Report: The American Freight Rail Network is Unguarded and At Risk

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Concern is growing about increased Chinese investment in the American economy.

So much so that the Trump administration has recently stepped up oversight into transactions that might affect national security. After Congress signed off on this expansion, the New York Times earlier this month reported “the administration signaled that it would apply its new authority very broadly and would review any foreign transaction involving a business that designs or produces technology related to 27 industries, including telecom, semiconductors and computers.”

Into this climate comes a new report from Brig. Gen. John Adams, U.S. Army (Ret.), on the security threats facing the American freight rail network. (You remember Gen. Adams -- he prepared for the Alliance for American Manufacturing a 2013 study of military supply chain vulnerabilities.)

To illustrate the threats facing rail, Adams’ report focuses on China’s national rail company, its recent entry in the American rail market, and its tie-in to the much-discussed Chinese industrial policy – Made in China 2025, which identifies rail as a critical manufacturing sector to dominate.

From the report:

China’s government has brought to bear a range of state subsidies, state financing, and other resources to support the market entry and market ascension objectives of its wholly government-owned, $33 billion conglomerate, China Railway and Rolling Stock Corporation (CRRC), an enterprise that – with more than 183,000 workers – is now the largest rolling stock producer in the world. While it is owned by the Chinese government, CRRC is controlled by the Communist Party of China, and it has set about to build a foothold in the U.S. market, with a near-term goal of overtaking our rail sector.

The CRRC is currently in pursuit of contracts “to sell transit cars to transit agencies in Boston, Chicago, New York, Los Angeles, and Philadelphia, among others,” the report notes. “The Chinese government is banking on the fact that once CRRC secures sufficient U.S. municipal transit contracts, it can pivot quickly and inexpensively toward the more strategically important freight rail sector.”

Now look: There’s nothing inherently wrong with offering low prices on rail cars to a cash-strapped American transit system. But there’s something concerning about a state-owned enterprise banking on that financial distress to gain a foothold in an important American infrastructure market.  

In fact, calling domestic freight rail “important” is kind of an understatement. The privately owned freight rail network, with approximately 140,000 miles of track, alone counts for 40 percent of freight moved by ton-miles in the United States. What’s more, the report observes that freight rail is a regular conduit of military equipment and potentially toxic and hazardous commodities. Quietly, freight rail is a remarkably important piece of our infrastructure – and relatively ungoverned by national security concerns.

Adams’ report suggests three fixes to address security concerns:

1) Develop comprehensive restrictions and additional reviews on investments from foreign state-backed entities in critical infrastructure integral to our national defense.

2) Ensure that appropriate federal agencies, in coordination with states and localities, develop robust standards for cyber and data integrity applicable to any rail or transit sector contracts involving foreign state-backed entities.

3) Strengthen oversight of Buy America laws to ensure that existing laws and regulations are adhered to in federally-funded transit and rail procurements including railcar manufacturing and explore new avenues to further protect the manufacturing capabilities of freight rail and other core domestic industries that are integral to support and maintain our defense industrial base.

It’s a lot to think over. Read the whole report here.

***

Reposted from AAM

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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