On May 10, the U.S. Senate Committee on Commerce, Science, and Transportation passed the Railway Safety Act of 2023 (S. 576) out of committee on a largely party-line vote. Democrats were unanimously in favor, but two Republicans on the committee—the original bill sponsor, Sen. J.D. Vance (R-OH) and Sen. Eric Schmitt (R-MO)—also voted aye. Former President Donald Trump also endorsed the bill.
The Railway Safety Act is ostensibly in response to a February freight train derailment in East Palestine, Ohio, that has received significant public attention, in part, because the train was carrying hazardous materials that spilled and burned.
Unfortunately, the Senate’s bill is nothing more than a hastily assembled package of irrelevant policy proposals that will do little to advance safety, let alone effectively respond to the East Palestine accident. What’s more, given how disconnected the Railway Safety Act is from proven advancements in rail safety—underscored by the bill’s rejection of both cost-effectiveness and the existence of real-world tradeoffs—the bill would likely reduce transportation safety over the long-run.
The Railway Safety Act, as amended by the Senate Commerce Committee, gives the U.S. Department of Transportation (DOT) broad authority to issue new regulations on trains carrying hazardous materials, train length, railcar inspections, wayside defect detectors, and train crew size. Notably, the bill does not require the DOT to determine that any of these new requirements satisfy cost-effectiveness standards before bringing them into force.
The approach of the Railway Safety Act violates several basic principles of sound public policy. Despite its supporters’ claim that this bill is in response to the East Palestine derailment, the legislation was assembled prior to the completion of the National Transportation Safety Board’s (NTSB) still-ongoing investigation into the causes of that accident. The bill also does not identify any market failures that could potentially justify a need for new regulations. And because the bill does not require regulators to consider real-world costs and tradeoffs, there is nothing to prevent regulators from promulgating rules that will perversely reduce transportation safety. In short, this is a sloppily written piece of legislation that is destined to fail to achieve its stated goal of improving safety.
A better approach would start with recognizing the actual determinants of rail safety, which generally align regulation with railroads’ economic incentives. Congress needs only to look at its own past work on this subject. After decades of excessive economic regulation nearly destroyed the railroad industry in the United States, Congress responded with deregulatory measures, culminating in the Staggers Rail Act of 1980. The Staggers Act helped reverse U.S. freight rail’s decline and has encouraged hundreds of billions of dollars in private investment since its enactment.
Even though the Staggers Act focused on economic regulation, large safety gains followed in its wake. Since its enactment, the U.S. has seen a 75% decline in train accident rates and an 85% decline in employee injuries and occupational illnesses. Economists have attributed this dramatic safety turnaround to partial economic deregulation rather than an increase in direct safety regulation. A 2016 study published in the Review of Industrial Organization found that “Staggers may be responsible for most of the reduction in the accident rate from its 1978 high” and that “[Federal Railroad Administration safety] regulatory restrictions that have been adopted since the Staggers Act, however, are not associated with improved safety.”
If Congress wishes to improve rail safety, there are responsible steps it can take based on evidence, which I outlined in recent testimony to the U.S. House Transportation and Infrastructure Committee’s Railroads, Pipelines, and Hazardous Materials Subcommittee. In my testimony, I highlighted emerging automation technologies related to infrastructure inspection and train operations. Automation is needed to ensure that rail can continue to compete with increasingly automated trucks. Wages and benefits currently account for approximately 45% of truck operating costs and about 30% of rail’s costs. When factoring in labor-related regulations such as hours-of-service requirements, the economic costs are even higher.
Automation is also designed to eliminate human error in domains where it is deployed, which would greatly reduce accidents. Even if computers make some new types of errors, being able to move human operators away from heavy machines and dangerous structures means fewer people will face hazards in the field that threaten their lives and limbs.
But rather than encouraging the development and deployment of rail automation, the Senate’s Railway Safety Act discourages it. The bill fails to address the Federal Railroad Administration’s about-face on approving automated track inspection waivers, which a federal court recently found unlawful. Even worse, it includes a permanent two-person train crew requirement that would eliminate the business case for train automation because railroads could not realize its benefits. This runs counter to both safety and the long-run viability of freight rail as a trucking competitor. Importantly, the train that derailed in East Palestine that prompted the Railway Safety Act had three crewmembers.
If trucks automate as expected in the coming decades while freight rail fails to do so, falling trucking costs will cause some rail customers to shift their cargo to trucks instead. This would have social consequences worth considering. It would reduce overall transportation safety because truck accident fatality rates are six times greater than rail’s, and injury rates are 17 times higher. It would also worsen environmental outcomes because, when compared to freight rail, trucks produce approximately 10 times as much carbon dioxide, more than three times as much fine particulate matter, and two-and-a-half times as much nitrogen oxides per ton-mile.
Congress has better options than the Senate’s deeply flawed Railway Safety Act. Instead, it should act prudently by waiting for the National Transportation Safety Board to complete its investigation and review the NTSB’s findings and recommendations. After carefully reviewing the NTSB final report, it should identify any potential market failures that could be remedied by regulation. And then, it should consider a range of regulatory alternatives and evaluate the cost-effectiveness of potential remedies to ensure the benefits outweigh the costs. The impulse to “do something” is a powerful motivator in politics, but good policy must reflect the best available evidence and careful analysis.