Effectiveness of Competitive Forces to Limit Rail Rate Increases on Export Wheat Traffic

摘要

The report summarizes results of research conducted to determine the effectiveness of competition to limit increases in rail rate levels under conditions of rail deregulation. The study focuses on the ability of intramodal and intermodal competition to constrain rail rate increases on South Plains export wheat movement. In the intramodal analysis it is assumed that the dominant regional railroad alters its rates without any corresponding changes by other transportation firms. The intermodal competitive analysis centers on the ability of competing modes (truck and truck-barge combination) to constrain rail rate increases. In the intermodal analysis all railroads adjust rates in unison. The effectiveness of intermodal competition in restraining railroads is examined in a short- and long-run time frame. The long-run analysis permits new investment in river facilities to accommodate increased barge movement. The analysis is designed to measure the extent that dominant carrier (intramodal analysis) or all railroads acting in unison (intermodal analysis) could increase rate levels. The railroads are assumed to increase rate levels until revenue above variable cost commences to decrease.