Railroads, the Free Enterprise Alternative

By Daniel L. Overbey | Go to book overview
Save to active project

restrictions of the traditional rail industry structure could be given an unencumbered trial in the marketplace. With the freedom of the new structure, rail carrier innovation should proceed at a rapid pace.


The Free Enterprise Alternative offers a means for eliminating exclusive carrier service and replacing it with constructive competition. Carrier companies would respond to the needs and demands of the marketplace. Carriers would be given a great degree of freedom in the commercial direction of their operations: services, route structure, market entry and exit. Although this freedom is taken for granted in the other modes, the railroads have never had such latitude because of their exclusive fixed ways and the resultant monopolistic characteristics. By separating carrier and roadway functions, the benefits of both joint use and carrier competition can be obtained.

In recent years the ICC has given common carrier railroads the approval to implement contract rates for specific situations. Contract rates usually require a minimum annual traffic volume and may place daily, weekly, or monthly maximum volumes in order to improve car utilization. Loading and unloading times may be limited.

The ICC recently exempted fresh fruits and vegetables from economic regulation when shipped by rail. The railroad remains a common carrier with certain obligations, but rates are not subject to regulatory approval.

When handling contract shipments or exempt commodities, the railroad company still has the basic common carrier obligations unless modified by specific contracts. The contract and exempt innovations usually relate to price (rate-making) and not service. Exempt and contract shipments can be handled in trains with other regulated common carrier traffic; they share the same yards and tracks. It is the same carrier--the railroad company--which performs the transportation service for all rail shipments.

U.S., Department of Transportation, The Railroad Situation, pp. 46-48.
At some locations, two or more railroads "open" industries to reciprocal switching. The railroad serving an industry will switch cars to and from a nearby connecting railroad(s) for a flat fee rather than a share of revenue as is the case with normal interchange. The connecting railroad(s) at the location reciprocate by switching cars to their industries. If an industry is not open to reciprocal switching, the originating carrier might be able to demand inclusion in the routing to some intermediate interchange point depending on tariff restrictions. In either case, the originating carrier must physically handle the shipment to the connecting railroad.


Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this page

Cited page

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Railroads, the Free Enterprise Alternative


Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 232

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?