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Well, in terms of maintaining rates that cover costs, if you take the STB's 180% RVC standard as the key indicator of "sufficient" revenues from rates, then it would seem that intermodal is not covering the RVC standard. Meanwhile, those Montana grain rates are running well over 200% RVC, so if they get knocked down closer to the 180% standard, the railroad is still covering the costs. The disparity between import intermodal rates and domestic bulk rates is just ridiculous, and anything the forces rates to be sustainable for covering costs yet nondiscriminatory may be a good thing for US production. I personally think the best thing for the trade deficit right now would be for US export commodities to have reduced rates to port, and for import intermodal stuff to have to pay higher rates (which will reduce domestic consumption of imports). Regarding how one would judge the proper incentive to expand capacity, one thing that is clear is that the current closed access monopolistic system does not provide incentive to expand capacity (otherwise such would be happening right now). Let's face facts: The railroads have spent the last few decades complaining about "over capacity", all that in spite of a continually growing economy. (Hasn't the GDP more than doubled since the 1950's?) The truth is, there was no "over capacity", just a refusal to take what the freight transportation market was offering, with railroads seemingly content to defer business to trucks and barge lines. Frankly, I don't see how capacity investment can get any worse than it is right now. Why then assume that a non-operating track owner would do worse than what is happening now? If anything, the non-operating track owner has more incentive to expand capacity, because each unit of capacity expansion provides an extra unit of marginal revenue, e.g. the track use fees are predicated on covering all associated costs of track ownership. In other words, there is no disincentive to capacity expansion, because to do so reduces the overall revenue stream. You have to follow the demand curve to understand this. Finally, what is so hard to grasp with the truism of "Monopolism is counterintuitive to capacity expansion"? That's Econ 101. Unfortunately for jeaton, he must have been educated in Bulgaria during the Cold War.
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