The Impact of the Staggers Rail Act

Train TracksOne of the most significant legislations that changed how companies in the US shipped cargo by railroad is most certainly the Staggers Rail Act. Introduced in 1980, the Staggers Rail Act essentially deregulated the railroad industry and altered the outlook of supply chains across the United States. In essence, the Staggers Rail Act eliminated the old regulatory structure for shipping and made it easier for rail carriers to create their own freight shipping rates. The result from the Staggers Rail Act revolutionized railroad shipping and rejuvenated rail companies. Companies that depend on railroad shipping saw lower freight costs. The rail tracks were less congested and the railroad companies found new revenue. It was a win-win for all.

Years later, the Staggers Rail Act has come up again in the spotlight, but for the wrong reasons. The pricing rules are being challenged and Senator Jay Rockefeller is bringing up the fight. Rockefeller, the Chair of the Senate Commerce, Science and Transportation Committee has made some recent comments about the industry. The Senator claims that the Department of Transportation’s Surface Transportation Board (STB) has been assisting the large railroad companies by pandering to their needs, which forced shippers to pay more. Senator Rockefeller said that the rail companies are “raising their dividends and buying back stock at record levels.” In a few days, the Senator will propose a new bill that he hopes will fix these regulatory issues.

For those shippers who depend on railroads for transportation, speak to your trusted freight forwarder who has more information about the story.

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