(The following article by Don Phillips was published in the Washington Post.)
WASHINGTON — Linda J. Morgan, the federal official who saw the railroad industry through a decade of turbulent mergers, said she will resign from the Surface Transportation Board on April 8, almost nine months before her term expires.
Morgan, a Democrat who had a cordial relationship with Bush administration officials, had been asked to remain as chairman until the administration could name a replacement, a process that took a year. Roger P. Nober, a Transportation Department official, was named chairman of the three-person board in December. Morgan’s departure as a member had been expected. She said she will not decide on a future career until after she leaves.
Chairman of that board and its predecessor, the Interstate Commerce Commission, since March 23, 1995, Morgan presided over the Union Pacific-Southern Pacific merger in 1996 that resulted in a meltdown in rail service nationwide, and the 1999 division of Conrail between Norfolk Southern and CSX Transportation, which created serious service problems that were not solved for months. Those systems have recovered from their problems and service appears to be improving.
The Surface Transportation Board, in addition to approving rail mergers, also has some powers in regulating the commercial end of the railroad industry.
Morgan said she believes that the railroad industry has emerged from the merger period better, because the companies learned to pay closer attention to their customers and to day-by-day operations.
“This period without mergers has been good for the industry,” she said. “For a time, mergers were the answer to everything.”
But Morgan said she fears for the future of freight rail because the railroads, shippers, Congress and states are polarized over whether government should impose conditions to guarantee greater competition, which would cause freight rates to fall. Such “open access” proposals could hurt customers more than they help, she said.
Everyone is trying to gain narrow advantage rather than engaging in a debate on what role railroads should play in the future, she said.
Morgan said that freight railroads, although more successful than ever, do not yet earn enough to pay for the cost of maintaining and expanding their infrastructure. But she said the railroads may have a difficult time investing in infrastructure they would need to move more freight in the future, if some customers and Congress continue to push for even lower rates.
“Railroads can’t be all things to all people,” she said. “They can’t be giving people lower rates but then sustaining the network they have in place today and opening up their line to commuters for some sort of low cost. You can’t do it all. Somehow the finances have to make sense.”
Unless there is a comprehensive and sensible debate, Morgan said, Congress and shippers may some day find that their only two choices are to let the industry shrink or to let the federal government take over the railroads or railroad infrastructure at a high cost.
“The customers want lower rates,” she said. “But do they also understand that over time, over some period of time, if all these rates keep coming down, then there won’t be the revenue coming into the system to sustain the network that exists today in the private sector? Then will that mean the customers will lose service that they don’t want to lose, and will they be prepared for that?
“Will members of Congress understand that if we go in certain directions from a policy position, and that ends up with a situation where there are not enough revenues coming into the system to sustain this rail network in the private sector, will they then be prepared to do what’s necessary to do the next thing? . . . I want to make sure that everybody understands that is the challenge for the industry.”