Study: Railroad rates increasing since 2004

WASHINGTON — An independent team of consultants charged with looking at competitiveness in the U.S. rail industry has found that railroad rates have been steadily increasing since 2004, with a particularly steep increase in 2008.

But Christensen Associates Inc. found that the rate increases were driven by fluctuating fuel prices and other costs and did not appear to reflect a greater exercise of railroad market power over captive shippers.

The updated study, which now includes data from 1987 through 2008, found that a greater share of traffic in 2007 and 2008 moved at rates less than 180 percent of variable costs than in 2005 and 2006. Variable costs include fuel, labor and other non-capital costs associated with moving freight.

Christensen also observed that, since late 2008, railroad traffic has dropped nearly 20 percent from the levels of
2006 and 2007. And Christensen said preliminary data show that rail transportation rates fell last year.