Consumers say railroad companies are off track when it comes to competition.
As the industry continues price-gouging customers and adding to inflation, domestic manufacturers are being forced to curtail production, according to one of the largest freight rail customers.
“We’re really, as you well know, still in a supply chain crisis,” Christopher Jahn, CEO of the American Chemistry Council, told the Washington Examiner, adding, “We’ve got service disruptions that are more frequent, they’re more severe, they’re longer lasting.”
There are multiple factors that have created significant delays with freight that were only exacerbated by high inflation rates, the COVID-19 pandemic, and the recently averted rail strike, Jahn said.
Four railroads currently control 90% of freight traffic, and 75% of customers are captive shippers. This means they can only send their product via one or two railroads, opening up the door for monopolistic policies.
RAILROADS AND UNIONS REACH TENTATIVE AGREEMENT: HERE’S WHAT IT MEANS
“That’s how railroads get away with not investing in their people. They’re woefully short of employees [and] haven’t invested in their railyards,” Jahn said on the Plugged In podcast.
“That results in terrible service for our customers,” he added.
How can they change this paradigm?
“We’re going to need the railroads to, frankly, do a better job of providing service to our members if we’re going to continue to grow and succeed against our international competition,” he added.
If competition is what truly drives the American economy and investment, Jahn said that’s what the customers want, not strenuous regulation of the industry.
“Our friends at the railroads would argue we want to re-regulate the industry. That’s not at all what we’re trying to do,” Jahn said. “What we’re trying to do is create some transparency and to create competition.”
“They have to earn more of our business. And they have to do that by investing more [and] by being more efficient,” he added.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
When asked about how energy policy can be shifted to benefit both rail customers and railroads, Jahn said the United States has “the most efficient manufacturing industry in the world,” but investing in production matters for international competition.
“We ought to take advantage of the energy dominance we have and extend it,” Jahn said. “We’re all for supporting our allies, and we should do that. But we should make sure that we’re taking care of business here at home too.”
Plugged In, hosted by former Federal Energy Regulatory Commission Chairman Neil Chatterjee and energy reporter Breanne Deppisch, brings on key players, from lawmakers to federal employees to industry experts, to keep our audience up to speed on the latest energy issues facing the country and the planet.
For your daily dose of energy, make sure to subscribe to the Daily on Energy newsletter.
