Railroad Concentration, Market Shares, and Rates
Following the passage of the Staggers Act in 1980, the market share of Class I railroads has increased as a result of mergers, reducing the number of Class I railroads from 33 to 7. As a result, rail competition has been reduced, market power has increased, and rail costs have fallen by over half in real terms. Until 2004, most of these cost savings were passed along to shippers in terms of lower rates. However, since 2004, average rail rates per ton-mile for all commodities have climbed 36 percent while rail costs have only increased 29 percent. This paper analyzes the changes in railroad market concentration, market shares, and rail rates for grain and oilseeds that have occurred since the Passage of the Staggers Act.
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