The freight rail industry plays a major role in the New Mexico economy, providing important transportation services for many of the state’s key industries.

“BNSF ships many products we need into New Mexico: industrial products that are needed to help keep the economy going, agriculture products for our food, and consumer products we use in our daily lives,” says New Mexicans for Economic Prosperity.

To the south, Union Pacific railroad operates the Santa Teresa Intermodal Ramp, a $400 million facility built to handle 225,000 intermodal containers a year — many of which contain the goods New Mexicans find on store shelves. The terminal generates $500 million in economic activity, 600 permanent jobs and a wave of businesses locating in the area for quick access.

“Private rail investment was a critical and vital selling point for many businesses,” says Jon Barela, the former economic development secretary of New Mexico. “It signaled to the world that Santa Teresa was a strategic place to do business with the potential to be a vital part of the border and cross-border trade.”

Indeed, freight railroads foster commerce across the New Mexico economy, enabling businesses to safely and efficiently move goods. Railroads provide public benefits in the process: They take trucks off crumbling and financially constrained highways and reduce carbon emissions through inherently efficient operations. While the railroads account for 40 percent or more of U.S. long-distance freight volume, they are responsible for just 0.6 percent of total U.S. greenhouse gas emissions.

Yet the ability for railroads to meet future freight demand depends upon the continuation of a balanced federal regulatory system enacted on bipartisan grounds 40 years ago last year. In 1980, President Jimmy Carter signed the Staggers Rail Act into law — a seminal piece of public policy that allowed for greater industry autonomy while also instilling a safety net for customers who need one.

In doing so, Congress and Carter largely removed the government from setting rates between railroads and customers. The law to this day, overseen by the U.S. Surface Transportation Board, protects railroad customers against unreasonable railroad actions while allowing railroads and their customers to largely work together without undue government interference.

Rail deregulation was necessary and the smart choice over the other option of nationalization. Decades of overregulation and treating railroads more like public utilities left them unable to earn the revenue needed to maintain expensive networks.

Carter said at the time: “By stripping away needless and costly regulation in favor of marketplace forces wherever possible, this act will help assure a strong and healthy future for our nation’s railroads. … It will benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service shipper needs.”

That vision is true to this day and remains a critical lesson in bipartisan governance for the members of the New Mexico congressional delegation and the rest of lawmakers.

Since 1980, railroads have invested more than $710 billion in private capital. Additionally, average inflation-adjusted rail rates are 43 percent lower today than in 1981, while the train accident rate is down 30 percent since 2000 alone.

“Forty years since the Staggers Rail Act passed, the country’s freight railroads enjoy strong financial health, well-maintained and modern infrastructure, and optimal service to deliver goods across America,” says Rio Grande Foundation president Paul Gessing.

It is no wonder both Democrats and Republicans support the current system. It allows markets to work where they do but allows government to intervene where it should.

To sustain the freight railroad industry’s role in the New Mexico economy and beyond, public policies should continue to incentivize private investment and a healthy rail sector serving its customers.

Ian Jefferies is president and CEO of the Association of American Railroads.

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