Rail Competition Changes Since the Staggers Act

Prater, Marvin E.; Casavant, Ken; Jessup, Eric; Blanton, Bruce; Bahizi, Pierre; Nibarger, Daniel; Weingram, Isaac

doi:10.5399/osu/jtrf.49.3.2596

Cited by 5 publications

(10 citation statements)

References 8 publications

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“…According to Winston and Grimm (2000), the net annual benefits to shippers were more than $12 billion in 1999 dollars in the first decade following passage of the Staggers Act. Shippers have benefited from 20 years of declining rail rates (inflation adjusted revenue per ton-mile) as well as the preservation of rural area lines sold or leased to short line railroads (Prater 2010).…”

Section: Introductionmentioning

confidence: 99%

State Variation in Railroad Wheat Rates

Babcock

McKamey

2014

J Transp Res Forum

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Wheat shippers in the Central Plains states have no cost effective transportation alternative to railroads. Wheat produced in these areas moves long distances to domestic processing and consumption locations or to ports for export. Wheat shippers in the Great Plains don’t have direct access to barge loading locations and trucks provide no intermodal competition for these movements. Wheat shippers in Montana and North Dakota are highly dependent on rail transport because they are distant from barge loading locations and intra-railroad competition is limited. In North Dakota, the BNSF controls 78% of the Class I rail mileage, and in Montana, the BNSF controls 94%. Montana ships nearly 100% of its wheat by rail.Unlike Montana and North Dakota, the BNSF and UP have roughly equal track mileage in Kansas. The BNSF has 44% of the Class I rail mileage and the UP, 55%. Also, both railroads serve the major Kansas grain storage and market centers. A 2010 USDA study found that in 1988, Montana and North Dakota had the highest rail grain revenue per ton-mile of the 10 major grain producing states. By 2007 this was no longer the case. The overall objective of the paper is to investigate railroad pricing behavior for the shipment of North Dakota, Kansas, and Montana wheat. Specific objectives include (1) develop a model to measure the impacts of railroad costs and competition on rail wheat rates for North Dakota, Kansas, and Montana, (2) identify and measure the major cost determinants of rail wheat prices, and (3) measure intermodal competition by comparing rail wheat rates in captive markets (Montana and North Dakota) to one with more intermodal competition (Kansas). The results indicate that there is little difference in average Montana and Kansas rail wheat rates per ton-mile. However, North Dakota average railroad wheat prices per-ton mile are higher than average Kansas rates per ton-mile.

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Section: Introductionmentioning

confidence: 99%

State Variation in Railroad Wheat Rates

Babcock

McKamey

2014

J Transp Res Forum

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“…Recent data are inconclusive on whether North Dakota and Montana wheat rail rates are higher than other states. In the 1988-2007 period, Prater et al (2010) found that in the case of revenue per ton, Montana and North Dakota had the smallest increases of the 10 states evaluated. Iowa, Nebraska, Kansas, and South Dakota had the largest increases.…”

Section: Literature Reviewmentioning

confidence: 94%

“…Marvin Prater et al (2010) examined the sufficiency of rail rate competition in rural areas and the impact of intramodal competition on rail rates. They found that rail competition for grain and oilseed shipments generally decreased in the 1988-2007 period.…”

Section: Literature Reviewmentioning

confidence: 99%

“…According to Grimm and Winston (2000), the net annual benefits to shippers were more than $12 billion (in 1999 dollars) in the first decade following passage of the Staggers Act. Shippers have benefited from 20 years of declining rail rates (inflation adjusted revenue per ton-mile) as well as the preservation of rural area branch lines sold or leased to short line railroads (Prater 2010).…”

Section: Introductionmentioning

confidence: 99%

“…Compared with other major grains (and soybeans), railroads are a particularly valuable mode for transporting wheat, moving 51% of all wheat shipments in 2013 (Sparger and Marathon 2015). According to Prater (2010), nine of the top 10 wheat producing states are more than 150 miles from barge transportation on the Mississippi River, which provides the most significant intermodal competition to railroads for long distance shipments of grain to export ports. Wheat shippers in the Great Plains states do not have a cost effective transportation alternative to railroads since barge loading locations are not directly accessible, and trucks are not competitive for hauling shipments over long distances.…”

Section: Introductionmentioning

confidence: 99%

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Intrarailroad and Intermodal Competition Impacts on Railroad Wheat Rates

Babcock¹,

Atems²

2015

J Transp Res Forum

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The issue addressed in this paper is more fully understanding the relationship of intrarailroad competition and rail rates for wheat in the largest wheat producing states, which are Idaho, Kansas, Minnesota, Montana, North Dakota, Oklahoma, South Dakota, Texas, and Washington. The overall objective of the study is to investigate railroad pricing behavior for wheat shipments. The rate model was estimated with OLS in double-log specification utilizing the 2012 STB Confidential Waybill sample and other data.The research found that the distance from origin to destination and the total shipment weight had the expected negative relationships with railroad wheat rates and were statistically significant. The distance from origin to the nearest barge loading location had the expected positive relationship to railroad wheat rates and was also significant. The weight of each covered hopper car and the Herfindahl-Hirschman Index were both non-significant. However, the study used other data to determine that intrarailroad competition for wheat shipments within states appears to be present in most states.

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Slower Productivity and Higher Inequality: Are They Related?

Furman

Orszag²

2018

SSRN Journal

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Rail Competition Changes Since the Staggers Act

Cited by 5 publications

References 8 publications

State Variation in Railroad Wheat Rates

State Variation in Railroad Wheat Rates

Intrarailroad and Intermodal Competition Impacts on Railroad Wheat Rates

Slower Productivity and Higher Inequality: Are They Related?

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