History of Railroads
Between 1970 and 1980, Congress passed major pieces of legislation to prevent any further decline of the railroad industry. These new laws initiated a large-scale consolidation of railroad operations. Since this legislation, more than 40 mergers and consolidations have decreased the number of Class 1 railroads from over 40 to just seven. Now, four of these railroads control more than 94 percent of the industry’s revenue and own over 90 percent of the country’s track miles.

The lack of competition has led to several issues that affect the utility and agricultural industries.

Today, the Surface Transportation Board (STB) has the authority to set maximum rates and take action if a railroad is found to have market dominance. The STB is a regulatory agency that Congress charged with resolving railroad rates and service disputes. The only jurisdiction of railroads that Wisconsin state government has is the oversight of the safety of railroad crossings.

Over the past year, several groups have taken a closer look at the impacts of rising railroad shipping costs. Many have questioned the consolidation in past years and whether this lack of competition among the railroad companies has an impact on rising shipment costs and unreliable shipping service.

Forum with Surface Transportation Board
In September 2007, BadgerCure, a coalition of utilities, agriculture and manufacturing industries and others interested in freight rail shipping service rates, hosted a forum with STB chair Charles Nottingham.  At this forum, the PSC and DATCP called for major reform of the nation’s railroad system, citing the lack of reliable and affordable rail service as a threat to economic growth and stability in the state and nation’s agriculture and energy sectors. 

Public Hearings
In September 2006, the Public Service Commission of Wisconsin (PSC) and the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) held fact-finding meetings across the state to examine how railroad shipping costs and delays are impacting Wisconsin’s economy.

The goal was to determine the extent of the problem the state is facing and its impacts on industry, agriculture and energy. There were three hearings held around the state, one in each of Milwaukee, La Crosse and Green Bay.

PSC Chairperson Dan Ebert and DATCP Secretary Rod Nilsestuen, as well as experts from industry, agribusiness and energy fields, provided information and testimony, and raised a number of questions about the rail industry.  Written testimony and information about the speakers can be found on the respective webpages about each hearing.  The information shared at the hearings will be reviewed by interested parties and will be included as part of the PSC’s investigation of fuel costs and what affects the rail industry has on it.

Next Steps
As follow up to the public hearings and forum, the PSC and DATCP will continue their research into the railroad industry.  As developed, information will be posted on this website.

DATCP and PSC Voice Support for Federal Rail Energy Transportation Advisory Committee

Letter of Support for New Rail Line (80 kb)

Joint Comments to the Surface Transportation Board (68 kb)