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The Federal Railroad Administration Makes the Right Call on Railroad Staffing Requirements

The Federal Railroad Administration Makes the Right Call on Railroad Staffing Requirements

May 30, 2019

Regulatory reform is difficult to accomplish on a large scale because it requires a detailed examination of specific market factors, which takes time and expertise to accomplish. On each issue, regulators must balance the desire to promote competition and innovation with the need to protect public safety. A proper understanding of both is difficult to achieve. An example is a recent decision by the Federal Railroad Administration (FRA) to withdraw a 2016 notice of proposed rulemaking (NPRM) that required U.S. railroads to have at least two crew members on most routes. In a step in the right direction, the FRA withdrew the notice. Meanwhile the FRA has recently proposed rules that will require railroads to conduct safety risk reduction programs to identify and mitigate hazards. The result should be to improve public safety while still allowing continuous innovation, including automation.

New technology is speeding the automation of several modes of transportation, including railroads. Using new technology has allowed railroads in both the United States and Europe to begin implementing one-person crews over some routes. The recent withdrawal of the two-person crew requirement was an acknowledgement that the original NPRM lacked any evidentiary basis. Railroad safety has been improving over the long-term. Moreover, because the FRA did not require information on crew sizes when an accident occurred, it lacked evidence that one-person crews were more dangerous than two-person crews. The NPRM stated that the FRA “cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.”

In fact, what data existed pointed in the other direction. The railroad industry is deep into the process of installing positive train control (PTC) technology that can “determine the precise location, direction, and speed of trains; warn train operators of potential problems; and take immediate action if the operator does not respond to the warning provided by the PTC system.” An Oliver Wyman study commissioned by the Association of American Railroads concluded that “single-person train crew operations were as safe as multiple-person train crew operations.” Analyzing the record overseas, it found little evidence that European systems, which often combine one-person crews with PCT, were less safe. In fact, by many measures they outperformed American railroads. Finally, the study found that moving to a combination of PTC and one-person crews where appropriate could save the industry $900 million a year in 2020, rising to $1.9 billion by the end of the decade. We can expect some portion of this saving to go to customers in the form of reduced charges and some to go to capital expenditures to improve performance.

The original proposed rule contained a detailed discussion of two recent railroad accidents, neither of which involved a one-person crew operating a moving train. The first involved a failure to properly set brakes on a stopped train. The Canadian regulator was unable to conclude that a one-person crew contributed to the accident. The argument in the second case seemed to be that the existence of a larger crew helped the railroad respond to the accident. This overlooks the fact that a main purpose of automation is to prevent accidents from occurring in the first place. According to the FRA, in 2017 the leading cause (38 percent) of railroad accidents not occurring at highway grade crossings were due to human error. It is very likely that in the medium-term automation will prevent these incidents. But first it must be implemented.

In announcing its withdrawal, the FRA stated that it was preempting state laws mandating two-person crews. There is precedent for an agency preempting an area without issuing its own regulation. In this case, the FRA has implemented a number of other rules implementing safety requirements. Requirements regarding crew size, especially regarding interstate routes, are exactly the type of issue that calls for a nation-wide standard. This does not mean that all trains will run with one-person crews in the near future. Crew standards are subject to collective bargaining with the industry’s unions. Second, railroads already have strong incentives not to jeopardize safety, including the loss of valuable capital, operating delays, civil suits, a loss of public trust, and possible regulatory action. Finally, the technology must continue to advance. More likely, implementation will continue to be gradual as specific circumstances allow.

Withdrawal of the proposed regulation also does not signal the FRA’s withdrawal from the issue. It is in the process of requiring railroads to implement safety risk reduction programs that identify and analyze possible hazards and develop strategies (including changes in crew size) to mitigate that risk. And in March of 2018, it issued a public request for information about automation in railroads. It is also likely to change its reporting requirements to gather more data on the impact of crew-size on safety, giving it a firmer base on which to make future decisions.

The broad history of technology shows that automation complements rather than eliminates jobs. Although some tasks (often the most dangerous or tedious ones) no longer require a human, labor soon gets shifted to high-value tasks. In the process, public safety is often improved. We should expect the same here. The industry’s strong record of improving safety and its investment in PCT should both be reassuring. Mandating minimum crew sizes in the absence of strong evidence would have added costs without increasing public safety, reducing the return on investment from further technological progress and reducing investment. The FRA made the right decision.

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