The Staggers Rail Act of 1980 largely deregulated the American railroad industry and replaced the regulatory structure in place since the Interstate Commerce Act of 1887.
Since the enactment of the Staggers Act, economic and market conditions affecting the rail industry have changed greatly. Instead of 33 major railroads competing in the early 1980s, the rail industry has consolidated to six Class I freight railroads operating in the United States.
Rather than bankruptcy, the major railroads are now financially healthy.
Economists generally agree that railroad deregulation has been generally successful. Economic analysis also has shown that railroads and shippers have seen economic benefits since the Staggers Act’s enactment.
The Staggers Act, named for U.S. Rep. Harley Staggers, D-West Virginia, chair of the House Committee on Energy and Commerce, allowed railroads much greater freedom to meet the competitive pressures of other freight modes. It expedited rail abandonment procedures and reduced the time required to process merger applications.
The Staggers Act allowed rail carriers to set their own rates unless the ICC found no effective competition, phasing out industrywide rate increases. Rail shippers and carriers could make contracts without ICC review unless it would interfere with common carrier service.
It enabled railroads to invest in plant and equipment with greater certainty that such investments would be profitable.
“By stripping away needless and costly regulation in favor of marketplace forces wherever possible, this act will help assure a strong and healthy future for our Nation’s railroads and the men and women who work for them,” President Jimmy Carter said in signing the measure.
“It will benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service to shipper needs,” Carter added. “America’s consumers will benefit, for rather than face the prospect of [the] continuing deterioration of rail freight service, consumers can be assured of improved railroads delivering their goods with dispatch.”
