Last year’s catastrophic East Palestine train derailment has spurred calls from a rank-and-file labor group for public ownership of rail infrastructure. We spoke to an expert about what that could look like in the US, which is dominated by for-profit rail.

Freight rail cars sit in a rail yard on November 22, 2022, in Wilmington, California. (Mario Tama / Getty Images)

Nearly one year ago, on the night of February 3, 2023, a Norfolk Southern freight train carrying hazardous materials derailed in East Palestine, Ohio. Videos of the smoke and fire released by the nearly two-mile-long train went viral, and residents in the community reported severe health effects.

The rail disaster triggered an outcry: Why did this happen, and what can any of us do about it? Soon, there were articles detailing the alarming state into which the country’s railroads have fallen: accidents are up, and oversight is hard to come by. Plus, there is a severe squeeze on rail workers, many of whom lack sick days of any kind and are effectively always on call.

Railroad Workers United (RWU), a caucus of rank-and-file workers spanning all thirteen national rail unions, recently released a video offering one answer to the rotten state of US rail. “Putting America Back on Track: The Case for Public Rail Ownership” opens in East Palestine, with a resident of the area showing the viewer photos he took the night of the Norfolk Southern derailment. The video goes on to make the case for public ownership of rail, which has been a focus for RWU over the past year.

As Ross Grooters, RWU cochair and a union locomotive engineer, told Jacobin, the workers came out with the demand amid their ugly contract fight in 2022, which ended with Joe Biden intervening to quash a potential rail strike.

“It became really clear between the contract negotiations and the fact that the railroad companies are making obscene amounts of money operating the railroads purely for the purpose of extracting wealth from what should be critical infrastructure, that the only way for rail to work would be outside the for-profit model that it exists in currently,” said Grooters.

So RWU passed a resolution endorsing the campaign. The case has been articulated by RWU members in several publications, from Jacobin to In These Times to FreightWaves, but with the release of RWU’s film, I wanted to hear more about the models under debate, so I called up Maddock Thomas, who is writing a policy paper on public rail ownership for RWU. We spoke about the current structure of rail ownership, alternative public models, and which country has the most functional rail system. Our conversation has been lightly edited for length and clarity.

The Consequences of Private Ownership

Alex N. Press

RWU’s video lists some of the antisocial consequences of private rail ownership: problems for communities, issues for the economy, and of course, rail disasters like we saw in East Palestine. As the film puts it, “some industries are just too important to be kept in private hands.” Can you list some of the consequences that follow from private ownership of rail?

Maddock Thomas

Safety is on a lot of people’s minds now, post–East Palestine. The number of railroad accidents per millions of miles traveled has been trending down over the larger time scale of the past fifty years, in part because we don’t have as many trains or as many train lines running. But since 2013, we’ve gone from 2.4 rail accidents per million miles for Class One railroad to just over 3 accidents per million miles. That’s almost a 30 percent increase in the accident rate.

The freight train that derailed in East Palestine, Ohio, on February 3, 2023. (NTSB / Handout / Xinhua via Getty Images)

That can largely be traced to the advent of precision scheduled railroading (PSR), which is neither precise nor scheduled nor really railroading, as people like to joke. The focus is on longer trains at all costs and cutting crews, cutting maintenance. Union Pacific recently announced furloughs of 1,350 maintenance workers, saying that for financial reasons, they are moving all their maintenance to 2024. That’s something you don’t want to hear when a rail line goes through your community.

The focus is on longer trains at all costs and cutting crews, cutting maintenance.

The role of PSR is really evident when you look at the accident rate. Norfolk Southern has gone from 2 to 4.5 accidents per million miles between 2013 and 2022; the rates for CSX and Union Pacific have also risen. BNSF, the only rail operator not to adopt PSR, didn’t see that same increase. They’ve had around 2.25 accidents fairly consistently for the past decade. So there’s a clear change in railroading that has led to the decrease in safety.

There’s also the issue of service and how workers are being treated. The idea of the railroad as a good job is fading as the treatment of rail workers has gotten worse and worse. The Federal Railroad Administration conducted a study on fatigue which found that nearly 40 percent of locomotive engineers and conductors are highly fatigued and almost 90 percent of engineers and conductors reported that it is the irregular work hours that contribute to fatigue. You can receive a call at any time in the night and be told that you have two hours to get on the train. That’s disastrous for someone’s ability to see their family and to have a life outside of work.

The total rail employment has also cratered. One of the ways that rail companies try to make more money is by laying off workers. We went from a peak in 2015 of around 210,000 rail workers to around 150,000 now. They laid off a ton of people during COVID and haven’t been able to hire them back, which has put a strain on everyone that remains on the rail.

The State of Rail in the United States

Alex N. Press

What is the current structure of ownership in rail, and how has it changed over time?

Maddock Thomas

We’ve seen massive consolidation throughout the twentieth century. We functionally have a duopoly on the East Coast and the West Coast. In the east, we have Norfolk Southern and CSX. In the west, we have BNSF and Union Pacific. All of those are publicly traded corporations save for BNSF, which is owned by Warren Buffett’s Berkshire Hathaway.

The Class One railroads are the really big railroads that most of the interstate traffic in the United States travels on. They’re privately owned and operated, but “for profit” doesn’t do it justice, because the railroad companies will refuse profitable traffic if it is not as profitable as it could be. So there are those major four corporations in the United States.

Then you have Class Two and Three railroads. Those are smaller, and a lot of them are owned now by conglomerates, the largest of which is Genesee & Wyoming, which owns dozens of railroads across the United States. Those that aren’t owned by conglomerates are generally owned by local businesspeople or municipalities. These lines were sold off after the deregulation that followed the Staggers Rail Act in 1980, when it became much easier to sell off Class One lines that weren’t as profitable and weren’t main lines.

We’ve seen massive rail consolidation throughout the twentieth century. We functionally have a duopoly on the East Coast and the West Coast.

There’s more public rail ownership in the United States already than you’d think, because as a result of deregulation, a lot of the Class Ones started trying to cut service and sell off some of these smaller lines — which, though not immensely profitable, were critical to a lot of communities, especially rural communities, and for agriculture. Every state except Hawaii has some sort of publicly owned rail line.

Those are rarely operated by the state, but they’re owned by the state and contracted out to be operated or leased to one of those other Class Two or Three short-line operators to continue to provide service. The state provides funding for the infrastructure and improvements so that you still have real service to this community that otherwise would have been cut off.

One of the better-known and best-operated railroads is the municipally owned Madison Railroad in Madison, Indiana. They took an abandoned rail line from Conrail and have revitalized their local community and brought a good number of industries to town because they have a publicly owned and operated railroad.

A Norfolk Southern freight locomotive sits parked. (Luke Sharrett / Bloomberg via Getty Images)

Looking back at US history, federal land grants led to a lot of the transcontinental railroads. We gave free land to different railroad corporations with the condition that they just build the railroad. According to some estimates, 10 percent of the land mass of the United States was given away for free to rail corporations along with federally backed debt to fund the construction.

Alex N. Press

You mentioned the Staggers Rail Act of 1980, which deregulated rail. What’s the story behind that?

Maddock Thomas

After World War II we had the advent of the highway system, which was a huge public investment. It was essentially an enormous subsidy for trucking companies because suddenly they had excellent infrastructure systems that they didn’t have to pay for themselves. It was very cheap for them to operate and compete with railroads, whereas the rail lines were privately operated and had to pay for all their own infrastructure.

Railroads started going bankrupt as industry declined by the 1950s, particularly in the northeastern United States. The most famous and controversial example is the New York Central and the Pennsylvania Railroad, which were for a long time considered the two greatest railroads in the world.

By the 1950s, the United States was going to lose a lot of passenger rail services, commuter rail services, and freight service to a lot of communities in the Northeast and in other parts of the country if something wasn’t done. Though there are a lot of downsides to deregulation, the regulation that was happening on the railroad was in a number of ways antiquated and suffocating them.

Conrail saved railroading in the northeast and eventually became profitable, which was their goal. The moment it became profitable, Congress sold it off.

After the Penn Central merger went through and Penn Central went bankrupt, Conrail was created by the federal government to take over its remnants plus the New Haven and a number of other rail lines from Pennsylvania up to New England, even stretching out to Chicago. Conrail was an enormous conglomerate and it was really successful at what it did, even though it required cutting some lines, which were then turned into short lines. It saved railroading in the Northeast and eventually became profitable, which was their goal.

The moment it became profitable, Congress sold it off because it was never intended to be a long-term solution but rather a stopgap measure to save the railroads. But in order to make Conrail viable — and fulfill something that the other railroads had been asking for for a long time — they got rid of the powers of the Interstate Commerce Commission (ICC), which was one of the most important federal bodies for the better part of a century.

The Staggers Act essentially eliminated the ICC and allowed railroads and their customers to negotiate freight rates themselves. Supposedly this allowed for competition in the rail industry, but it also allowed for massive consolidation. That’s how we get two railroads on each coast now.

The Public Ownership Option

Alex N. Press

What would public ownership look like in the United States?

Maddock Thomas

There are different perspectives on this, but a publicly owned railroad would have to be a service-first railroad: for passengers but also businesses across the United States, from rural agriculture to factories near port cities. Doing so would require a massive shift.

The plan put forth by railroad workers about a century ago entails having the federal government buy out the railroads, and then having a railroad corporation governed by a board composed of one-third appointed for the public interest by the president, a third by management, and a third by union employees.

Rail workers in 1920. (Pioneer Library System / Flickr)

The rates charged would be a certain amount of the operating cost plus a percentage of the capital costs: the maintenance and the bonds. But if they were able to reduce the operating costs, rather than keeping that money and buying back shares or giving dividends to shareholders, as we see now, those cost saving would be distributed to the public in the form of decreasing freight rates — making it cheaper to transport things by rail, which would then attract customers off of the roads, which would be better for congestion, for the environment, for smog, etc.

It could also be used for further improvements for service, perhaps to fund electrification, as well as faster rail service for passengers by improving track quality. The first priority would be improving the infrastructure and service. We just don’t see that happening with today’s railroads.

Under public ownership, the first priority would be improving the infrastructure and service. We just don’t see that happening with today’s railroads.

There’s also the model of open access, which is very popular right now. Internationally, it comes along with the neoliberal trend towards everything needing to be a market, but it’s popular in the United States, including among a number of people in RWU. This model is of the railways as a steel highway in that it would be publicly owned infrastructure, with access based on different levels of access charges to different rail operators to provide competition for service.

I think a public rail system that would work for the United States is somewhere in the middle of those two models. From the research I’ve done on New Zealand, on British rail, and on the current liberalization, which is what they’re calling this open-access movement in the European Union, I’m skeptical that open access alone can be a model for the United States. The rail corporations would love not having to pay for the maintenance on the railroads and just operate trains on the few lines that are super profitable.

If we allow open access, you’re only going to have competition on the few lines that are super profitable, which are primarily bulk commodities — coal, stone, and the like — and intermodal containers. You’re not going to see service to any of the industry that’s less profitable and predominantly located in rural communities.

You’re going to need a public operator, not as an operator of last resort but as a guaranteed competitor in the model of public service first, and if you want to compete with that, you’re welcome to try and put your service forward. But we need to have a guarantee that rail service will be available on our national network and can’t just come and go as different operators enter and exit the market, which has been a problem with privatization in the UK.

The other issue there is that historically, when you separate infrastructure from operations, a number of studies have concluded that you get much worse maintenance. So that is a concern if we have a federally owned infrastructure that is not also in some way affiliated with an operator that operates over those rail lines. It may be slightly different if we have publicly owned infrastructure, because a lot of times that separation has happened through privatization, such as in Europe or the UK or New Zealand, but it is something that we have to be concerned with.

Alex N. Press

You’ve mentioned the UK, Europe, and New Zealand. What is the most functional rail system in the world?

Maddock Thomas

A lot of people would point to Switzerland, which has SBB [Swiss Federal Railways], a large state operator that provides a superb service to both passengers and freight operators. They also have regional rail lines that might be owned in some cases by private enterprises but predominantly by regional governments.

Switzerland is excellent in passenger service, with some of the most punctual and frequent service in the world. It’s very highly electrified, which has benefits for the environment, but it’s also just way better operationally: it’s cheaper to operate, it accelerates faster, it uses less energy, and the vehicles themselves last way longer because there aren’t explosions happening every few seconds inside of your motor.

Switzerland is excellent in passenger service, with some of the most punctual and frequent service in the world.

There are a number of other railways that are fairly well operated. The Chinese national railway is pretty well operated. India’s national railway is doing an incredible job investing in infrastructure: they’ve gone from very minimally electrified, with a goal of being 100 percent electrified by 2025. Right now, they’re at over 80 percent. One of the most common criticisms of electrification in the United States is that you can’t fit double-stacked containers, but India has electrified, dedicated, double-stacked container corridors, and they work. So India is a good model of a successful naturally integrated plan for both passenger and freight rail.

All of these countries have issues and of course, India and the United States are at different points developmentally — so you’d think with the wealth of our nation and the amount of infrastructure we’ve built in other areas like our highways, we could have done that decades ago.

But we don’t have the national coordination or foresight that comes from that publicly owned system. Instead, we have a bunch of separate rail operators who don’t want to make those investments unless they’re subsidized.

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