Technical Reports

Productivity and Prices in the U.S. Rail Industry: Experience from 1965 to 1995 and Prospects for the Future

  • 01
  • Jan
  • 1995
AUTHOR: Carl D. Martland
SUBJECT: Evaluation
KEYWORDS: Rail Freight Service Productivity, Rail Prices, Productivity Improvements, Deregulation
ABSTRACT: This paper documents the major changes in rail freight service productivity and the overall changes in rail prices over the period 1965 to 1995. Over this period, productivity improvements produced annual savings approaching $25 billion by 1995, with most of the savings achieved after 1983. Despite these dramatic improvements, the profitability of the industry never returned to the peak level of 1966, as the great majority of the savings were passed on to customers in the form of lower rates. A major concern is that the recent rate of productivity improvement will be very difficult to sustain into the 21st century, while the pricing pressures unleashed by deregulation will only grow stronger. The industry may therefore face significant financial problems in the not too distant future.
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