Several speakers at Georgetown University McDonough School of Business' "The Economics and Regulation of the Freight Rail Industry" colloquium addressed various aspects of railroad and other transportation industries June 16.
Amanda Delp, a research assistant at the Georgetown Center for Business and Public Policy, began her talk entitled "Trucking and Rail: Co-opetition in Intermodal Freight Traffic" with an historic review of rail versus shipping and trucking.
"Each industry came with it own benefits," Delp said. Trucking's benefits were accommodating shorter-distance travel and its flexibility. "Wherever there was a road" trucking could gain a competitive edge, she said, while rail was better for distances of 725 miles or farther.
But that's changing, according to Delp.
"Rail transportation can be competitive for shorter distances, [too]." A huge impetus for this stems from intermodal travel, she said, as well as the use of rail plus trucking and secondary drayage. "There's no longer a clear, competitive relationship," she told the audience, a mix of academics, industry observers, and government workers and officials including a senator.
Olga Ukhaneva, an assistant research professor at the center, discussed a paper she co-authored called "Royalty Stacking in the U.S. freight railroads: Cournot vs. Coase." While somewhat esoteric, the concept was simple: She and her co-authors found no price difference for a railroad shipping from point A to C and passing through B, whether the railroad owned both AB and BC railroads or not.
Other speakers discussed at length the impact of far fewer coal shipments on the railroad sector, particularly along the Eastern Seaboard. Further, despite challenges the railroad industry remains a strong competitor for trucking, priced at approximately $25.9 billion, moderator John Mayo said in his opening remarks. Mayo is professor of economics, business and public policy in Georgetown's McDonough School of Business.
"Perhaps only telecommunications compares," he said.
