Through the Staggers Rail Act (1980) and the Railroad Revitalization and Regulatory Reform Act (1976), Congress deregulated railroad pricing to improve the financial health of the industry. Deregulation legalized differential pricing--the policy of charging customers different prices according to their willingness to pay. While the railroads have returned to profitability, shippers have been angered by railroad pricing strategies that are seen as abusive. Railroads have refused to quote rates to competing transportation facilities or have set prices to divert traffic onto the rail network. An economic measurement of the impact of differential pricing of rail services on barge transportation in the Ohio River Basin is provided by constructing a model to predict freight traffic volumes at barge terminals in the Ohio River Basin.
Abstract