New Report: Small Business Plays a Big Role in Freight Railroad System, Re-Regulation Would Be a Big Negative for Entrepreneurs & U.S. Economy

By at 6 March, 2018, 2:46 pm


FOR IMMEDIATE RELEASE                                                     


Washington, D.C. – Today, the Small Business & Entrepreneurship Council (SBE Council) released a report titled “All Aboard! Entrepreneurs and Small Business Power America’s Freight Railroads.”

The report spells out the big role that entrepreneurs and small businesses play in the freight railroad system, how deregulation nearly 40 years ago saved the failing industry and why re-regulation is a very bad idea. Greater market freedom meant that railroads could make decisions based on market conditions, leading to vast improvements in industry efficiency and productivity, capital investment, maintenance and safety, and profitability, as well as reduced costs and enhanced service for customers. The U.S. system has become one of the world’s leaders, playing a vital role in the U.S. economy.

SBE Council chief economist Raymond J. Keating noted, “It also must be understood that the story of America’s freight railroads is a small business story.  The U.S. economy very much is an entrepreneurial, small business economy, with smaller firms being the majority in most industries, and that is no different in the sectors directly and indirectly impacted by freight railroads.”

According to SBE Council’s analysis of U.S. Census Bureau data, the role of small business in key industry sectors directly or indirectly affected by freight railroads is significant. For example:

● In all but one of the 13 industries highlighted, the majority of employer firms were small businesses with fewer than 20 employees – ranging from 51.2 percent of firms in the warehousing and storage sector to 93.2 percent in the agricultural sector.

● In all 13 sectors, firms with fewer than 100 employees made up at least 69 percent of employer firms – ranging from 69.7 percent in warehousing and storage to 99.0 percent in construction.

● Among all 13 sectors, the percentage of firms with fewer than 500 workers ranged from 83.3 percent again in warehousing and storage to 99.8 percent in construction.

● And among key railway support sectors, in the Support Activities for Rail Transportation sector, 63.2 percent of firms had fewer than 20 workers and 81.2 percent fewer than 100 workers, and in the Railroad Rolling Stock Manufacturing industry, which makes or rebuilds locomotives, railroad cars and equipment, 43.2 percent had fewer than 50 workers and 69.8 percent fewer than 100.

Keating pointed out that efforts or proposals to re-regulate the industry would spell disaster and hardship for many small businesses, the industry as a whole and the U.S. economy:

“Unfortunately, an effort has persisted to impose destructive regulations on freight railroads – to, in effect, re-regulate – pushing to re-impose price controls on the railroad industry, and inflict ‘forced access’ whereby railroads would be forced to open up their rail lines to competitors. If imposed, such measures would be surefire ways of undermining profitability, investment and service. Specifically, such government controls would diminish the ability and incentive to invest in rail capacity, maintenance and innovation; generate additional costs; and strike blows against reliability, speed, efficiency and safety. That would do real harm to the U.S. economy, to consumers, and to the small businesses at work in and around the railroad industry.”

Railroad Day is March 7, and SBE Council will distribute the report to Members of Congress, key policy staff within the Administration, and conduct general outreach to its small business members and the media.

To access a PDF copy of the report, click here.


Raymond J. Keating

631-909-1122 or

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil

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