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Saving the Railroad Industry TO Death - The Evil of Economic Freight Rate Regulation
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[quote user="greyhounds"] <p>And margins aren't profitablity. A railroad can make more money on freight priced at 110% of variable than it does on freight priced at 200% of variable. It depends on volume.</p><p>[/quote]</p><p>Wrong. Dead wrong. No railroad can make money at 110% R/VC if the VC + FC ratios are around 140% of R. Therefore, if a railroad is charging one customer 110% R/VC, they have to make it up on the 200% customer or they will go under. Volume means nothing if you aren't covering TC.</p>
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