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Two Roads Diverged: Two Alternate Strategies for Protecting Captive Freight Shippers in the “Americas” Model of Freight Rail Restructuring

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  • Pittman, Russell

Abstract

How to protect “captive shippers” from monopolistic abuses by a railway? In an “open access” system, it’s straightforward: provide infrastructure access to a competing train operating company. In a system without open access – as in, for example, the United States, Canada, Mexico, and Brazil – it’s not so straightforward. For freight shippers lacking economic intramodal or intramodal shipping alternatives, regulators and policymakers have focused on regulatory alternatives in two broad categories: 1) direct regulation of rates, and 2) imposed, regulated competition from a second railway (for example, interswitching or trackage rights). We argue that, despite disadvantages familiar to every Economics 101 student, direct regulation of rates has proven to be the superior alternative, and we discuss alternative mechanisms currently under debate.

Suggested Citation

  • Pittman, Russell, 2024. "Two Roads Diverged: Two Alternate Strategies for Protecting Captive Freight Shippers in the “Americas” Model of Freight Rail Restructuring," MPRA Paper 122284, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:122284
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    File URL: https://mpra.ub.uni-muenchen.de/122284/1/MPRA_paper_122284.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    freight railways; regulation; captive shippers; Canada; Mexico;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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