The rail industry is a major part of the problem
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Illustration: Peter and Maria Hoey

 

Dear reader,



In the midst of a supply chain crunch during the pandemic, the
nation's biggest rail companies have been shutting down services and
laying off workers. You would think that higher demand to move goods
would lead to expanded service. But the rail industry is actually
profiting handsomely from creating bottlenecks.

And they're being directed to do this by Wall Street. As Matthew Jinoo
Buck writes in an intricate breakdown of the rail industry, "Wall
Street judges railroads' success based in part on spending less money
running the railroad and more on stock buybacks or dividends."

In 1980, there were 40 Class I railroads in America. After deregulation,
there are now seven, and really four majors split the country in half,
with two covering the East and two the West. This monopolization and
focus on "precision scheduled railroading" (which means skimping on
service, resilience, and safety) has made rail a key hindrance to a more
functional supply chain.

You can read Matthew Buck's vital story here.
  

The story is part of our special issue, How We Broke the Supply Chain,
that explains how bad policies created the disaster that is causing
shortages and raising costs.
You can read all of the stories at
prospect.org/supplychain

And, you can help support this work by becoming a member today
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of the reader support we receive funds our editorial mission:
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If you're already a Prospect member, THANK YOU!

We can't do special issues like this without you. And if the Prospect
doesn't do it, there aren't many other places that will.

I WANT TO SUPPORT THIS IMPORTANT WORK

Thank you for your consideration.

Sincerely,
David Dayen, Executive Editor
The American Prospect

 

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