For freight railroads, 2010 was a year of progress, tempered by unresolved issues that loom importantly as we look ahead.
Although railroads have seen an increase in traffic from the extremely depressed levels of 2009, volume remains well below levels achieved in 2007 and 2008. Despite the lingering downturn, railroads in 2010 invested heavily in infrastructure to ensure companies are well-positioned to handle additional growth once the economy grows beyond pre-recession levels. But the ability of railroads to continue investing heavily hinges not only on continued economic recovery, but also on other issues that will remain on the front burner throughout 2011.
Current rail labor contracts are up for renegotiation, with railroads represented by the National Railway Labor Conference in those talks. While it remains to be seen how the negotiations will conclude, it is certain they must reflect the economic realities affecting all U.S. businesses.
The focus on economic regulatory issues during the coming year may well move from Congress to the Surface Transportation Board, where the chairman has promised a new look at several issues. Critical hearings are likely during 2011, including one that revisits some current regulatory exemptions.
Safety issues are always important to railroads as we strive to reduce the numbers of accidents and injuries. Railroads are moving ahead with implementation of Positive Train Control, while seeking to modify some regulations so that they more closely reflect the legislative mandate.
Uncertainty is the enemy of investment, and remaining questions about new or expanded safety and economic rail regulation have a similar chilling effect. As uncertainties are removed, additional investment in rail infrastructure becomes more likely. And that means railroads will be ready to deliver the goods for America when economic growth resumes.