Rail Deregulation Literature Review

In the remainder of this chapter, we first review the regulatory history of the railroad industry. We then explore the relationship between economic deregulation and safety. 

Federal regulation initially focused on issues of rates and shipper discrimination. Establishment of this new regulatory structure led to inevitable conflicts over the scope and jurisdiction of the newly formed Interstate Commerce Commission (ICC). By 1910, both shippers and railroads were generally content with federal regulation (Teske et al., 1995). However, controversy continued with regard to the extent to which the ICC could make rules that would affect intrastate commerce. The Shreveport decisions resolved these issues in favor of the ICC— namely, by specifying that the ICC could regulate intrastate railroads rates, since these rates had the potential to affect interstate commerce. 

While the 1958 Transportation Act provided some relief to the rail industry, large portions of the rail industry [still] faced serious problems... (Teske et al., 1995, pg. 41). By 1973, several railroads in the northeast United States faced bankruptcy. Because of these financial strains, these railroads had spent less on maintenance (Keeler, 1983). The financial difficulties of the railroad industry during this period resulted in the Regional Rail Reorganization Act of 1973 (the 3-R Act). The 3-R Act focused on reorganization of the northeastern railroads under federal control. This reorganization resulted in the formation of Conrail, as well as the abandonment of about 3000 miles of track. 

Like most heavy industry, the normal day-to-day operations of railroads poses risks of injury and death to those working on the railroads. In addition, major accidents such as derailments and collisions can also pose safety risks. These risks are imposed on employees as well as passengers, pedestrians, and automobile drivers. Derailments and collisions probably loom largest in the minds of the public. However, the most frequent accidents involve employee injuries. 

Because of changes in indexing of the dollar threshold for reporting accidents, consistent data on derailments and collisions are available only since 1975. The number of collisions and derailments was 50% higher in 1979 than in 1975. However, by the mid-1990s, the munber of collisions and derailments had decreased to about 40% of the number in 1975. Much of this improvement occurred in period between 1980 and 1985. 

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