Rail Policy

California’s proposed CARB rules for rail are a costly tax on consumers

July 8, 2024
By Yaël Ossowski
In Press Release, Rail Policy, Transportation
0 comments

Washington, D.C. – Tomorrow, the US House Transportation Committee will hold a hearing on the status of the California Air Resources Board’s (CARB) In Use Locomotive Regulation. The Environmental Protection Agency is due to issue a waiver to allow the state to proceed with this plan.

State regulators want to mandate unreasonable climate standards on rail cars, as well as mandatory spending accounts that will end up costing both rail firms and the consumers who rely on them to transport their goods. This will further inflate prices across the economy while providing no useful benefits for the climate or consumers.

Yaël Ossowski of the Consumer Choice Center recently authored a policy primer on “The Consumer Case for Reimagining and Innovating Railroad Policy” with several policy suggestions for modernizing state and federal rules on rail firms.

He had this to say about the upcoming hearing in Congress, “We desperately need to think beyond emissions mandates and caps as a way to regulate vital industries that power our economy, and luckily Congress recognizes this. There are more innovative ways to craft railroad policy for the 21st century beyond punitive and unworkable mandates that force climate agendas without understanding how they impact consumers of modest means. We should respect the principles of technology neutrality and innovation that will help speed along an energy transition faster than rules from bureaucracies. The rule as proposed by California’s environmental regulators, would do the opposite.”

In regulatory comments provided to the EPA, the Consumer Choice Center made the case against the California rule that would have ripple effects on the entire economy.

“Beyond the dubious legal and jurisdictional circumstances that propel this proposed state regulation,” said Yaël Ossowski, “We believe it would also serve to negatively harm consumers who will suffer from higher prices on end goods, fewer innovations in transportation generally because of the massive compliance costs, and would end up acquiescing most of our nation’s environmental policies to a few partisan regulators in our most populous state – policies that do more harm than good.”

The Consumer Choice Center recently published a policy primer that examines similar regulations proposed at the federal level that would also undermine innovation in the rail sector and likely result in higher costs of transportation that would be passed onto consumers.

“Rather than impose unworkable and costly environmental regulations on railroads, Americans deserve innovative railroad policies that increase competition, generate investment, and ensure that lower costs can be passed down to consumers who rely on rail for their homes and businesses.

The current framework of the California Air Resources Board’s locomotive rules stands against the principles of consumer choice, innovation, and the American system of competition. We are glad Congress will now have the opportunity to examine it as well.”

About the Consumer Choice Center:

The Consumer Choice Center is a non-profit organization dedicated to defending the rights of consumers around the world. Our mission is to promote freedom of choice, healthy competition, and evidence-based policies that benefit consumers. We work to ensure that consumers have access to a variety of quality products and services and can make informed decisions about their lifestyle and consumption.

Find out more at www.consumerchoicecenter.org

Read Consumer Choice Center’s comment to the EPA

Is California using climate rules to regulate trains out of existence?

The State of California has a unique point of view on the future of private rail transportation. Environmental regulators in the Golden State are seeking to impose an industry-wide transition plan for locomotives, forcing them to switch to “emission-free” trains within a time span of just over ten years.

That’s the scope of a rule passed by the California Air Resources Board, called In-Use Locomotive Regulation, forcing rail firms that pass through the state to switch to mostly electric train cars by the year 2035 in order to “achieve emission reductions from diesel-powered locomotives.”

Considering the market for emission-free locomotives is, at present, nonexistent, this rule attempts to speed up the entrepreneurial process for developing alternative energy sources for the trains that power a large proportion of the American transportation economy.

This same rule would also require rail firms that operate in California to set funds aside in a mandated “Spending Account” that will be presumably used for some level of environmental compliance.

While that effort may be in earnest, it will likely end up costing both rail firms and the consumers that rely on those firms to transport their goods dearly, driving up prices across the economy while providing no useful benefits for the climate nor consumers.

In staking out the regulatory path for this rule, we must ask whether the State of California is using climate rules to regulate trains out of existence?

As an organization, the Consumer Choice Center is deeply concerned with how regulatory changes impact consumers for better or worse and add to the mounting cost of living when Americans buy both goods and services.

We believe there are more innovative ways to craft railroad policy in our nation in a way that will provide better dividends, lower prices, and more savings to consumers, all while respecting the principle of technology neutrality and innovation that will help speed along an energy transition.

The rule as proposed by California’s environmental regulators, however, would do the opposite.

This was the comment we provided to the Environmental Protection Agency (see below), which must consider the CARB’s rule before it can be finally authorized and adopted, according to the guidelines provides by the federal Clear Air Act. We also provided comment on a coalition letter with a group of other taxpayer, consumer, and nonprofit organizations.

Because the regulation imposes significant costs on rail firms, and because California happens to be the most populous state, it is likely that such a rule would have wide ripples throughout the country, and we therefore encourage the EPA to reject the waiver sought by state regulators.

Beyond the dubious legal and jurisdictional circumstances that propel this proposed state regulation, we believe it would also serve to negatively harm consumers who will suffer from higher prices on end goods, fewer innovations in transportation generally because of the massive compliance costs, and would end up acquiescing most of our nation’s environmental policies to a few partisan regulators in our most populous state – policies that do more harm than good.
“US consumers don’t deserve California-imposed regulations that raise the prices of their goods”

In the 21st century, railroads still remain an integral part of the domestic consumer economy, moving over 1.6 billion tons of commodities and goods between ports, factories, and warehouses. While container ships may bring raw materials and products to ports, freight rail is used to transport those items to trucking centers or distribution hubs before they make their final trajectory.

These “middle miles” for commodities and finished products we buy both online and in stores mean that millions of American consumers depend on a highly competitive, efficient, and productive freight rail industry to get products in our homes and businesses.

While competition for transportation of both raw and finished goods is intense – whether it be by trucking, rail, or air freight – the existing restrictions and bureaucratic requirements imposed on freight rail firms have subjected the industry and those who depend on it to an unpredictable regulatory regime and enforcement more akin to central planning than a robust system of free enterprise.

The regulation sought by the CARB would not only undermine progress in competition in transportation, but it would also allow state regulators to pick the winners and losers in nation-wide transportation.

The CARB’s regulation would require “emission-free” locomotive trains by the next decade, something that is not yet feasible nor even possible. It would also require different rail firms to purchase entirely new fleets of trains that would fit these stringent rules, representing costs of billions of dollars throughout the economy that will inevitably be passed on to shipping clients and the consumers that depend on the products to be shipped. This would represent a direct tax on consumers without a measurable climate goal, which should be reason enough to reject this proposal.

There is little to no evidence that forcing newly built trains will somehow make a measurable difference in the fight against climate change, especially considering that rail represents one of the transportation industries with the lowest CO2 emissions, and is constantly improving on its own and by its own incentives. Such a rule elevates government-directed innovation over market-based innovation, and would likely end up being much more costly without discernible results for the climate.

What’s more, the California rule would require rail firms to commit to the bizarre funding of “spending accounts” in order to comply with future environmental regulations. Instead of investing in more efficient and affordable transport that can carry savings on to consumers who rely on shipped goods, companies would be required to set aside money directly in response to new regulations not yet written.

This is not only an extralegal requirement to put on private business, but it would also be a dangerous precedent for the regulation of any industry, especially one that is relied upon by millions of Americans. Interstate commerce, represented by rail firms, trucking, and even aviation, should not be required to follow additional costly mandates by one particular state in contravention of our Constitution.

Rather than impose unworkable and costly environmental regulations on railroads, Americans deserve innovative railroad policies that increase competition, generate investment, and ensure that lower costs can be passed down to consumers who rely on rail for their homes and businesses.

The current framework of the California Air Resources Board’s locomotive rules stands against the principles of consumer choice, innovation, and the American system of competition.

For the sake of all consumers, we hope the EPA rejects this waiver and does right by Americans who deserve better rules and regulations to address their way of life.

Read Consumer Choice Center’s comment to the EPA

Ranked and rated: Europe’s best and worst countries for train travel

All travellers like trains. European travellers love them. An InterRail trip is a rite of passage that stays in the memory. The Eurostar is to millennials what boat trains were for Gen X: a portal to an entire continent. European railway stations – usually prominent, often palatial – suggest history and romance. They feature in classic films, novels and music. In a climate-conscious world, railways remain the greenest alternative. They are safer and cause less stress than driving. For anyone keen to see the world, is there any better place than beside a train window?

So, with this in mind, we’ve taken the rail networks of Europe’s 15 largest (open) countries to task, rating each one on the factors that matter most. Read on to find out which ailing national networks are best avoided (and those with a highlight that’s nevertheless worth the hassle), and which are the finest options for a successful rail-based escape – whether it be your next spring city break, or a glorious weeks-long odyssey that snakes from coast to countryside.

15. Greece

Bringing up the rear in our ranking is this snaking country of jagged coasts, islands, mountains and peninsulas, which has never quite made the railways work for its people. There are trains every few hours linking Athens and Thessaloniki (under five hours), but much of the timetable is spattered with dreaded rail replacement buses. Floods in 2023 have led to a near collapse of the network. Toy trains operate in some touristy areas, such as the Odontotos rack railway – though that was recently stopped by landslides. Athens used to luxuriate in services to Berlin and was once a branch of the Orient Express. There were trains to Turkey via Pythio and North Macedonia via Idomeni. The pandemic shut down what was already a dwindling service and international lines to Sofia, Skopje and Bucharest remain closed. Athens has the most underwhelming main station of any country in Europe – which sort of sums things up.

Read the full text here

John Oliver’s backward solutions for freight rail fail the American people

January 22, 2024
By Yaël Ossowski
In Rail Policy, Recent Media, Transportation
0 comments

Dressed up as comedy, John Oliver dedicated an entire segment of his “Last Week Tonight” HBO program to focus on the ills of America’s freight rail industry.

A self-professed train aficionado, Oliver had choice words for our commercial railroads on the matter of dangerous cargo loads, labor concerns, and an overall lackluster attention to safety. However, he doesn’t compare the industry to the troublesome safety records of the trucking or pipeline industries, which also face similar issues in transporting hazardous goods. In the end, Oliver’s analysis points predictably toward government regulation as a would-be savior of the rail industry.

As is usually the case in a John Oliver monologue on rather niche public policy, there is one blaring fact that Oliver neglects to mention: Unlike other industries, private train companies are required by law to carry anything and everything that customers may bring their way. It’s a policy known as the common carrier obligation.

The common carrier obligation, a cornerstone of the freight rail industry, is often hailed as a mechanism to ensure fairness and accessibility to American railways. However, a closer look reveals that this regulatory mandate, intended to benefit the public, may inadvertently impose significant costs on consumers. The seemingly noble commitment to nondiscrimination and universal service is, in reality, a double-edged sword that hinders efficiency and drives up prices for the very consumers it aims to protect.

In telecommunications, it is similar to the Title II classification we know as net neutrality, which would force Internet Service Providers to treat all internet traffic as equal while boosting the bureaucracy around its enforcement. This principle is rooted in the idea of promoting fair competition and preventing monopolistic practices. However, the unintended consequence of this method of regulation translates into a heavier financial burden on consumers.

To maintain a level playing field and ensure fair treatment for all shippers, regulatory bodies often scrutinize rate-setting practices. This scrutiny stifles the ability of railroads to adjust rates in response to market conditions and operational costs. As a result, rail companies find themselves hamstrung by regulations, unable to adopt competitive pricing strategies that would ultimately benefit consumers by prioritizing efficiency and timeliness.

Mandatory nondiscriminatory services mean that rail companies must accommodate a wide array of shipping demands, leading to potential congestion and logistical challenges — the same ones Oliver lamented in his segment. The government is already highly involved in rail policy. That’s the problem.

The Reliable Rail Service Act (S. 2071), penned by Sens. Tammy Baldwin (D-Wis.) and Roger Marshall (R-Kan.), is just another example of a well-intentioned policy that risks stifling the very dynamism within the industry that it seeks to create. The fact of the matter is, it’s been over a hundred years and U.S. lawmakers have yet to try a regulatory scheme that reduces mandates and micromanagement of rail. It’s way past time to reassess the common carrier obligation imposed on rail companies.

Simplifying or outright eliminating this requirement would empower rail companies to operate with greater flexibility and pursue the kind of safer practices that John Oliver no doubt wishes to see adopted. It’s harder to prioritize safe loads when the law requires rail companies to carry everything thrown at them.

Baldwin and Marshall’s Senate colleagues should reject the Reliable Rail Service Act. Less central planning would go a long way toward improving the industry.

Another pivotal piece of the puzzle is the regulatory structure for the Surface Transportation Board. The STB Reauthorization Act should be revisited to clarify the board’s role, emphasizing its position as a remedial agency tasked with dispute resolution and the promotion of a competitive environment. This revision would curtail the STB’s tendency to formulate its own policies and create a regulatory status quo that is more harmonious between government oversight and private sector innovation.

A new year approaches, and with it a fresh opportunity for a paradigm shift within the U.S. freight rail industry. John Oliver was right to point out all the shortcomings of rail, but we have yet to try a 21st-century approach to regulation that sets the industry free to innovate. On our current trajectory, freight rail will continue to look and function like a relic of the past.

Consumers have deserved better for a long time.

Originally published here

RELEASE: The Consumer Case for Reimagining and Innovating Railroad Policy

November 9, 2023
By Yaël Ossowski
In Press Release, Rail Policy, Transportation
0 comments

FOR IMMEDIATE RELEASE | November 9, 2023

The Consumer Case for Reimagining and Innovating Railroad Policy

WASHINGTON, D.C. – Today, the global consumer advocacy group Consumer Choice Center launched a policy primer on how best to reimagine and innovate public policy for freight rail in the United States.

The primer includes several key policy suggestions for legislators to help improve rail policy so that consumers can depend on affordable transportation for products they enjoy:

Oppose the Reliable Rail Service Act (S2071)
Congress should limit the common carrier obligation or eliminate it all together
Congress should amend the Surface Transportation Board Reauthorization Act to ensure the agency acts as a remedial agency and does not create its own policy

Yaël Ossowski, deputy director of the Consumer Choice Center, explains:

“As we’ve seen with US tech companies and the Federal Trade Commission or Internet service providers and the Federal Communications Commission, our federal regulatory agencies are taking a much more active role in enforcing various policy desires – in a way that is proving detrimental to consumers.

“The same is happening in the area of freight rail policy, where the Surface Transportation Board is abusing its authority by unjustly expanding its enforcement of common carrier obligations in a way that ends up raising prices for transportation of goods that consumers rely on,” said Ossowski.

“Decades after piecemeal freight rail reform, the STB has been wielding much more control over the economic decisions of rail carriers and their customers, using jawboning, rhetorical threats, and exploratory rule-making to make their presence known.

“This threatens both innovation and innovation in rail transportation, which remains a key “middle mover” of goods that end up on our doorsteps and in our businesses.

“We propose a series of smart policy reforms to reimagine rail policy, highlighting the need for entrepreneurship and investment to lead us to better solutions, not top-down policy that is leading to higher transportation costs that end up reflecting in the goods we buy.

“These reforms aim to increase competition, generate investment, and ensure that lower costs can be passed down to consumers who rely on rail transportation for their products we use in our homes and businesses,” concluded Ossowski.

READ THE PRIMER HERE

Contact

Yaël Ossowski, Deputy Director

yael@consumerchoicecenter.org

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, Lima, Brasilia, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

Are we thinking correctly about rail passenger rights?

March 23, 2021
By Bill Wirtz
In Rail Policy, Recent Media, Transportation
0 comments

“Rail passenger rights” are paid by consumers…

The European Parliament’s TRAN committee recently approved new rail passenger rights legislation. With this new text, rail companies will be obligated to re-route passengers for delays of more than 100 minutes, provide bike racks, and assure “through-ticketing” under a single operator. This last requirement means that passengers will be eligible for the right of arriving at their final ticket destinations and that consumer rights requirements do not only apply to one leg of the journey. In essence, if you’re taking a Deutsche Bahn ticket from Cologne via Frankfurt to Munich, and start the journey with a delay in Cologne, then DB will be required to get you to your final destination no matter what.

The conversation about rail passenger rights is somewhat similar to that of air passenger rights, drawing the distinction between reimbursement rules and rights to active services. If a company fails to fulfil the service that the customer purchased, then from a mere contractual obligation, the customer ought to be able to choose between reimbursement and re-routing. However, adding additional layers such as compensation models and services on top of the existing services is not something that consumers should be burdened with.

An easy comparison for the purpose of this argument is that of a low-cost airline. Say you fly to a city for a short two-night trip, and you manage to pack all your belongings in a small personal item (like a backpack). With carriers such as RyanAir and EasyJet, you can get the lowest price in the cabin by choosing the most basic options, and sometimes flying to a regional airport that’s further away from the destination you’re trying to reach. Those wishing to get extra luggage, transport over-sized baggage, more spacious seats, airport lounge also pay additional fees for these privileges. We should not take the highest standard on the aircraft as the norm, and then derive that the basic options are somewhat “deprived” of these rights.

In contrast, the basic options are opt-outs of these services that some consumers simply don’t want or need. On more high-end airlines, some of these services are included in the price, but end up alienating consumers looking for a cheap fare.

The same approach should be taken in the domain of railway mobility. While bike racks are a convenient addition, they do prevent rail operators from selling more access to seats and bring additional financial burden that consumers will end up paying. For state operators running deficits, this is of no particular concern. However, with an increasing number of private rail operators, we cannot pretend as if these companies provide certain services out of mere altruism. If consumers choose certain services, they should be able to pick those services they really want. The same applies to insurances to reach the final destination: as the number of rail operators multiplies, so do the expectations for different service levels. Low-cost providers will make cheap tickets available, with fewer expectations of support in case of delays, while more high-end operators will make sure that customers enjoy the highest possible comfort. Adding to that, insurance companies, sometimes through credit and debit cards, can also offer certain insurances as complementary services.

Consumers aren’t a monolithic bloc. Some are students who instead of hitchhiking to a summer camp prefer the cheapest possible ticket, with the longest possible itinerary. These students have different expectations than the Brussels bubble business traveller, and they should not be penalised with ticket price hikes because of additional service and insurance requirements.

Originally published here.

Europe’s Year of Rail should be about competition

January 13, 2021
By lbertoletti
In Rail Policy, Recent Media, Transportation
0 comments

We need more rail competition through private competition.

The European Parliament recently approved 2021 to be the European Year of Rail, to promote rail as a sustainable and viable alternative to air travel or use a car.

European Commissioner for Transport Vălean said: “Our future mobility needs to be sustainable, safe, comfortable and affordable. Rail offers all of that and much more! The European Year of Rail gives us the opportunity to re-discover this mode of transport. Through a variety of actions, we will use this occasion to help rail realise its full potential. I invite all of you to be part of the European Year of Rail.”

However, while the European Union’s promotion of rail might be laudable, actual policy changes need to follow suit. In too many member states, incumbent state rail actors receive preferential treatment, either through years of subsidisation or through continued state participation. Europe is far from having a real free market in the rail sector, which leads to higher prices and more and more antiquated networks.

Rail privatisation would bring far greater efficiency to the transport of cargo, while also improving domestic passenger services, bringing lower fares and greater choice. In the Czech Republic, for example, the entrepreneur Leoš Novotný created Leo Express, a private rail company which is attempting to drive Czech trains into the 21st century.

In Germany, however, things have started to change. Federal states are now offering regional rail traffic to the best bidder. It’s not the ideal solution, but it has enabled prices to drop, even for the main provider Deutsch Bahn.

Many fear that rail privatisations lead to price gouging, yet there is little evidence for this. In the United Kingdom there has been, since 1995, only a 2.7 per cent increase in the average cost of a single journey. If you bear in mind that today’s trains run faster, have air-conditioning and loos that people actually don’t mind using, then ‘gouging’ is something of an overstatement.

Another viable alternative is the Italian model.

After several directives between the 1980s and the 1990s, the most important of which was the Directive 440/91/EC, several positive changes have occurred in the European Union. Between 2001 and 2016, the EU approved four legislative packages aiming at gradually opening up rail transport service market to competition, defining passengers’ rights about minimum quality standards, making national railway systems interoperable, and defining appropriate framework conditions for the development of a single European railway area. The Italian legislation enforcing these directives was not easy to implement, as in other European countries. Still, Italy was the first member state that proved successful in opening the HSR market to competition.

The new regime of competition began in April 2012, when the private company, Italo (managed by Nuovo Trasporto Viaggiatori), entered the market. The existing rail incumbent at that time, Frecciarossa, managed by Trenitalia, was wholly owned and operated by the national railway company Ferrovie dello Stato Italiane, a conglomerate holding of the railway sector including service, infrastructure, and transportation of goods, as required by European legislation concerning the separation between the infrastructure manager and the service operator.

As a result, we’ve seen a reduction in ticket prices of 41%, paired with an increase in demand of 90%. This makes Italy one of the best countries for high-speed rail use.

We can make viable changes to the European network, but we should refrain from believing that government investment alone can make this happen. On the contrary, we should look to the private sector to provide the means to reach our sustainable transport objectives.

Originally published here.

Europe’s best and worst railways revealed for train travel

Tourists are returning to the rails in ever greater numbers.

Particularly in Europe, the romance, sustainable credentials and economy of train travel has seen consecutive growth in passenger numbers for the past seven years.

And of course, every great journey must have a suitably grand start.

Like cathedrals of public transport, the giant railway stations of France, Germany and beyond are central to the experience. However, not all railway stations were created equal: for every Grand Stazione Milano Centrale there is a soulless terminus like Berlin’s Friedrichstrasse that can put a dampener on your trip.

To help travellers arrive on time and inspired, the European Railway Station Index has been compiled to rank the continent’s 50 largest stations, from best to worst.

Embarked upon by the Consumer Choice Centre, its railway inspectors have marked the public travel hubs on criteria including accessibility, cleanliness, signage and the connections available.

Read more here

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Benefits of Railway Competition: the Case of Italy

December 7, 2018
By Consumer Choice Center
In Infrastructure, Italy, Rail Policy, Transportation

By Prof. Andrea Giuricin and Dr. Roberto Tosatti INTRODUCTION The landscape in the railway industry has changed drastically in the last several years due to newfound competition in select markets, especially in Europe where the European Union made a great effort to issue directives on European market liberalisation within its Member States. Competition is well […]

Libéralisation du rail, vive la concurrence pour la SNCF!

April 13, 2018
By Bill Wirtz
In Français, Rail Policy, Recent Media, Transportation

L’OPINION: « Que représente ce « bien public » qu’est censé être la SNCF : avec plusieurs milliards de dette, un déficit structurel, des tickets chers, un service moyen, des grèves à perpétuité ? »

Le rail libéralisé: innovation nécessaire

November 6, 2017
By Bill Wirtz
In Belgium, Français, Rail Policy, Recent Media, Transportation
0 comments

LA LIBRE: La libéralisation ferroviaire apporte beaucoup plus d’efficacité au transport de marchandises et améliore les services pour les passagers, en réduisant les tarifs et en augmentant leurs choix.