The Staggers Rail Act of 1980 removed many regulatory restraints on the railroad industry. The Staggers Act allowed the Interstate Commerce Commission (now succeeded by the Surface Transportation Board) to regulate rates only when competition is not sufficient to keep rates below a statutory threshold expressed as a multiple of the railroad’s variable cost (FRA, 2004). Since the Staggers Act took effect, a long-term decline in railroad market share has been reversed and freight rates (adjusted for inflation) have declined by 1 to 2 percent annually (FRA, 2006).

However, developments since 1980 have significantly reduced competition in the industry. More than 40 Class I railroads (a railroad with at least $250 million in operating revenues in 1991 dollars) served North America in 1980, and only 7 remain today. Of these, two railroads in the West (Union Pacific and BNSF) and two in the East (CSX and Norfolk Southern) control more than 95 percent of the rail business. Consequently, each of the coal supply regions—the Powder River Basin, Illinois Basin, and Appalachian regions—is served by only two railroad companies for coal transport to power plants (NARUC, 2006).

The combination of reduced rail competition, perceived problems in the delivery of coal by rail, and price increases associated with the 2005 rail disruptions has caused some concern on the part of coal-fired power plant owners about both the reliability and the price of coal delivery. Severe and frequent delivery problems or spikes in prices have the potential to reduce future coal use by affecting the climate for coal-fired power plant investments.


More than 12 percent of the total coal transported in 2004 in the United States—about 129 million tons—was moved by truck (EIA, 2006g). Typical truck haul lengths (one way) are less than 100 miles, averaging about 32 miles. Significant tonnages of coal are trucked in some states, most notably West Virginia (18 million tons shipped annually) and Kentucky (17 million tons trucked annually). Truck shipments are also an important component of multimodal coal transport in Kentucky. The issues associated with truck transport are primarily associated with road maintenance, the generation of noise and dust, and traffic safety.


Transportation on the inland waterways and Great Lakes is an important element of the domestic coal distribution system, carrying approximately 20 percent of U.S. coal tonnage and making 10 percent of deliveries to end-use consumers. The amount of waterborne transported coal, approximately 306 million tons in 2004 (including imports and exports), has remained relatively constant over the

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