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MP173: <br /> <br />In my opinion, unpublished, secret rate contracts give enormous leverage to shippers by inviting blind price bidding from competitive railroads. (And remember, just because a shipper is supposedly "captive" doesn't mean that there isn't competition from another railroad with its own "captive" shipper of competing products. Misinformation in the form of supposedly "secret" rates can and has led to strong "cross-country" rate wars.)The result is an almost endless ratcheting down of bids/rates to near the level of variable costs. Long-term contracts at variable cost rate levels will not support reinvestment. Public rates allow market-based pricing to prevail, giving the railroads opportunity to reasonably participate in the economic "rent" generated by their service and thereby, hopefully, live to serve another day. <br /> <br />(I was a pricing officer for a regional railroad from 1970 to 1980, and sat on a rate bureau committee for 6 of those years.)
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