Tuesday, October 27, 2009

Father of Transporation Economics


Mr. Meyer’s insights help us understand why rail’s share of American freight traffic increased substantially after deregulation in 1980. In 1958, when Mr. Meyer was writing, Congress reduced their obligations to maintain unprofitable passenger lines. In 1980, the Staggers Rail Act radically reduced the rate-setting authority of the Interstate Commerce Commission. Today, rail carries 38 percent of freight in the United States, but only 8 percent of freight in Europe. While the bulk of the difference in rail freight between the United States and Europe can be explained by innate differences like longer distances and less coastline in America, one estimate is that rail’s share of European freight would approximately double if Europeans adopted different policies.

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