Railroads Seek More Aid On Disputed Traffic Idea

Published: Nov 7, 2007

Wendell Cox learned a lesson about the U.S. rail industry in China six years ago when he saw coal trucks crowding the roads.

In the United States, trains haul coal and keep it off the highways. But what if the rails became too congested? Cox wondered. What if people had to share the U.S. roads with thousands of coal trucks?

Cox, a transportation researcher, soon turned this flash of an idea into an annual contract with the Association of American Railroads, the trade group that pushes legislation for the rail industry.

After receiving tens of millions from Florida and other states over the past few years, the railroads are asking Congress for a tax credit worth at least $1 billion a year for new track, bridges and tunnels. They are using Cox to make their case.

Described as an independent researcher, Cox is writing commentaries and appearing on television news shows with a simple message: Expanding the railroads takes trucks off the highway.

The problem is, the argument is flawed, say other transportation researchers.

"This is a whole new area with far too little research," said Joseph Morris, with the Transportation Research Board, which studied the question of tax money going to rail improvement projects. "No one is looking backward" at past tax-supported rail projects to see whether they eased road congestion as promised.

'Almost Naive'

"Trains take the load off highways," wrote CSX chief Michael Ward in a recent commentary that ran in several Florida newspapers, including The Tampa Tribune. "A single freight train can deliver as many products as 280 trucks," Ward wrote, repeating the calculation at the center of Cox's research.

Ward was making the case for a Florida plan to give the company nearly a half billion dollars to buy 61 miles of CSX tracks in the Orlando area and pay for improvements on other CSX tracks into a major hub planned for Polk County. Florida and other states have given CSX and other rail companies tens of millions of dollars in the past few years.

These grants and the proposed federal tax credits aren't for safety measures at public crossings. Government has paid railroads billions over the years to build, repair and maintain crossing signals at public roads. The requested money is for business expansion in areas the public never uses.

State Department of Transportation rail office administrator Ed Lee echoed Ward and Cox in his explanation of why Florida gives freight railroads money. "We're trying to take trucks off the roads. That's my top priority."

That reasoning riles David Hartgen, a professor of transportation studies at the University of North Carolina at Charlotte. It's "almost naive," he said.

"The railroads have done a good job of aligning themselves with the environmental and anti-congestion folks," he said.

There's something missing from their calculations, however, said Michael Lawrence, president of Jack Faucett Associates, a consulting firm based in Bethesda, Md. That's the issue of whether shippers who use the highways will make the switch to the rails just because the railroads can run more trains.

"That's the $64,000 question," he said. And the answer is often no.

"These shippers will make these decisions based on economics," Hartgen said, "and they're not going to consider the environment, safety and energy efficiency." Those benefits are "microscopically trivial" compared to the speed of a truck over a freight train.

"The performance levels of trucks are quite high," said W. Bruce Allen, a business and transportation professor at the University of Pennsylvania's Wharton School of Business. "Railroad performance is still basically awful." It could improve with these expansions, but until that happens, shippers won't stop using trucks, he said.

"There's no commissar saying you must go by rail."

Cox concedes that cargo won't automatically shift from trucks to trains just because of track improvements. "But a lot will," he said.

He doesn't know how much. That's not what he researched for his railroad association studies.

"My whole bent," Cox said, "has been to try to market the idea that greater use of rail has potential in terms of controlling traffic congestion."

Passenger Versus Freight Rail

Cox's work for the association began after he returned from China in 2001 and wrote a report for the Texas Public Policy Foundation, where he was a senior fellow. Trucks "have a disproportionately high impact on traffic congestion," he wrote. "That impact would be even greater if it was not for the strong freight rail industry."

The foundation champions conservative causes. They challenge the liberal bias they see in school textbooks, for instance, and say man's role in global warming is an "imaginary problem."

Officials at the Association of American Railroads read Cox's report, said spokesman Kelly Donley, and hired him to write more. She would not say how much the association is paying him.

Cox's experience with rail issues goes back to the late 1970s when he was on the Los Angeles commission that created light rail in the city. Over time, he said, he came to see it as a major waste of money.

"I and others felt like it had the potential to reduce traffic congestion, but it hasn't taken the first car off the road," he said.

In 1999, then-House Speaker Newt Gingrich appointed him to the Amtrak Reform Council, where he argued that Amtrak had failed to become self-sufficient and should be restructured.

Advocates of passenger rail have condemned Cox's ideas on public rail transit as extreme, even nutty, saying he travels the country to kill transit projects wherever he can. "He'll work for anyone who wants to stop passenger service," said Ross Capon, of the National Association of Railroad Passengers.

Among the groups that hired Cox was Florida's conservative James Madison Institute. He wrote a report in 1998 for the institute condemning the state's proposed High-Speed Rail program as a "financial disaster." Florida voters approved the system in 2000, then reversed their position in 2004. CSX gave $50,000 to the "Derail the Bullet Train" campaign.

Cox defended his work, saying his goal is to save taxpayers money. Passenger systems don't reduce congestion, he says, but freight rail is different. Moving more freight on trains instead of trucks will open up the highways, he said, primarily because of the size of the trucks.

Bypassing the key issue of whether shippers would actually shift their loads to the rails, he simply posed a question: What if 25 percent of them switched in the next two decades?

Using government studies of traffic volumes, fuel emissions and delays caused by highway congestion, he calculated what it would mean to commuters across the country to be traveling on highways with 25 percent fewer trucks.

His conclusions caught the attention of newspapers and trade magazines across the country. Some noted the railroad association paid for the research; some didn't.

A 2004 story in the Fort Worth Star-Telegram, for instance, began, "By shifting 25 percent of freight from trucks to trains by 2025, Fort Worth commuters would spend 44 hours less each year sitting in traffic." The story quoted Cox, but never mentioned the Association of American Railroads.

This past summer, the Chicago Sun-Times, The (Baltimore) Sun and other newspapers ran Cox's commentaries saying that freight improvements could save highway commuters both time and money. He urged readers to support the proposed railroad tax credit for track expansion, saying "We must act now." The articles never mentioned Cox's connection to the railroad association and its support of the federal tax credit bill.

In an e-mail response to questions from the Tribune, Cox said: "From the very beginning, I have been open about the fact that this research was sponsored by the Association of American Railroads."

The federal tax credit would give rail companies a break worth 25 percent of what they spend on track improvements. The rail association says that the companies now spend $15 billion to $17 billion every year on tracks and equipment but receive only a fraction of that amount in government support.

U.S. Rep. Kendrick Meek, D-Miami, is the bill's sponsor in the House, where it's waiting to be considered by the Ways and Means Committee. On the Senate side, the bill has been referred to the Finance Committee. Its sponsor is Mississippi Republican Sen. Trent Lott.

Meek has said the bill was important because it "creates jobs, helps Florida citizens, lessens traffic and lessens dependence on foreign oil."

Not That Simple

Though possibly the first, Cox isn't the only consultant to promote the idea that spending more money on rail projects will ease highway congestion.

A group called Cambridge Systematics, of Cambridge, Mass., expanded on Cox's ideas in a 2003 report for the American Association of State Highway Officials.

Although trucks carry most freight in the United States, increased consumer demand was putting pressure on the rails, too, it said. And without a major expansion over the next two decades, tons of cargo that usually ran by rail could be shifted to the highways.

This year the American Association of Railroads hired Cambridge to write a similar report, this one highlighting the importance of the proposed federal tax credit for freight rail expansion.

Cambridge also works for several state transportation agencies, including Florida.

In 2003-04, it helped Florida transportation officials design the statewide system that enabled rail companies and air and sea ports to get tax money that previously went only to highway programs.

It also helped produce the state's most recent rail plan. "The rail industry provides numerous public benefits that warrant taxpayer participation in capital improvements," it says. "These range from economic development, to reduced highway congestion, to improved environmental quality and safety."

Cambridge designed the method Florida uses to show that taxpayers are getting a good deal from freight rail projects. It relies on the same assumption underlying Cox's work: A train can carry dozens of truckloads of material.

"It's generally agreed that each train car carries three to four truckloads," said Cambridge's Robert Hunt. So if a rail company says that its project will add 100 cars to a train, the state generally assumes that it will take at least 300 trucks off the roads.

Florida transportation officials rely primarily on this one calculation when adding up what the public gets out of the state's investment in rail projects. It's provided the basis for their approval of about 15 projects worth nearly $80 million.

Hunt's colleague, Alan Myers, agreed that the calculation was simplistic. It "won't work with every project," he said, but "there are places where it makes sense. … Where railroads are highly competitive" with trucks.

Morris, of the Transportation Research Board, said the only way to know whether a rail project is worth tax support is to analyze it in detail, to know, for instance, what the trains will carry, where they are going, the roads along the route and what would happen to that freight without the rail project.

"There should be some independent estimate of what the project is worth to the railroad," so the state has some negotiating power, he said, describing a process that's more detailed than Florida's.

"You have to make the case project by project."

Reporter Lindsay Peterson can be reached at (813) 259-7934 or lpeterson@tampatrib.com