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Thoughts on rail......
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88gta350, <br /> <br />Here's my best attempt at a primer. "Closed access" is the term I use to described a transportation system in which the owner of the right of way is (usually) the sole provider of transporting services. Most if not all of the railroads in North America are closed access. In other modes, it used to be that the sole owner and user of transmission lines was the energy company/electric utility. Ditto for pipelines. Now, much of the transmission and pipeline infrastructure is owned by third party entities, with access to the infrastructure allowed for online electricity or natural gas/petroleum producers. <br /> <br />"Open access" is the term used for any transportation infrastructure in which the owner of the infrastructure does not engage in any of the actual transporting services. Highways are open access, in that any truck line can provide transporter services to any online shipper, e.g. it is not limited to one trucking company. Ditto for waterways. There was a time long ago when some roads and canals were operated by the sole provider of transporter services, but (and this is my opinion) these modes evolved into open access by natural order, e.g. it just made more sense for these modal forms to be operated as open access, whether by a private toll company or some level of government. Unfortunately, the U.S. rail system did not evolve in a likewise manner, and therein lies the problem. <br /> <br />The problem that is growing today for closed access rail systems is that many of the shippers on the line are "captive" to that sole company for the most logical form of transporter services. Captive rail shippers can pay more than double the rates of rail shippers who have access to more than one railroad (or have alternative access to barging or pipelines, depending on the commodity in question). This is called "differential pricing", a less ignominious term used by the railroad industry to paint over what it really is, which is monopolistic pricing. It is unfortunate that the federal regulators have turned a blind eye to this practice, but the belief in the rail industry is that "differential" pricing is essential for railroads to keep their financial heads above water. The consequence of this practice is manyfold: Some plant owners will relocate a manufactering plant overseas, some will shut down the plant and re-invest elsewhere in industries not constrained by transportation issues, some will turn to less efficient forms of transportation such as truck and/or some will turn to less speedy forms of transportation such as barges. <br /> <br />Speaking in global terms, it is producers and manufacturers in the U.S. that are bearing the brunt of monopolistic rail service pricing, and thus it is making it harder for the U.S. to compete with foreign competitors for the world markets, since most other rail systems outside North America are either open access or are heavily regulated/subsidized by their respective governments. It cost more on average for a captive U.S. producer to deliver his product from point of origin to the nearest U.S. ocean port, than it does for his competitor overseas to do the same to his nearest ocean port. Additionally, it is cheaper to deliver foreign goods into the U.S. to the consumer markets via rail than it is for domestic producers to access the U.S. consumer market, because virtually all import ports have access to two or more railroads which all connect to the major consumer terminals, whereas many domestic producers are captive to one railroad, so they pay much higher rates to get their similar goods to the same U.S. consumer terminals. When you consider that with the devalued dollar we should be able to whittle down the trade deficit, yet we are still runnning record deficits, it is clear that the closed access rail system in the U.S. is a major culprit of the U.S. trade deficit. <br /> <br />There is a way for the government to ameliorate this problem, without resorting to either re-regulation of rates (pre-Staggers Act) or some form of nationalization. They can use the AT&T breakup as a legal template to do a similar thing for the railroad system, e.g. breaking up the rail oligarchy into rail infrastructure companies and rail transporter services providers. I've already gone over a list of the possible benefits of such a move. The others on the forum can provide a list of reasons why such a move would be bad for the U.S. economy, if they can come up with any.... <br /> <br />Note to Overmod: Yes, some rail ROW's are being purchased by local and state governments, but they are still not open access in the sense that most of these governments simply turn around and assign a single rail operator the sole rights to provide rail transporter services. Even if the government entity itself runs the trains, in most cases there is only one connecting Class I, so the shippers on the line are still subject to captive rates.
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