What's Happening?
The Federal Railroad Administration (FRA) has been criticized for its approach to deregulation, which largely consists of administrative updates and codifying existing practices rather than implementing structural reforms. The agency reported 65 deregulatory
actions between January 2025 and late 2026, fulfilling an executive mandate for deregulation. However, a review of these actions indicates that most are clerical, such as changing physical addresses, updating web links, and clarifying internal definitions. For instance, 35 of these actions were administrative updates finalized around July 1, 2025. The FRA claims these actions improve readability and clarify language, but for approximately 95% of them, no economic savings were quantified. The few actions with quantified savings, such as extending compliance dates for Emergency Escape Breathing Apparatus (EEBA) Standards or codifying existing waivers for Reflectorization of Rail Freight Rolling Stock, primarily postpone costs or formalize practices already in place, offering minimal new economic relief to the industry.
Why It's Important?
This approach to deregulation by the FRA is significant because it suggests a focus on meeting numerical targets rather than achieving substantive economic impact or structural reform within the U.S. rail industry. By prioritizing administrative updates and codifying existing waivers, the agency may be missing opportunities to address fundamental bottlenecks that hinder competitiveness, capital investment, and operational efficiency. The lack of broad, measurable deregulation means that the rail industry continues to operate under prescriptive command-and-control frameworks, which dictate operational specifics rather than allowing for performance-based standards that could foster innovation and efficiency. This could lead to a less adaptable and potentially more costly rail system, impacting freight movement, supply chains, and ultimately, consumer prices across the nation. The current strategy may also perpetuate a cycle where agencies prioritize 'performative compliance' over genuine, impactful policy changes.
What's Next?
For the U.S. rail industry, the current trajectory suggests a continuation of regulatory practices that offer limited new relief. Future efforts towards deregulation would need to shift significantly from administrative housekeeping to tackling substantive issues. This would involve moving away from rigid mandates, such as crew-size requirements and prescriptive inspection rules, towards performance-based standards that allow railroads more flexibility in achieving safety goals, potentially incorporating modern technologies like autonomous track inspection systems. Additionally, streamlining review timelines under the National Environmental Policy Act (NEPA) for critical freight infrastructure projects could unlock significant investment and operational improvements. Without such a shift, the industry may continue to face burdens that impede its ability to modernize and operate more efficiently, potentially affecting its long-term competitiveness and capacity to support national economic growth.
Beyond the Headlines
The FRA's current deregulatory strategy highlights a broader issue within administrative governance: the potential for agencies to prioritize the appearance of compliance with mandates over the actual achievement of their intended goals. This 'Goodhart's law' phenomenon, where a measure becomes a target and ceases to be a good measure, can lead to a system where regulatory bodies focus on easily quantifiable outputs (like the number of deregulatory actions) rather than the qualitative impact or structural changes needed. This approach can mask a lack of genuine reform, creating an illusion of progress while underlying issues persist. For the U.S., this could mean that critical sectors like rail transportation remain encumbered by outdated or inefficient regulations, hindering innovation and economic dynamism. It also raises questions about accountability and the effectiveness of oversight mechanisms designed to ensure that regulatory actions serve the public interest and foster a competitive economic environment.
