Lack Of Railway Competition Costs Comsumers


A detailed new report on rural transportation issues released today by the U.S. Department of Agriculture includes dramatic findings about the cost to American farmers and consumers from the lack of competition in the freight rail industry, and ʺconsiderable evidenceʺ that freight rail companies used excessive fuel surcharges to artificially boost profits.

Bob Szabo, Executive Director of Consumers United for Rail Equity (CURE), a coalition of freight rail customers seeking changes in federal law to allow for more competitive railroad pricing and reliable service, issued the following statement about the report:

ʺThis study shows once and for all that the current lack of protections against monopoly pricing by freight rail companies is hurting our economy, raising prices and affecting job creation. Bipartisan legislation is pending in Congress that will provide much‐needed relief for Americaʹs farmers and consumers, and we call on Congress and the President to enact it into law this year.ʺ

Key report findings include:                 

                        ʺThe rapid consolidation of the railroad industry through mergers has resulted in a decrease in the unrestricted interchange of traffic, routing choices, and the level of competition among railroads.ʺ


                        ʺRailroad service problems and high rates can directly impact rural consumers by pushing up electricity rates.ʺ


                        ʺAlmost 75 percent of agricultural areas lost rail competition from 1992 to 2007.ʺ


                        ʺThere is considerable evidence that railroad fuel surcharges recovered more than the additional cost of fuel, artificially boosting railroad profits. From 2001 to 2007, surcharges were 55 percent higher than the incremental increase in the cost of fuel.ʺ


The study can be found at


Source: CURE

Posted by Kaci Switzer

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