Transportation of US western coal: The impact of deregulation on unit train rates☆

Abstract Unit train rates for coal shipments in the USA are set in a bargaining process between railroads and electric utilities. If either party is dissatisfied with the outcome then the Interstate Commerce Commission may be asked to intervene. However, recent legislation has limited ICC participation in the rate-setting process to cases where competition is proven to be very limited. This article uses a model to estimate unit train rates for coal shipments and the ICC is seen to have been relatively ineffective even in these circumstances. Without competition from other transport modes, in particular slurry pipelines, and with the imposition of increasingly stricter sulphur-emission regulations on utilities, further real increases in unit train rates for western coal shipments could be expected in the future.