Technical Reports

Effects of Disclosure Requirements on Railroad Grain Transportation Contracts (Appendices)

  • 01
  • Jun
  • 1992
AUTHOR: Transmode Consultants, Inc.
SUBJECT: Social & Economic Impacts
KEYWORDS: Grain Railroad Marketing, Efficiency Analysis, Rail Operations
ABSTRACT: The Staggers Act of 1980 legalized confidential rail/shipper transportation contracts. Their acceptance by railroads and shippers is best demonstrated by the exponential growth of these contracts through the 1980s. In 1986, Congress mandated considerable disclosure in transportation contracts for grain, in response to the demands of some segments of the grain industry. With increased disclosure, the number of contracts began to decline although the volume moving under contract remained about the same. This report analyzes the impacts on railroad grain shipments brought about by Congressionally mandated disclosure rules covering railroad grain transportation contracts. It explores how the disclosure rules affected the propensity of railroads and shippers to enter into these contracts. It examines whether increased disclosure was responsible for the decrease in the number of contracts entered into, and whether disclosure affected the efficiency of grain movements and rail operations. The report also discusses how the different railroads crafted contracting policies to conform to their competitive position in the grain transportation industry.