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Railroads Struggle to Deliver Coal to Utilities

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[quote]QUOTE: Originally posted by rrandb I take it you(FM) are a big proponent of the DME proposal to open an aditional route to the PRB coal? And with the monopolistic ability of RR's to control there customers even though there are 2, count them 2 RR's delivering PRB coal. How is two (duo) the same as 1 (mono)polistic. In your mind anything that is routinely shipped by rail is "captive" to the railroads. [/quote] 1. Yes, I am a proponent of the DM&E PRB expansion, and any other railroad that wants to expand out West. The more the merrier, which is the sentiment of a true railfan. 2. "Railroad monopoly" refers to the degree of control a railroad has over a customer. Remember, the coal mines are worthless without a customer to buy the coal. So even though both UP and BNSF serve some of the same mines in the PRB, they do not deliver that coal to the same customers, ergo a monopolistic situation. It would only be a true duopoly if UP and BNSF served both the same mines AND the same coal utilities. And a duopoly is nothing to write home about if you crave intramodal competition. 3. A rail shipper who has access to only one Class I rail services offering is a captive shipper. If that rail shipper has ongoing access to two or more Class I's, he/she is not captive. In the PRB, many of the mines are not captive, but their customers are. Contrast that with overseas importers to the US, who have access to multiples of Class I's and shipping lines. They are not captive in anyway shape or form, thus they get the benefits of competitive rates
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