The Staggers Act and Texas Railroading Today

The Staggers Rail Act - also known as the Railroad Revitalization and Regulatory Reform Act - was passed by Congress in October, 1980.

It deregulated the railroad industry throughout the United States, removing stifling and competition-killing regulations that had been placed on the railroad industry back in the presidency of Grover Cleveland.

In particular, the Staggers Act eliminated the Interstate Commerce Commission’s control over rates and routes, and it allowed railroads to abandon unprofitable lines. It also allowed railroads to enter into agreements with other railroads for the joint use of tracks, equipment, and facilities.

The competition, innovation, and cooperation which followed reduced costs, improved efficiency, and increase revenues for the railroads. The Railroad Revitalization Act is one piece of legislation which truly lived up to its popular name.

In Texas, the Staggers Act quickly led to an increase in rail mergers and acquisitions. In 1982, the Southern Pacific Transportation Company and the Missouri Pacific Railroad merged to form the Union Pacific Railroad, which then became the largest railroad in Texas. The new regulatory environment ultimately helped bring about the 1996 vertical merger of the Burlington Northern and Santa Fe Railway – thus bringing together two railways operating in different regions on the country and with little overlap in their routes. The BNSF Railway is headquartered today in Fort Worth.

Less visibly but more importantly, the Staggers Act also led directly to a dramatic increase of railroad involvement in intermodal transportation, that is, the movement of goods using multiple modes of transportation such as truck, rail, and ship. After the Staggers Act, railways (and other developers) began building or expanding terminals designed specifically to transfer cargo from one mode of transportation to another. This seems commonplace now. But prior to the Staggers Act, intermodal transportation was mostly just a concept and a dream for customers.

Railway investment in intermodal transportation led directly to additional investment in new technologies and equipment, such as double-stack rail cars, where shipping containers are stacked on top of each other and moved by rail. It doesn’t take a math whiz to see that double-stacking allows railroads to move more cargo with fewer trains.

Today, the railroad industry in Texas contributes significantly to the Texas economy. The rail industry provides jobs and supports Texas agriculture, oil and gas and manufacturing.

The Texas railroad system is one of the largest in the United States, with over 10,000 miles of track. Several major railroads operate in Texas, including the Union Pacific, the BNSF Railway and the Kansas City Southern. Numerous short lines also operate in Texas.

Most importantly, the Texas rail system links the Texas economy with the rest of the United States, and through Texas ports, to the rest of the world. Dallas and Houston are major rail hubs, as is El Paso. The Union Pacific’s Santa Teresa Intermodal Terminal in El Paso is one of the busiest intermodal facilities in the country, handling a significant amount of international trade between the United States and Mexico. El Paso is also a key stop on the Sunset Route, a major rail route that connects Los Angeles to the Gulf of Mexico.

All in all, railways in Texas help make Texas one of the largest economies in the world.

The history of railroads in Texas is one of development and decline, success and failure, boom and bust but ultimately, in the longterm view, a story of perseverance and incredible vitality and productivity. Texas would be far less without its railroads.