March 09, 2021

ELPC Thinks: The Future of Passenger & Freight Rail

On March 5th, we hosted Marty Oberman, Chairman to the Surface Transportation Board, to discuss the challenges and opportunities for passenger and freight rail in the U.S.

by Frances Rafferty, Communications Intern

Marty Oberman was appointed Chairman to the Surface Transportation Board (STB) in January 2019 by President Biden. Previously, he served as Chairman of Metra and the Chicago City Council as Alderman of the 43rd Ward. The STB’s economic regulation of railroads has major impacts on the freight rail industry, as well as Amtrak, Metra, and other passenger rail carriers.

During this conversation, Oberman discussed the history of the STB and the importance of the freight rail system to the economy and to an environmentally sustainable future. According to the Association of American Railroads, 40% of all long-distance freight in the U.S. occurs on rail, but it produces only 2.1% of the transportation industry’s greenhouse gas emissions. Rail affects a major portion of the economy already, but every opportunity to get additional freight shipping off of the highways and onto rail should happen as a matter of environmental sustainability.

The STB also has an important opportunity to help improve passenger rail. After years of legal limbo, the courts have finally clarified that the STB has the legal authority to regulate on-time performance. Oberman explained that the agency is gearing up personnel to handle these disputes, which take time and expertise, to ensure they are managed fairly, aggressively, and expeditiously. Hopefully now that there’s a clear mechanism for enforcing passenger train priority, we’ll see less freight trains blocking the way and slowing things down. Read more about ELPC’s role in this legal battle here.

To improve rail into the future, Oberman wants to accomplish three primary tasks during his term as Chairman of the Service Transportation Board:

1. Revamp the rate review system for shippers, to make the process more accessible and less onerous.
2. Do what they can to improve and stimulate competition amongst freight railroad shippers, to bring about better rates and service.
3. Try to get a handle on the powerful market forces from Wall Street, to encourage investment in necessary staffing and infrastructure rather than buying back stock. Rail decisions should benefit the long-term strength of the industry, not just the immediate benefit of shareholders.

Oberman is hopeful that, with the advent of the Biden administration and heightened awareness of climate change, that making the shift from freight trucks to freight rail systems will be seen as economically and environmentally sustainable on a larger scale.

Watch the full webinar below