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| Long title | A bill to reform the economic regulation of railroads, and for other purposes. |
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| Enacted by | the96th United States Congress |
| Effective | October 14, 1980 |
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| Public law | Pub. L. 96–448 |
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TheStaggers Rail Act of 1980 is aUnited States federal law thatderegulated the Americanrailroad industry to a significant extent, and it replaced the regulatory structure that had existed since theInterstate Commerce Act of 1887.[1]
After theGreat Depression andWorld War II, many railroads were driven out of business by competition from government-fundedinterstate highways and fromairlines that relied on public airports and governmentair traffic control. Cars and trucks, running on government-built roads, all but endedpassenger train service and severely reduced railroads'cargo revenues.[2]: 219 Railroads continued to be regulated by theInterstate Commerce Commission (ICC) and a complex system for setting shipping rates.
The Staggers Act followed theRailroad Revitalization and Regulatory Reform Act of 1976 (often called the "4R Act"), which reduced federal regulation of railroads and authorized implementation details forConrail, the new northeastern railroad system.[3] The 4R reforms included allowance of a greater range for railroad pricing without close regulatory restraint, greater independence from collective rate making procedures in rail pricing and service offers, contract rates, and, to a lesser extent, greater freedom for entry into and exit from rail markets.
Although the 4R Act established the guidelines, the ICC at first, did not give much effect to its legislative mandates. As regulatory change began to appear from 1976 to 1979, including the phasing out of the collective ratemaking authority, most major railroads shifted away from their effort to maintain the historic regulatory system and came to support greater freedom for rail pricing, for higher and lower rail rates.[citation needed]
Major railroad shippers also continued to believe that they would be better served by more flexibility to arrive at tailored arrangements that were mutually beneficial to a particular shipper, and to the carrier serving a particular shipper. The judgments supported a second round of legislation.[4]
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The major regulatory changes of the Staggers Act were:
The Act also had provisions allowing the Commission to require access by one railroad to another railroad's facilities if one railroad had effective "bottleneck" control of traffic. The provisions dealt with "reciprocal switching" (handling of railroad cars between long-haul rail carriers and local customers) andtrackage rights. However, the provisions did not have as much effect as the others mentioned.
The act was named forHarley Staggers (D-WV), who chaired theHouse Committee on Energy and Commerce.
By 1997, studies of the rail industry showed dramatic benefits for both railroads and their users from the alteration to the regulatory system.[2]: 253–4 According to studies by the Department of Transportation's Freight Management and Operations, railroad industry costs and prices were halved over a ten-year period, the railroads reversed their historic loss of traffic (as measured by ton-miles) to the trucking industry, and railroad industry profits began to recover, after decades of low profits and widespread railroad insolvencies.[5] In 2007, theGovernment Accountability Office reported toCongress, "The railroad industry is increasingly healthy and rail rates have generally declined since 1985, despite recent rate increases.... There is widespread consensus that the freight rail industry has benefited from the Staggers Rail Act."[6]
TheAssociation of American Railroads, the principal railroad industry trade association, stated that the Staggers Act has led to a 51 percent reduction in average shipping rates, and $480 billion has been reinvested by the industry into their rail systems.[5]
The Staggers Act was one of three major deregulation laws passed by Congress in a two-year period, as the cumulative result of efforts to reform transport regulation begun in 1971, during theNixon administration. The other two laws were theAirline Deregulation Act of 1978 and theMotor Carrier Act of 1980. This legislation in effect superseded almost a century of detailed regulation begun with the establishment of the ICC in 1887. TheInterstate Commerce Commission Termination Act of 1995 abolished the ICC and created its successor agency, theSurface Transportation Board, an administrative affiliate of theUnited States Department of Transportation.[7]
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