Macdonald consolidating strike
At present, there are a new set of factors affecting the transportation of agricultural products by rail, making it useful to reexamine this industry in the context of the major provisions of the Staggers Act along with some of the changes that have resulted from partial deregulation.
The rail industry has been regulated since passage of the Interstate Commerce Act of 1887.
While intermodal transportation options are still present, their ability to compete with rail transportation is limited based on location and distance.
For example, truck competition is important for short haul distances, but is much more expensive on a per-mile basis, limiting its ability to compete on the longer routes that railroads tend to focus on.
However, if the calculated ratio is greater than 180%, then the regulatory agency takes a second step in assessing whether competitive factors are present or not.
Only if a railroad is found to be market dominant over the movement in question, can the reasonableness of their rate be considered.
However, over time, both new sources of competition—such as from truck and barge as well as new products like plastics—negatively impacted the industry. A large economic literature has documented some of the impacts of this 1980 Act (Wilson, 1994; Wilson, 1997; Mac Donald and Cavalluzzo, 1996; Winston, 1993). In addition, the years following the passage of this legislation saw massive consolidation of the nation’s largest railroads, the so-called Class 1 carriers (Mac Donald and Cavalluzzo, 1996; Bitzan and Wilson, 2007).This regulation was primarily aimed at the perceived problems associated with railroad behavior in markets in which there were few alternative railroads present, such as markets with one railroad acting as a monopolist.As such, the federal regulation was geared towards setting guidelines for how railroads could conduct business, including their rate policies, track operated, and merger activity.
Recently, however, the simplified SAC limits were removed and the three-benchmark limit was raised to $4 million.