Who’s Right About Soaring Railroad Rates?

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I read a story by Alex Roth in today’s WSJ that made me think two ways about the same problem, from two ends of the railroad track. A large Florida utility that buys long trainloads of coal is trying to get the state to re-regulate the railroad that brings their supply since the shipping costs have gone up so much. They think it’s unfair, because they’re what is known as ‘captive customers,’ which means only one railroad connects them to their coal supplier. So even though railroad freight volume has gone down steadily, all four major US railroad conglomerates’ profits have zoomed way, way up.

The utility says that the 1.7 million Florida household’s electric rates will go up by $100 million a year, and that it’s just unfair for the railroads to have doubled the rate to ship coal.

But the railroad says they have to use that money to pay for railroad track improvements and expansion, so many big things that they promise to do with their windfall profits. It must be tough being a captive customer, ’cause there’s nothing you can do. And they point out that a ton of coal or other freight goes 462 miles for each gallon of fuel. They say they’re part of the big climate change problem’s solution. They’re green. And green with fat profits.