Below are the main results of recent rail research arranged by topic. To access a summary of an article, click on the bold article title. In cases where an original article is open access (available at no cost), the title in the source is hyperlinked. Wherever a title in a source is not hyperlinked, no open-access article is available.
Overview and Policy
Agricultural Transportation by Rail: Consolidation, Competition, and Fuel Prices
Source: Henrickson, K.E., and W.W. Wilson. 2015. “Agricultural Transportation by Rail: Consolidation, Competition, and Fuel Prices,” Choices 30(3).
- The U.S. rail industry structure changed dramatically after the Staggers Act of 1980—including major consolidation, line abandonment, and significant rate changes.
- These changes may have resulted in competition issues that increase rates, but the size of this issue may be small.
Modernizing U.S. Freight Rail Regulation
Source: Schmalensee, R.L., and W.W. Wilson. 2016. “Modernizing U.S. Freight Rail Regulation,” Review of Industrial Organization 49:133-159.
In their summary of a landmark study by the Transportation Research Board (TRB), Schmalensee and Wilson highlight several recommendations made by TRB to Congress:
- Direct the Surface Transportation Board (STB) to develop, test, and refine competitive rate benchmarking methods.
- Remove the rate reasonableness process currently in place and institute final offer arbitration in contested rate cases.
- Allow reciprocal switching as a remedy for unreasonable rates.
- Transfer review of mergers and acquisitions to traditional antitrust regulators.
- Perform a strategic review of STB data collection, allowing for improved pricing schemes and period reviews/analysis of the industry.
Shuttle Train Service
Analytical Models of Rail Transportation Service in the Grain Supply Chain: Deconstructing the Operational and Economic Advantages of Shuttle Train Service
Source: Hyland M.F., H.S. Mahmassani, and L.B. Mjahed. 2016. “Analytical Models of Rail Transportation Service in the Grain Supply Chain: Deconstructing the Operational and Economic Advantages of Shuttle Train Service,” Transportation Research Part E 93:294-315.
- The combination of large terminal elevator facilities and shuttle service were found to reduce costs, increase speed, and increase rail capacity compared to traditional grain supply systems.
- By three measures of efficiency (time, cost, and capacity), the shuttle train service enhances U.S. competitiveness on the global market.
Grain Freight Elevator Consolidation, Transportation Demand, and the Growth of Shuttle Facilities
Source: Ndembe, E., and J. Bitzan. 2018. “Grain freight elevator consolidation, transportation demand, and the growth of shuttle facilities,” Research in Transportation Economics, Journal of the Transportation Research Forum 71:54-60.
- Shuttle elevators used more rail transportation than non-shuttle elevators and depended more on rail transportation than non-shuttle elevators.
- Shippers using shuttle service saved an average of 24 percent per year in total transportation costs during the study period (2006-13).
Hard Red Spring Wheat Marketing: Effects of Increased Shuttle Train Movements on Railroad Pricing in the Northern Plains
Source: Ndembe, E. 2015. “Hard Red Spring Wheat Marketing: Effects of Increased Shuttle Train Movements on Railroad Pricing in the Northern Plains,” Journal of the Transportation Research Forum 54(2):101-115.
- Shuttle trains were found to have significant influence for reducing rail freight rates.
- Intermodal competition (i.e., a truck-to-barge combination) exerted downward pressure on rail rates.
Additional Topics: Competition, Basis, and Data
Intrarailroad and Intermodal Competition Impacts on Railroad Wheat Rates
Source: Babcock, M.W., and B. Atems. 2015. “Intrarailroad and Intermodal Competition Impacts on Railroad Wheat Rates,” Journal of the Transportation Research Forum 54(3):61-84.
- Railroad wheat rates were inversely related to the distance from origin to destination and the total shipment weight.
- As the distance from origin to the nearest barge-loading location increased, railroad wheat rates increased.
- The degree of intrarailroad competition varied by State and was present across most crop-reporting districts, though the relationship was not statistically significant in the model.
Secondary Rail Car Markets for Grain Transportation and Basis Values
Source: Wilson, W., and P. Lakkakula. 2021. “Secondary Rail Car Markets for Grain Transportation and Basis Values,” Agribusiness: An International Journal 37(3):472-488.
- Soybean exports' basis in the Pacific Northwest (PNW) and secondary-market daily rail car values (DCVs) were determined simultaneously. If the PNW basis increased, secondary-market rail car values increased (and vice versa).
- Other exogenous variables were significant, including rail velocity, the pace of farmer marketing, futures spreads, and ships due at the Gulf port in 10 days.
A Method for Processing the Confidential Carload Waybill Sample for Railroad Freight Analysis
Source: Fialkoff, M.R., K.L. Hancock, and S.K. Peterson. 2018. “A Method for Processing the Confidential Waybill Sample for Railroad Freight Analysis,” Research in Transportation Economics, Journal of the Transportation Research Forum 71:34-43.
- The Oak Ridge National Lab (ORNL) outlined a process to obtain spatial insights from the Surface Transportation Board’s (STB) confidential Carload Waybill Sample (CWS) data.
- The researchers find several challenges in the availability and usability of CWS data, such as its small sample size and delayed release.
Canadian Grain Handling and Rail Transportation System
Grain Handling and Transportation Policy in Canada: Implications for the United States
Source: Nolan, J.F. and S. Peterson. 2015. “Grain handling and transportation policy in Canada: Implications for the United States,” Choices 30(3).
- Provision of extended interswitching increased the degree of competition in Canadian railways.
- New regulatory oversight in Canada might be required to curb the grain companies’ market power.
Bringing in the Sheaves: Changes in Canada’s Grain Supply Chain Through the Post Canadian Wheat Board Era
Source: Brewin, D.G., J.F. Nolan, R.S. Gray, and T.G. Schmitz. 2017. “Bringing in the Sheaves: Changes in Canada’s Grain Supply Chain Through thePost Canadian Wheat Board Era,” Journal of the Transportation Research Forum 56(3):75-90.
- The study finds that the Canadian Wheat Board (CWB) possessed significant market power that counteracted the market power of grain companies and railroads.
- Deregulation of the grain handling system appears to have initially benefited grain companies more than the farmers.
Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada
Source: Ferguson, S.M., and M.R. Olfert. 2015. “Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada,” American Journal of Agricultural Economics 98(2):422-446.
- Higher freight rates, which translated into lower farm gate prices, induced farmers to adopt newer and more efficient production technologies, such as zero tillage.
- Over the long term, farms experiencing greater transportation-cost increases used more fertilizer and implemented more land changes.
- Over the long term, increased transportation costs induced less wheat production and more canola production.
Simulating Contestability in Freight Transportation: The Canadian Grain Handling and Transportation System
Source: Lawrence, R., J. Nolan, and R. Schoney. 2016. “Simulating Contestability in Freight Transportation: The Canadian Grain Handling and Transportation System,” Journal of Transport Economics and Policy 50(4):325-349.
According to a simulation model of the grain supply chain in Western Canada, the researchers find:
- A majority of grain shipment delays would occur at smaller and less centrally located grain elevators.
- Railways would need to increase freight rates by 20 percent to improve service at these smaller, less centrally located elevators.
- Consolidation in the grain elevator system would improve efficiency and throughput.
USDA-AMS Cooperative Agreement Summaries
For related information, click on the links below to summaries of recent research funded by USDA’s Agricultural Marketing Service. These cover topics such as rail costs, rates, market structure, and policy (e.g., railroads’ common carrier obligation and revenue adequacy).