Rail Rates Drop 45% Since Staggers Act
December 14, 2000
With adjustments for inflation, rail rates fell 45.3% from 1984 to 1999, according to a study by the Surface Transportation Board’s Office of Economics, Environmental Analysis, and Administration (OEEAA).
Without adjustments, nationwide rail rates fell 19.7% since 1984. Rates in the East dropped 13.2%, while western rail rates fell 24.7%.
"By any measure, since the enactment of the Staggers Rail Act of 1980, the major regulatory reform legislation affecting railroads, average rail rates have declined consistently," the board noted. It also said this analysis is consistent with earlier assessments of rail rates issued by the Board’s staff and by the former Interstate Commerce Commission.
The study estimates that rail customers would have paid an additional $31.7 billion for rail service in 1999 if rail revenue per ton-mile had remained equal to its 1984 inflation-adjusted level.
While a portion of the decline in rail rates has resulted from costs that have been shifted away from railroads and onto shippers, OEEAA found that the significant efficiencies and productivity gains achieved by railroads since the Staggers Act have been the key factor leading to substantial rate reductions. And while not every shipper has benefited equally from the reduction in rates, OEEAA concluded that overall the rail-customer community, consumers, and the nation as a whole have benefited from reduced rates and a more efficient rail network.
Printed copies of the rail rate study are available free of charge by writing "Railroad Rate Study" Office of Economics, Environmental Analysis & Administration, Surface Transportation Board, 1925 K Street, N.W., Suite 500, Washington, DC 20423-0001 or by telephoning OEEAA at (202) 565-1526. The report also is available on the Board's website, www.stb.dot.gov,
under "Economic Data."