In the last ten years, the railways generally throughout the world have suffered a decline in their share of the transportation market relatively to other modes of transportation. This has meant a serious loss of business which has led to many financial difficulties. This loss of a share of the market has come about despite the lasting importance of the railways generally in the economy, despite their necessity in economic development and despite their continued progress in technology. Should the railway situation continue to deteriorate, transportation systems could be endangered seriously. In this thesis, a reform of railway pricing policies is proposed as an important contribution to the solution of the present railway problem. [...]

The Crowsnest Pass rates are fixed rail freight rates that apply on the carriage of most Canadian grain. They were originally established in 1897, and have been embodied in Federal statute since 1925. In recent years, the rates have covered less than 40 percent of rail-grain costs. With continuing cost inflation, this proportion will decrease to even lower levels over time. Several policy alternatives are available to the Federal Government with respect to the transportation of grain by rail. These alternatives are characterized primarily by different freight rate levels. The lowest rate level considered herein is the current one; the highest is a level at which the railways would recover the long-run variable costs of the rail-grain system plus a contribution to their constant costs. For each price-level alternative, there are a range of subsidy alternatives. Depending on the particular price level, subsidies could be given to the railways, the grain producers, neither of these, or both of them. In order to evaluate the policy alternatives, there must be criteria for evaluation. The criteria used in this thesis are the major objectives that relate to the issue. Two of the objectives are to improve economic efficiency and to facilitate the development of secondary industry in the Prairie provinces. Both of these objectives favour the pricing alternative of raising grain freight rates to a compensatory level. Without producer subsidies, however, this alternative violates a third objective--that of minimizing grain-producer transportation costs. In addition to these three objectives, there are four objectives that refer particularly to the Federal Government. They are maximizing votes, implementing the "user pay" philosophy, minimizing total subsidy payments, and assisting railway variable-cost recovery in grain transport. A major consideration that is not an objective is the resistance of producers to direct, rather than indirect, subsidies. The quantitative impacts of raising rail-grain rates on the railways and on grain producers are substantial. Implementing rail freight rates equal to the long-run variable costs of transporting grain would have increased the combined net revenue of the Canadian National Railways and CP Rail by at least two-thirds in 1976. It would have decreased the net income of Prairie grain farms by (at most) 15 percent in the same year. Two policy alternatives are chosen as the better alternatives. The first policy selected is that of initial Crowsnest Pass rates, increasing over time to a larger and larger proportion of rail-grain costs. This pricing scheme would be accompanied by constant railway subsidies to reflect the difference between costs and revenues. The second policy is an immediate increase to rates covering variable costs, with subsequent annual increases to adjust for inflation. With this pricing policy, there would be constant producer subsidies equal to the initial rate increase. / Business, Sauder School of / Graduate

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In the early 1920s, discontent about freight rates led to a number of major political battles. Statistical analysis and a review of contemporary reports suggest that the economic importance of these issues was greatly exaggerated. They were blamed for problems which were mainly attributable to such factors as the world-wide recession, the movement of the terms of trade against agricultural producers or the trend towards industrial concentration. / Examination of official documents and private papers indicates that government policy-making on freight rates was influenced by political priorities (especially winning back the West), lobbying by affected interests and the opinions of strong-minded individuals. The King Government intervened in the question of railway rates, but its procrastination, obfuscation and reversals of policy reduced the political credit it received for the concessions it decided to make. Its abortive initiatives on lake and ocean rates were empty political gestures, made out of ignorance of the economics of these complex issues.

Thesis (M.S.)--Massachusetts Institute of Technology, Dept. of Civil Engineering, 1979. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND ENGINEERING. / Includes bibliographical references. / by Jerome Fessard. / M.S.

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Although the original intent of this study was to do a pre-and post-deregulation assessment of rail rates per ton-mile, the results using post-deregulation data show a significant decrease in rail rates between 1981 and 2000. While accounting for changes in shipment characteristics, savings for wheat, barley, com, oat, and soybean shippers were 63.80%, 69.17%, 49.07%, 67.97%, and 59.36%, respectively. Rate savings over time for an average 1981 shipment were 45%, 55%, 38%, 45%, and 36% for wheat, barley, com, oat, and soybean shippers, respectively. Analysis regarding the effects of deregulation of rail rates on com, soybean, and wheat on a regional basis shows that rail rates not only differ across commodities, but also among regions. In general, it was found that grain producers within regions that had higher levels of intermodal competition had lower rates than their counterparts with lower levels of intermodal competition. Distribution of benefits as a result of market-based pricing has varied among regions, and these variances are increasing over time.