There's a serious risk that freight rail operators could find themselves trapped in a regulatory squeeze if policymakers aren't careful about how they approach shipping reform.
The Jones Act, a 1920 law governing maritime cargo movement between U.S. ports, has become a focal point in discussions about supply chain efficiency. Some lawmakers want to loosen its constraints, while others defend it as necessary protection for domestic shipping interests. But the real danger lies in what happens to rail operators in the crossfire.
Conrail, once the poster child for railroad deregulation's success, serves as a cautionary tale. When freight railways were freed from heavy-handed interstate commerce restrictions decades ago, the industry thrived. Operators could set rates, choose routes, and respond to market demands without waiting for government approval. That flexibility transformed rail from a declining sector into a competitive logistics option.
The fear now is that if Jones Act adjustments somehow circle back to include rail regulation, operators could lose the operating freedom they've regained. Re-regulating freight railroads would be a step backward that could chill investment, reduce service innovation, and ultimately harm shippers who depend on competitive rates.
Policymakers should be clear about what they're trying to fix. If the target is maritime shipping rules, keep rail out of it. The industries operate under different models for good reason, and conflating them risks undoing decades of freight rail progress.
Author James Rodriguez: "The lesson from Conrail's past is simple: deregulation works, and going backward would be a gift to nobody but bureaucrats."
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