After several train derailments in recent weeks, many Americans are beginning to ask questions of privately owned rail companies. On March 14, the Ohio Attorney General David Yost filed a 58-count suit against Norfolk Southern, the company involved in the recent derailment and toxic spill in East Palestine, Ohio. In a press conference, Yost said, “The fallout from this highly preventable incident may continue for years to come, and there’s still so much we don’t know about the long-term effects on our air, water and soil.” And while Norfolk Southern has seemingly agreed to compensate property damage and relocation costs, these derailments have only demonstrated that private ownership of railroads in America is failing.
The East Palestine disaster came only two months after a high profile contract dispute between union rail workers and companies, which was eventually forcibly ended by President Biden and Congress. In response to both of these, Rail Workers United (RWU), an organization made up of members of every national rail union, officially called for railroad nationalization.
In their resolution, RWU cited several grievances with the current private model, including how companies only implement “measures that deliver short-term gains for stockholders but at the expense of the long-term health and vitality of the industry.” And indeed, we can see how the profit-motive drives private rail companies to cut corners with safety and cause horrific negative externalities on unsuspecting communities.
In Europe, the vast majority of rails are state-owned. Even in the United Kingdom, which privatized their system in 1997, many of the lines are currently operated by other countries’ national rail companies. If we compare safety, we see that U.S. Class I railroads have more than double the accident rate than their European counterparts per million train-km. Nationalization would greatly increase the public accountability of rail companies. When accidents like the East Palestine derailment happen, necessary safety regulations can be made much more easily and with less pushback when profit isn’t a factor.
For a natural experiment between public and private ownership, we can look at the United Kingdom, as I previously mentioned. In 2012, after 15 years of privatization, a poll showed that 70% of the British public wanted to renationalize their rail system. The process of franchising rail lines set up by the British government involves a complex network of contractors and sub-contractors and in 2020, it was scrapped entirely. Instead, the conservative government renationalized part of the railways and set up a new system of franchising, all organized under the planned agency: “Great British Railways”. In Scotland, the largest train operator was renationalized in 2022. All of this makes the U.K. a clear example of the success of state ownership and the failure of the private model.
But one doesn’t even have to look abroad for an example of a public rail system. From 1917-1920, the United States Railroad Administration (USRA) was the nationalized rail network in America. Created because of widespread technological unpreparedness during World War I, the USRA invested in and standardized American rail cars. These measures increased shipping volume and efficiency to meet Europe’s demands for munitions. It completely modernized the American rail system and the overwhelming majority of railroad workers supported continued nationalization.
A publicly owned rail system, with further investment, would be more efficient and safer than our current one. As the private rail companies continue to financialize and place less of an emphasis on safety, disasters like the one in East Palestine will continue to occur. Nationalization is the only way to have a system which serves the people and not equity holders.
Amtrack is a perfect example of what happens when government gets involved in rail. It is expensive, inefficient, and a tax dollar black hole.