Hey, collective American society — did you ever wonder why that $3 billion in change sitting on your dresser went missing? The answer is rail companies made off with it. A May Consumer Federation of America study found that freight rail monopolies cost Americans that much because they were able to charge unfair prices due to the convenient lack of competition. The Journal of Commerce reports:
“With only a handful of companies providing freight rail service, many rail customers have access to just one railroad and are, therefore, ëcaptive’ to that railroad,” the study said. “This enables the railroads to set prices well above costs, essentially extracting monopoly rents from shippers, and creates little incentive for railroads to provide consistent and reliable service.”
This explains why the Monopoly choo-choo train game piece always seemed so smug.
Study: Bulk Commodities and the Rails: Still Crazy After All These Years (PDF)
Study: Rails Overcharge Consumers by $3 Billion [The Journal of Commerce] (Photo:gosheshe)