"As I have said many times before, we need a rail system that works not just for the freight railroads, but for all -- shippers, passengers, and consumers," committee Chairman Jay Rockefeller, D-West Virginia, said in his opening statement. "I am proud that for the first time in 30 years, this committee reported out a bill -- in a bipartisan way -- that would update our rail regulations to reflect the economic realities of 2010."

U.S. Deputy Transportation Secretary John Porcari appeared before the committee to provide an update on the National Rail Plan, a long-term strategy for the nation's rail system. Porcari also offered insight regarding the U.S. Department of Transportation's philosophy concerning rail transport.

"America's economy depends upon an efficient, safe, and reliable transportation system. The Obama administration believes that rail can play an increasingly important role in meeting our freight and passenger mobility needs," Porcari said in his opening statement. "It also requires that our private sector partners' policies recognize that the larger public interest in rail transportation, in particular passenger rail transportation, is foundational to achieving that part of the larger vision that they are most interested in."

Porcari explained that USDOT believes passenger rail needs to be given a higher priority and that a balance needs to be forged with freight companies so that the tracks can be shared in a manner that benefits everyone. Porcari also said that he hopes additional funding will continue to be made available to states for freight, passenger, and high-speed rail.

The Federal Railroad Administration was expected to release a National Rail Plan this week, but Porcari did not have a final document to share with senators; he was only able to update the committee on the report's progress.

FRA's rail plan is "being readied for release pending completion of final review within the executive branch," agency spokesman Rob Kulat wrote in an e-mail. "We expect to issue the update in the very near future."

Rockefeller Releases Report Calling for Greater Freight Industry Regulation

In advance of the committee's hearing Wednesday, Rockefeller released a report on the current state of the rail industry. It cites a need for increased regulation to create a level playing field and to boost the economy.

The report, "The Current Financial State of the Class I Freight Rail Industry," details how the Staggers Rail Act of 1980, which largely deregulated the freight rail industry, has become outdated and needs to be adjusted to consider the current economic climate.

"If you listen to what the railroads tell their regulators in Washington, they are barely keeping the lights on," Rockefeller said in a statement. "But the reality is that Class I railroads have become some of the most profitable companies in the United States. They enjoy substantial market power, yet the current railroad regulatory system regards them as incapable of both making needed capital investments and remaining healthy. It's past time to update our rail policies to change a system that allows railroads to grossly overcharge captive shippers and to better meet our nation's future transportation needs."

Witness Daniel Elliot III, chairman of the Surface Transportation Board; Rockefeller; and several other members of the committee spoke in support of shippers that pay fares to rail companies to ship their goods.

The Staggers Act was passed at a time when the rail industry was struggling. It deregulated the industry, allowing freight companies to set whatever prices they want with little oversight, critics argue. Those critics contend the act allows freight railroads to create monopolies, giving prospective shippers little choice but to pay whatever price is set to send their goods around the country.

During the hearing, Rockefeller spoke in support of a bill, S 2889, which would establish new regulations for the railroad industry. The committee passed the bill last December, but it has not seen Senate floor action. Rockefeller also shared his opinion with Elliot that the Surface Transportation Board should take a bigger role in regulating the rail industry.

The 15-page committee report is available at tinyurl.com/freight-report. A video of this hearing as well as all witness statements are available at tiny.cc/x9hmp.