What I'm Reading
Week of December 1, 2025
Articles
Why Congress’ refusal to act on freight since 1993 is costing taxpayers over $40 billion a year - Important points raised on taxpayer subsidies for the trucking industry, but it stops where a lot in the rail industry stop: “Make trucks pay their share but I’m not going to think about anything beyond that.” This is a lazy argument that relies on an appeal to schoolyard “fairness” and deflects from the Class 1’s inability to actually compete with trucking.
The truth is that this is never going to happen because it would drive a large amount of truck capacity out of the market. Since trucks move ~70% of US freight, that means higher prices across the board and reduced service quality, further impacting prices, inventories, etc. This is obviously political suicide and the reason why the fuel tax hasn’t changed since 1993. Let’s just be honest here and stop floating stupid pipe dreams.
As I’ve written in the past, US freight transportation policy should be focused on one thing: Reducing the total cost of transportation. This includes a number of dynamics:
Restraining monopolistic pricing power where value creation disproportionately accrues to the supplier at the expense of the consumer.
Investing in, and, yes, even subsidizing certain modes/lanes, to lower rates to the benefit of the industry.
Combating irrational or unnecessary regulations and red tape that prevent private capital investments in infrastructure.
Incentivizing public-private partnerships in infrastructure investment.
Incentivizing research in and later adoption of the latest technologies that support the goal of reducing the total cost of transportation. With the AAR, this would include federal statue that prevents the AAR committee cabal from becoming overly prescriptive in its regulations.
Focusing on these much more practical and necessary policy objectives would still bring great benefits to the rail industry.
Automakers, suppliers push deeper collaboration to build resilient supply chains - This is a trend which the Autos are really pushing, but one that I think is at least being explored across most of the industry. The problem the railroads have with addressing this opportunity (because it is a growth opportunity for a logistics company like a railroad) is that their data quality is so poor. Merging to reduce the number of partners in the network helps paper over the cracks, but, ultimately, if you have low quality data you’re going to be handicapped in giving shippers the greater transparency that they’re seeking.
Railroad ops leaders also need to loosen up their ice cold grip on transparency. That’s a culture change and one that is still being ignored at best or actively repulsed at worst in pretty much every Class 1. There’s still far too much of a “We know best” mentality that brought out rather accurate shipper criticisms during the PSR adoption last decade - “PSR is done to you, not with you.” In a fragmented network business, collaboration is key.
STB Approves Fortress Investment Group Acquisition of Two Shortline Rail Carriers
American Customers Are Madder Than Ever
Stadler challenges $US 2bn SBB contract award
Union Pacific says rail merger could unclog Chicago. Critics worry about costs and traffic tie-ups. - Tremendous article that does a good job at looking at several aspects of the merger in a relatively unbiased way. Good primer for those who aren’t in it every day.
China export controls push European firms to move supply chains
Steel sector praises new federal measures, wants to see tariff remission program end
Exclusive: Russia weighs how to prop up Russian Railways which is $51 billion in debt, sources say