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July TRAINS takes on the captive shipper debate - Best Issue Ever?
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<br />The absolute best item in the whole Whiteside paper: <br /> <br />"<b>Montana Suggestion For the Board To Consider</b>: <br /> <br />Montana has a suggestion for the Surface Transportation Board to consider. We <br />think it would be appropriate for the Board working with Montana Government <br />and its federally elected representatives to consider establishment of one or <br />several demonstration projects to explore the impacts of various approaches to <br />competitive access. Since the state of Montana is completely captive to one <br />railroad, it may be the perfect area in which to experiment with ways to return <br />competition to an industry where the numbers of industry players are extremely <br />limited. Other areas of the country might be identified according to unique <br />situations as well. In Montana, for example, <font color="red">a demonstration project of some <br />defined duration might allow an open access system to operate</font id="red">, allowing <br />Montana Rail Link (Class II) and Central Montana Railroad (Class III) and the <br />BNSF (Class I) to compete for Montana customers. The STB could monitor <br />service, etc. over a defined period, we’d suggest 2-4 years, and prepare a report <br />on each project that could be the subject of further public hearing and debate. <br />This sort of creative, yet gradual and controlled approach to restoring competitive <br />access and this would fulfil the competitive balance that the ICC/STB fostered to <br />create in the design of the Northern Line Merger in 1970 (creation of BN). It <br />would start to tell us a great deal about potential benefits and adverse impacts. It <br />would also allow the Board the opportunity to better assess the implications of <br />the rail industry’s configuration in the future." <br /> <br />Now we're talking! <br /> <br />PS - Ken, the CPI has nothing to do with the rate debate. Rates are not a consumer item. Adjustment of rates for the purpose of determining whether the real rate has increased or not for the shipper can only be analyzed based on relative costs of the rate supplier. That's what businesses do, determine prices charged to their consumers based on their costs. If your costs go down 50% but your rate remains the same, the real rate has increased. That is the only salient point to ponder, all else is just verbal diarrhea.
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