A bill to amend the Tax Reform Act of 1984.

The 'Reliable Rail Service Act of 2025' amends section 11101 of title 49, United States Code, to compel rail carriers to provide transportation that meets shippers' 'reasonable service requirements' for timely, efficient, and reliable service. This bill specifically directs the Board to consider impacts of reductions in service frequency, employment levels, and equipment availability when determining compliance. This means rail carriers can no longer unilaterally reduce service or staff without facing regulatory penalties for failing to meet shipper needs. This is a direct regulatory burden on Class I railroads, forcing them to maintain higher service levels and operational capacity than they might otherwise choose for efficiency. There is no direct funding or appropriation in this bill. Instead, it creates a regulatory framework that shifts power and cost from shippers to rail carriers. Rail carriers will incur increased operational expenses to meet these new requirements, including maintaining higher staffing levels, more equipment, and more frequent service schedules. This will directly impact their bottom lines. Shippers, particularly those reliant on rail for bulk goods, will benefit from more predictable and reliable service, potentially reducing their logistics costs and supply chain disruptions. Historically, similar regulatory interventions in the rail sector have led to increased operational costs for carriers. For example, after the Staggers Rail Act of 1980 deregulated freight railroads, carriers gained significant pricing and service flexibility, leading to increased profitability. This bill represents a partial reversal of that trend, reintroducing regulatory oversight on service quality. While not a direct comparison, increased regulatory burdens on railroads in the early 20th century led to significant capital expenditures and reduced carrier profitability. More recently, calls for increased rail regulation following service disruptions in 2022 and 2023 saw a temporary dip in rail stock prices as investors anticipated potential legislative action. Specific losers are major publicly traded freight rail carriers. Union Pacific Corporation ($UNP), CSX Corporation ($CSX), Norfolk Southern Corporation ($NSC), and Canadian Pacific Kansas City Limited ($CP) will face increased operational costs and reduced flexibility. These companies operate under the current, more flexible regulatory environment, and this bill directly challenges that. Shippers, particularly in agriculture, mining, and manufacturing, stand to gain from improved service reliability, though no specific publicly traded shipper is solely dependent on rail to the extent that this bill would cause a significant stock price increase. This bill has been introduced in the Senate and referred to the Committee on Commerce, Science, and Transportation. The next step is committee consideration and potential markup. If it passes committee, it will proceed to a full Senate vote. Given the bipartisan sponsorship (Baldwin D-WI, Marshall R-KS) and the focus on shipper reliability, it has a moderate chance of advancing through the Senate. If it passes the Senate, it would then move to the House for consideration. The earliest this could become law is late 2025 or early 2026.