Industry Observers Speculate on How a Biden Administration Will Affect Freight Railroads

Railroad industry observers are already speculating as to how the Biden administration is expected to affect freight railroads and they see a few changes coming.

Joseph Biden, a former vice president and U.S. Senator from Delaware, is seen by many as likely to abandon the broad use of tariffs that had been favored by the Trump administration.

Those tariffs had drawn sharp criticism from many businesses and business trade organizations who said they caused economic disruptions because China responded with tariffs of its own that hindered exports of some U.S. goods and commodities.

In particular, U.S. agriculture exports were hurt by the tariffs. The railroad industry had opposed those tariffs because trade is related to 40 percent of rail shipments.

Statements issued by the Association of American Railroads have called for opening more markets to international trade and ending obstacles to sustained growth.

Biden during his campaign expressed support for two-person freight crews.

That will likely put him at odds with Class 1 railroads that are pushing to eliminate two-person crews on some trains in favor of a roving conductor who would handle multiple trains as needed.

Class 1 railroads also want to explore autonomous train operations.

During the Trump years, the Federal Railroad Administration said there was no data showing that two-person crews are inherently safer than one-person crews and therefore there was no need for a federal minimum crew size regulation.

It remains to be seen how a Biden appointed FRA administrator will respond to the crew size issue.

Another potential point of tension will be the two-person crew laws approved in some states at the behest of railroad labor union.

Courts have ruled that federal law in regards to crew size preempts state laws on the matter.

Ultimately, though, the crew size issue will be resolved in collective bargaining between the Class 1 railroads and labor unions, a process that may continue to drag on for a few more years.

Railroads will be keeping an eye on the Biden administration’s environmental policies.

Biden has said one of his first actions as president will be to have the United States rejoin the Paris climate accord.

He has called for ambitious targets to reduce the nation’s emissions of greenhouse gases that contribute to climate change.

In doing this, the Biden administration may favor policies that would have the effect of reducing the market for such energy-related commodities as utility coal and fracking sand used in oil and gas production.

However, if the Biden administration imposes policies that hinder pipeline construction that could boost the shipment of crude oil by rail.

A Biden administration might also seek repeal of regulations allowing the shipment of liquefied natural gas by rail.

The rail industry might be able to take advantage of a focus on the environment by claiming that it is a more environmentally friendly way to ship freight than trucks.

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