Information on Regulatory Reform Under the Staggers Rail Act of 1980

GAO developed information on selected aspects of the effects of the Staggers Rail Act of 1980 on shippers and railroads. Specifically, GAO reviewed the Interstate Commerce Commission's (ICC) revenue adequacy determinations as an indication of the railroads' financial condition, shippers' concerns about regulatory reform, and ICC actions to resolve shipper protests over railroad rate and service changes since the act.

The Staggers Rail Act reduced ICC regulation of the railroad industry and was intended to improve the industry's poor financial condition by allowing railroads more freedom in establishing rates and providing services. In the first year after the act, railroad financial performance generally improved while, during the second year, performance generally declined. ICC stated that evaluating the railroads' financial condition will be difficult until the economy improves. However, an industry spokesman stated that the flexibility of the act has already helped to minimize the effects of a weak economy. Selected shippers which GAO surveyed were dissatisfied with the ICC implementation of the act, citing such concerns as a lack of protection for shippers without access to more than one railroad and reduced competition among the railroads. The number of shippers protesting unreasonable, proposed railroad rate changes to ICC has decreased since the act's passage, but the decline does not necessarily imply satisfaction with regulatory reform.