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[quote]QUOTE: Originally posted by jeaton CURE defined any rate at or exceeding 180% of variable cost as being a captive rate and compared the average of those rates to rates below 180% which they defined as competitive rates. [/quote] Granted, 180% is an arbitrary dividing line, but you have to start somewhere for analysis, so 180% it is. Frankly, I would think CURE would use any rates just above the revenue adaquacy standard. Average revenue above 160% of variable cost could also be defined as captive rates. I personally think CURE is being generous to the railroad industry with the 180% standard as the definition of captive rate. [quote]QUOTE: As you have studied this closely, you will know that a rate applicable to a captive shipper that exceeds 180% of variable cost is not lawful. [/quote] That's not exactly true. Any rate to a captive shipper that exceeds 180% can be challenged by the shipper, but it is not illegal in the sense that the railroad will be charged with a crime. Although I think you're on to something, because it would be alot easier for captive shippers to get rate remittence if such was a crime than it is to go to the expense and trouble of filing a rate challenge. As things are currently, the costs of filing a challenge can exceed the rate being charged, with little likelyhood that the STB will do what it is supposed to do under the perpetually ignored Staggers caveats regarding competition. [quote]QUOTE: However, a rate at or over 180% of variable cost for a shipper with competitive options, i.e., service provided by two or more carriers is not unlawful. Further, CURE assumes that no captive shipper has any rate that falls below the 180% mark. Obviously, the exclusion of any such rates in the calculation skew the average "captive" rate higher. [/quote] As I mentioned above, if there is any skewing, it is to the benefit of the railroad. CURE is actually being very conservative in it's definition of captive rates. And if you can find a captive rate that is below the 160% mark, let alone the 180% mark, I would really like to see it. [quote]QUOTE: Also, as you know, rates tend be a function of distance. If by chance the universe of rates exceeding the 180% threshold happen to be for longer than average hauls, there is a further bias in the comparitive results presented. [/quote] In the Northern Tier grain transportation business, the old adage of rates being a function of distance doesn't hold. If you remember from the "Montana Farmers Fight Back" thread, Montana grains shippers are paying more than both the longer hauls out of Eastern North Dakota and the shorter hauls out of Eastern Washington. [quote]QUOTE: Frankly, I would prefer to see a less costly method for an administrative procedure for adjudicating the issue of captive rates. It would pull the whole issue out of "he said,he said" babble and resolve individual cases on the facts. Talk is cheap, the walk is going to cost some time and effort. [/quote] There are two ways to do this: Rate reregulation, or head to head rail competition for every rail shipper. Choose your poison. [quote]QUOTE: And by the way, the next time you call people who disagree with your view as a bunch of anti-American, cool-aid drinking, dumpster diving stupids, I might ask if the owners of this forum if they consider that kind of rant conducive to thoughtful exchange of ideas and opinions. [/quote] Whereas being called an ***, liar, ect. is okay? I never start the flame wars, but I do tend to respond in kind. If the owners of this forum want to take action, let them start with those who originate such tactics. I am perfectly fine with that. I would prefer that those who disagree with my opinions to respond with their own salient arguements, but of course they never do, as anyone who peruses these forums can attest.
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