Railroad Concentration, Market Shares, and Rates

Marvin Prater, Adam Sparger and Daniel O'Neil

No 164478, Research Reports from United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program

Abstract: Since the passage of the Staggers Act in 1980, many railroads have merged. The market share of Class I railroads has increased since then, while the number of Class I railroads has fallen to only seven. Through railroad mergers, rail-to-rail competition has been reduced, railroad market power has increased, and rail costs have fallen by over half in real terms. Over much of this period, most of these reduced costs were passed on to shippers as savings through lower rates. Since 2004, however, average rail rates per ton-mile for all commodities have climbed 36 percent, negating some of the savings over the period. Although some of these real rail rate increases have contributed to record rail profitability and capital investment, most of the rate increases are the result of increased railroad costs; real rail costs, adjusted for productivity, increased 29 percent during the same period. Although deregulation of railroads in 1980 produced more than 550 regional and local railroads throughout America, the 7 Class I railroads originated well over half the grain and oilseed shipments in 2011.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 8
Date: 2014-02
New Economics Papers: this item is included in nep-com, nep-his, nep-reg, nep-tre and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/164478/files/Concentration.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uamsrr:164478

DOI: 10.22004/ag.econ.164478

Access Statistics for this paper

More papers in Research Reports from United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().