The ongoing economic recovery and freight railroads’ ability to reinvest in infrastructure this year will depend on a stable regulatory environment as well as ongoing innovation and efficiency gains.
Although none of us possesses an economic crystal ball, there are some positive trends. Offshore coal markets, especially in the Asia-Pacific, are growing, and that will improve rail volumes. The industry is equally well positioned to serve emerging resource developments in the Bakken oil and gas formation in Canada, Montana and North Dakota, and the Marcellus shale gas discovery in the Appalachian Basin. The emerging industrial complex supporting the Alberta Oil Sands will further drive long-term growth. Coupled with improvements in the ethanol market and significant potash exports, there is reason to be optimistic.
At the same time, sectors tied to the North American economy —such as consumer products, forest products and automobiles — will mirror the broader jobs recovery, with weaker growth versus the export market. Facing continued domestic volatility, it’s even more important that we preserve our regulatory stability.
I doubt many people outside the industry realize how important a stable and competitive regulatory regime has been to the success of the rail freight industry. Last year’s 30th anniversary of the Staggers Rail Act was a reminder that opportunity and regulation can coexist. That stability allows us to reinvest in a capital-intensive business, refining and implementing technological tools that drive our safety, efficiency and service reliability while earning a reasonable economic return for our investors.
Any attempt to tilt regulation toward or against one side of the supply chain must be understood as a risk to the overall economy. As an industry, we remain vigilant in protecting that balance. We look forward to working with the new Congress and maintaining the advantages that flow from stability.