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Judge rail industry by performance, not processes

Wednesday, April 5, 2017 6:17
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The Hill speaks with Marc Scribner on performance-based regulation as an alternative to inflexible standards for freight rail. 

As one example, the agency issued new rules last year that require each train maintain a minimum of two crew members on board while in service. Most firms do, in fact, currently maintain a crew of two on each train, but the need for human staff is diminishing as automation and autonomous operations become viable options in this sector, as they have in many others. Freight carriers that want to experiment with automation and cut redundant crew would have to go through the hugely costly and time-consuming process of petitioning the FRA to change its rules.

Rather than continue to prescribe inflexible standards, the FRA should move toward “performance-based” regulation, an idea explored in a recent report by Marc Scribner of the Competitive Enterprise Institute. The premise of performance-based regulation is that measuring outcomes—and not specific “processes, techniques, or procedures”—is the best regulatory approach, as it leaves industries the flexibility to meet and exceed tangible goals without accruing costly and unnecessary regulatory overhead.

In practice, this would mean that freight-rail lines must, for instance, not exceed certain track failure rates. Companies would face stiff consequences if they fail to meet the goal, but how they go about doing so would be left to their own judgment and ingenuity.

To some, moving away from requiring specific safety processes may appear to give industry too much leeway. However, it’s important to remember that firms already face powerful incentives to invest in safety. Accidents are tremendously costly and the reputational harm can be ruinous. Running a safe transportation service—be it on the nation’s roads, in its skies or on its rails—is simply good business.

Read the full article at The Hill. 

Tuesday, April 4, 2017
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Marc Scribner
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