Page 58 - FDI Alliance International Magazine | September 2018 1

NAVIGATING THE RAILROAD REGULATORY WORLD CAN BE CRUCIAL

TO THE SUCCESS OF AN ECONOMIC DEVELOPMENT PROJECT

I served as the Chairman independent agency with exclusive jurisdiction over Economic Studies Institute of 2014 data stated that
of the United States Surface railroad economic matters. Generally, a project de- freight railroads created nearly $274 billion of eco-
Transportation Board (STB) veloper thinking of becoming involved in the freight nomic activity, including $33 billion in tax revenue,
from 2009-17, having rail industry must understand that the STB holds sway and generated almost 1.5 million jobs in the U.S.
been nominated to two and in many cases its approval will be required. Also, the freight railroads reinvested $26 billion into
terms by President Obama Therefore, the proper type of approval from the STB their infrastructures and hauled more than one-third
and confirmed both times to operate a railroad is important and can be con- of all U.S. exports, about 329 million tons. In addi-
by the Senate. In this role, fusing in certain situations. tion, they moved 171 million tons of imports and
I was the administrator of 11 million tons of international transit freight. These
DANIEL ELLIOTT the agency and the lead Railroad transportation is a huge economic financial statistics demonstrate the importance of
policy maker. It was an honor to serve my country in driver in the United States. the freight rail industry to the economy of the United
such a capacity. I left the agency in 2017 and joined As Chairman, I understood how important the rail States.
Conner & Winters as a Partner where I work on rail industry is to the economic development of the Unit-
regulatory matters. However, this article is my own ed States. Not known to all, the U.S. freight rail infra- Not surprisingly, some economic development projects
opinion and not that of my law firm. structure is privately owned by hundreds of railroad are highly dependent on having freight rail service
corporations, but mostly by four large railroads. available to them. Direct access to the rail network
The STB, a federal agency, is the economic regula- can provide a less expensive shipping method to
tor of the freight railroads in the United States. The There are approximately 140,000 miles of rail track and from an industrial site, especially for hauls over
agency handles rail mergers, acquisitions, trackage in the U.S. These lines facilitate service across the 500 miles and bulk commodities. In addition, hav-
rights agreements, line abandonments, and oth- nation to a wide variety of industries and their buy- ing access to two railroads would provide an industry
er rail industry transactions. It is also a completely ers. A recent study by Towson University’s Regional with direct competition between them, thereby usu

58 FDI ALLIANCE | SEPTEMBER ISSUE 2018