A multitude of panelists at the FTR Annual Conference once again tried to peek over the horizon to evaluate the future of freight. For me, the biggest take-away from the event is the growing likelihood of yet another freight disruption, courtesy of the U.S. government. And this one looms like an oncoming freight train with Congress at the throttle.

During a presentation on rail regulation, Karyn Booth, legal counsel for the National Industrial Transportation League and head of the transportation practice at the DC law firm Thompson Hine, laid out the regulatory Gordian knot that Congress has created with regard to the mandate for railroads to implement Positive Train Control.

In September 2008, a catastrophic collision occurred in California between a commuter train and a freight train. In its official report, the National Transportation Safety Board concluded that the accident, which killed 25 and injured many more, was caused by the inattention of the commuter train’s engineer, who was busy texting and missed a red signal. In response to the disaster, Congress whooped through, in a matter of a few months, a mandate for the railroads to fund and install Positive Train Control technology by Dec. 31, 2015, on every line that hosts passenger trains or freight trains carrying Toxic Inhalation Hazard materials (about 60,000 miles of track).

To date, the railroads have spent more than $5 billion on PTC implementation and expended a tremendous amount of work, but the job is not nearly complete. It is fair to say the rail effort was slow out of the blocks and could have proceeded faster. It certainly didn’t help that physical work was impeded by a year by the Federal Communications Commission, which declined to issue permits for the needed PTC antennas until it had finished its own lengthy internal review to determine whether it could issue such permits and what the review procedure would be.

But regardless of who is responsible for what portion of the blame, and whether the task was even achievable within the mandated time frame in the first place, it’s now obvious that it’s not going to get done in time. Even the Government Accountability Office has issued a report confirming this fact. So the question is — now what?

The Obama administration, in the form of acting Federal Railroad Administrator Sarah Feinberg, has stated that the law will be enforced unless Congress acts to extend it. The administration’s thought seems to be to impose fines or otherwise keep the pressure on the rails to expedite completion.

But the railroads have countered that as a matter of policy they will not willfully operate in violation of a federal law. At a minimum, this means that effective the end of the year they won’t allow passenger trains to operate over their lines (sorry Amtrak passengers and commuters), nor will they be able to accept Toxic Inhalation Hazard shipments (attention all those municipal water authorities using chlorine).

As a practical matter, this means the rails will need to stop accepting new TIH shipments well in advance of the deadline to ensure that all the TIH is off the rail by the time the PTC requirement takes effect. Add to this the fact that just about none of the commuter agencies nor Amtrak will have PTC in place in time on their rails either. Another problem is that by refusing to accept TIH shipments the railroads are running smack into a violation of their common carrier obligations, which mandate them to accept any shipments that are reasonably tendered.

From the standpoint of this and many other observers, it seems quite reasonable for a railroad to refuse a TIH shipment, as the risk exposure that would come from an accident involving TIH on a line that by government mandate should have had PTC would be incalculable. The common carrier mandate falls under the purview of the Surface Transportation Board, whose chairman has indicated that the answers to such a dilemma are not obvious and that he would greatly prefer the problem not reach the agency.

Of course, the problem would be solved if only Congress were to pass an extension. In fact, the Senate reauthorization of the Highway Bill contained such a provision. Unfortunately, the House of Representatives did not pass a companion bill as there is no agreement on how to fund it.

Of course, the stakes in this particular game of chicken are enormous. One would hope that sanity would prevail. The current funding for the Highway Trust Fund runs out on Oct. 31, although recent analysis has indicated there is enough money in the Fund to last until sometime in the second quarter of 2016. Presumably, sometime before year-end, Congress will pass yet another kick-the-can extension and perhaps that will include the PTC extension. Or maybe a stand-alone PTC extension bill will emerge from the chaos at the 11^th hour, although given recent performance, anything that actually requires congressional agreement and action is far from a sure bet.

The nation’s shippers can hardly be blamed if they shake their heads at yet another self-inflicted wound to the economy. All of Washington continues to wring its hands at the slow pace of the economic recovery. While it’s probably too much to hope that they will do something constructive to help, it’s too bad that we can’t even get them to get out of the way.