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[quote]QUOTE: Originally posted by tomtrain Maybe I'm just on a different page. I look at a supermarket. It's privately owned. The population of a good-sized city walks through its doors each week. Almost all of what it offers is available elsewhere through internet ordering. It's got to serve its customers to make itself successful. What is it about a railroad that is so much different? How long does a "customer" have to exist to be deemed "captive"? [/quote] The market for constructing and/or closing supermarkets is elastic. New stores are popping up all the time, and at the same time other stores are closing. It is the epitome of the free market. The market for constructing and/or closing railroads is inelastic. It is nearly impossible, both financially and jurisdictionally, to construct new railroads. It is up to the discretion of the STB if an owner can close a railroad. Because of this inelasticity, the few remaining owners of railroads can extract monopolistic pricing practices unavailable to other markets, including other transportation modes. That makes shippers who otherwise are logical rail shippers captive to that particular mode if they want to be competitive with other like businesses. When railroads raise rates by triple digits or cut back on service to logical rail shippers, it causes an unnatural shift in economic variables to less than perferable alternatives (from the standpoint of national interests). If the preferable alternatives are a shift to less economical transportation modes, shut down, and/or a move overseas, then clearly it ends up hurting the U.S. economy and contributing to the imbalance of trade. I've said it before and I'll say it again. There are better alternatives for curing the railroad ROI problem than to allow monopolistic retrenchment of the industry. Taking the sole responsibility of infrastructure costs away from the rail service providers and fostering that cost onto the public in some way (public/private consortiums, exemption of property tax liability, maintenance tax credits, access to infrastructure trust funding), and then allowing rail service providers the full risks and benefits of head to head competition nationwide would be a better way of addressing the ROI problem without sticking it to rail shippers.
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