Authors: U.S. General Accounting Office (GAO)

Date of Publication:  November 1991

Sponsoring Agency:  U.S. General Accounting Office (GAO)

Performing Organization:  U.S. General Accounting Office (GAO)

Report No: GAO/RCED-92-16

Abstract:

A variety of factors influence railroad competitiveness, and hence, rates. These factors include broad economic developments that influence the railroads’ competitive environment, federal laws governing railroad labor, and public policies that help finance highways and waterways - the rights-of-way of the railroads’ principal competitors. The Railroad Retirement Act of 1937, the Federal Employers’ Liability Act (FELA), the Railway Labor Act of 1926, and subsequent amendments to these acts are the principal laws governing railroad employee benefits and labor relations. These laws result in overall labor costs that are higher than those of other industries. Railroad officials told GAO that they would be in a better position to competitively price their services and compete for intercity freight if they could reduce their labor costs.

Publicly financed interstate highways and waterways tend to give the trucking and barge industries a competitive price advantage over rail-roads because the user fees that rail-competitive trucks and barge operators pay generally do not cover the costs they impose on the highways and waterways. If all modes operated under the same labor laws and were equally responsible for their rights-of-way, relative costs would change and rail rates could become increasingly attractive compared with truck or barge rates.
 

No. of Pages:  39