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On December 11, OnTrackAmerica hosted another in a series of rail stakeholder dialogues, convening leaders from throughout the railroad industry and government, face-to-face. The purpose of that meeting, held at the U.S. Capitol Building, was to forward a process that integrates more stakeholder voices and perspectives, so that multi-stakeholder collaboration becomes institutionalized in the process of national transportation planning.
We explored the advantages of hearing and considering each other’s concerns and ideas. We utilized a dialogue process to identify new goals, uncover barriers, and develop action steps toward the adoption of a well-reasoned and widely-supported rail transportation plan that: 1) allows all stakeholder interests to be met to the greatest extent possible, 2) accommodates a doubling or tripling of North America’s utilization of its rail network, and 3) incorporates a vision for rail transportation that is consistent with then President-Elect Obama’s plans for more sustainable energy use.
Here is further background information.
As our new administration works to increase transportation investment, the plan cannot simply be to spend more on infrastructure. Investment of limited public- and private-sector dollars must now be integrated and targeted to provide real benefits to stakeholders and society.
We continue to observe the gap between the "theoretical" orientation of government policy thinking and the "reality" of private-sector business plans and agendas. This is particularly relevant as our governments hope to facilitate the expansion of our private-sector rail system.
The commitments and business plans of the Class I railroads have been understandably oriented around the interests of shareholders. However, recent financial market crises may present a compelling opportunity to expand the agendas of business, industry, and investors to include the long-term viability of our economic and social system as a whole.
Government policy makers cannot successfully address important infrastructure issues unless they respect the degree to which private-sector business plans do or do not aim to accomplish the same goals. Our goal is to facilitate the interaction vitally necessary for government and industry to align their often countervailing agendas.
Closer partnership between government and industry that effectively serves more of our economic and social interests may now be the smartest business agenda. This approach may be more profitable in the long-run for a major infrastructure industry like railroads, with its large sunk costs, long-lived assets, and connection to so many elements of our economy.
Instituting “public-private partnership” at the industry wide, national level, rather than an individual project level, can result in a stable regulatory environment and a comprehensive growth plan. Wall Street and private-sector finance entities will then be more attracted to fund system expansion. Furthermore, the cause of railroad development can be raised to the level of a national mission, when government, labor, shippers, suppliers, and the public observe the rail industry proactively advancing these broadly beneficial business plans.
So, while encouraging the continued development of high-volume lanes and trade corridors, port and intermodal facilities, and mega-terminals, we can also reverse the following less noticed trends:
a. Rail market share of land freight transportation declined from 1950 to 2004 and is now only stabilized or growing incrementally.
b. There is no comprehensive industry-wide growth plan in place, in spite of freight demand increases projected as far out as 25 years.
c. The number of shippers and receivers directly served by rail is steadily declining.
d. As truck drayage to and from large intermodal facilities replaces direct rail service, urban, rural, and small town road congestion worsens.
e. Rail line abandonments cause more and more of North America to lose the competitive advantages and quality of life enhancements of direct rail service while road maintenance costs increase from local truck traffic.
f. Passenger rail development is hindered by the freight railroad industry’s understandable concerns for capacity constraints and liability.
The major stakeholder groups that relate to freight railroads, i.e. Class I railroads, labor, shippers, railcar owners, some suppliers, and now many communities, are engaged in longstanding battles over operations, pricing, regulations, and service. All of these stakeholders are fighting for government attention to their grievances. Is this a recipe for progress? Can we allow this to continue while the nations of North America consider a massive infrastructure investment as the centerpiece of our economic rescue plans?
Our U.S. Capitol dialogue was organized around four questions:
1. Given the possibility of productive multi-stakeholder collaboration, what kind of results or benefits would you like to see generated for the future of rail transportation in North America?
2. What benefits could be generated for your particular business, members, clients, or constituents?
3. What factors would hinder such a dialogue from going forward for you? For others? What issues and dynamics are counter-productive to achieving the possible outcomes that we identified in questions 1 and 2?
4. For every barrier we identified in question 3, what progressive actions can you take individually or can we take collectively? How can OnTrackAmerica help this process?
Funding and developing a significant build-out of our rail infrastructure requires a new level of collaborative thinking and action among industry management, labor, customers, suppliers, government, and private sector lenders and investors.
