Freight Rail Wants Smarter, Greener And Safer Shipping. Its Regulators Have Other Ideas.

Port slowdowns and empty store shelves have prompted policymakers investigation of supply chains and shipping networks at a recent hearing of the House Transportation and Infrastructure Committee. One witness from the Massachusetts Institute of Technology Center for Transportation and Logistics blamed chronic under-utilization of truck drivers and sub-optimal loading/unloading policies at warehouses. Another from the transportation intermediaries industry said it is a perfect storm of factors including shortages in labor, chips, warehouses, and container storage combined with historic demand for freight magnified at a global scale. Ian Jefferies of the Association of American Railroads detailed how pandemic-driven shifts in consumer spending and retail inventory can whiplash freight patterns.

The key questions are whether regulation can improve the status quo (and for whom) and to what degree can providers be allowed flexibility to adjust to difficult market conditions. Moreover, it is difficult to discern cost and energy efficiency because of regulatory distortions.