In 2017,private freight railroads employed roughly 170,000 people— 82%of which are unionized—earning $125,400 per year on average in total compensation. Through collective bargaining,the industry works with labor to forge healthcare, retirement, and compensation packages ranked in the top 5%of U.S. industries. Policy recommendations: • Sensible economic re .ulation: Congress partially deregulated the private freight railroad industry in 1980 after years of discord, allowing the industry more freedom to make routing and pricing decisions dictated by market conditions. Strong gains in private investment have followed, correlating with marked improvements in safety, service, and competitive rail rates. The Surface Transportation Board(STB),the independent agency with oversight of rail economic dealings granted by Congress— including mediation and adjudication with rail shippers—remains critical in ensuring the health and viability of the freight rail network.The STB must maintain the current regulatory framework,which balances the needs of both railroads and shippers, and not implement wholesale changes that would compromise the ability of railroads to earn the revenue needed to reinvest in the network and meet customer demand. Congress, which reauthorized the STB in 2015 and avoided major policy changes in doing so, should maintain proper oversight to ensure its critical directive is not circumvented. • User-funded infrastructure: Commercial trucking is the biggest customer of the private freight rail industry and its biggest competitor.Ample research shows large trucks fail to pay for the damage they inflict on roads,bridges, and highways. This underpayment puts the rail sector—which fully covers its costs, reduces emissions,and lessens traffic—at a competitive disadvantage, but also contributes significantly to the insolvency of the Highway Trust Fund,which has required $143 billion in general taxpayer funds in the last 10 years. Federal infrastructure policy should remedy this fundamental imbalance by ensuring users of infrastructure pay for their use, which could be done through a host of mechanisms, such as a Vehicles Miles Traveled (VMT) fee.This could be applied to commercial vehicles to account for distance traveled and the weight of freight-carrying trucks. • Pro-innovation policy: Freight railroads increasingly test and deploy new technologies to bolster safety and efficiency. Ideal oversight in this area should be federal to avoid a patchwork of state directives—thus hindering interstate commerce —and should position railroads on equal footing with their transportation peers. Regulations from the U.S. Department of Transportation and laws from Congress should favor technological improvements and center on demonstrated outcomes— such as improving safety in a specific area. Lawmakers should avoid one-size-fits-all policies that hinder modernization destined to improve safety, including policies that mandate specific operating models. We thank you for your time and consideration and look forward to future discussions. Sincerely, Ian Jefferies Senior Vice President of Government Affairs and incoming (Jan. 2019) President and CEO Association American of Railroads 2