Railroad Regulation Could Derail Freight Economy

When an individual buys a home, they are buying a space that is legally considered “private.” This means that they can control who goes in their house. If someone goes onto their property without being invited, this is trespassing—and the homeowner has the right to kick the person out. While this is exactly how private railroad companies operate today, this may soon change.

The train shipping business is similar to the trucking business with one major exception: railroad companies can own the rails that their trains use whereas truck companies rarely own the strips of land that they drive on. If a train company wants to use another company’s track, they must pay to do so. However, a new regulation could force all United States railroad tracks to be operationally equivalent to “American freeways”: anyone can use them at any time at no cost. If company A wants to use company B’s railroad, they can; at no cost to company A and with no gain for company B.

This means that one company can use the private property of another with no costs or disadvantages.

The ramifications of this proposed regulation are massive. If the government can force a company to share its private rails in the name of “competition,” where is the line drawn? Should a shipping freighter be forced to share space on its vessel so that opposition can compete? Should a trucking company be forced to haul goods for other companies for free? Should one industry ever have to share its materials, workers, and properties with another for the sake of a “free market?” The answer in America is typically no—yet this regulation is being proposed. If this guideline becomes law, other companies in other industries should begin to worry about how “private” their operations are.

This suggested regulation will destroy the worth of private rails. Buying a house is more expensive than renting an apartment because a homeowner owns the space they live in. Similarly, private rails cost a lot to buy because companies own the avenues of transportation. Rather than “rent” railways, companies that own railroads can personally use them or they can “rent out” their rails. The company paid a premium for the right to own a section of railroad but that premium would be close to worthless if other rail companies can use the tracks whenever they want. There is practically no benefit to “owning” something if other companies can use it. It is similar to buying a home but being forced to share it with a family for free. It doesn’t make sense and it hurts the economic worth of various railroad properties throughout the U.S.

Liability Concerns Will Abound

The other tricky aspect of private railroads becoming usable by all trains is liability and insurance. Private railroad companies surely have to obtain insurance for the tracks and land that they own. If a private train derails on private property, the insurance claim is a straightforward situation. However, if a public train derails on private property, this can make insurance claims extremely complicated. Furthermore, suppose an individual is hurt in a train accident on “private property” by a public train.

Liability can go a number of ways in this scenario. The private train company could be sued for things like the track area not being marked properly. However, the public train company could be sued because the person was hit by that train and not by one of the private trains. In accident liability cases, the area where an incident occurred is only slightly less important than what actually happened. If the regulation is passed, this will make proving liability in train accidents more difficult than ever before.

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