Railroad Effectiveness Questioned by STB Report

A study released today that was commissioned by the Surface Transportation Board indicates a substantial shift of intermodal freight from trucks to rail may just be wishful thinking.

The independent study by Christensen Associates, an economic and engineering consulting firm, found that congestion at railroad facilities, ports, cities, terminals and other chokepoints is constraining rail traffic growth. Any attempts to increase freight levels will increase the service problems that already haunt the industry.

Intermodal shipments, for which railroads say they are competing against trucking companies, represent only 6.4 percent of railroads' tonnage, but 14.4 percent of railroad revenue, and the speed of intermodal shipments has been declining for all but one railroad.

In addition, the report shows that many railroad shippers are unhappy with the largest, or Class I, railroads because of their "possible abuse of market power." Shipping rates have been rising since 2001 and service quality has decreased.

The report said shippers also complain that railroads are increasingly adopting a "take it or leave it" attitude, and are forcing new routes on shippers under the guise of operating efficiency, but transit times are no better, or even worse.

Shippers blamed many railroad problems in large part on the near-monopolies that railroad companies enjoy.

The number of Class I railroad companies has declined from 40 to just seven.