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June 15, 2000 9:40 AM, EDT

Conventional wisdom over the past 20 years has been that competition in freight transportation benefits shippers more than economic regulation, but a new study shows the reverse is true — and it could have widespread effects.

The study is titled “Railroad Cost Conditions — Implications for Policy” by John Bitzan of the Upper Great Plains Transportation Institute at North Dakota University. It was funded by the Federal Railroad Administration.

The study takes issue with a number of familiar concepts.

For example, Bitzan’s cost analysis leads him to conclude that:

• “End-to-end” rail mergers are “not beneficial” to shippers.
• “Parallel” mergers lower shipper costs.
• “The advantages of competition over monopoly are not as clear cut as the simple textbook illustrations show.”
• It may be more beneficial to address rate and service problems in the rail industry “through policies that strengthen regulatory oversight.”

For the full story, see the June 12 print edition of Transport Topics. .

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