The economic impacts of rail mergers and abandonments on Kansas export wheat rail rates and costs

The purpose of this study is to estimate the effects of railroad mergers, bankruptcies, and abandonments on the ability of railroads to raise rates on wheat shipments from Western Kansas to Gulf ports. The study examines shipments of wheat from thirty-nine counties in western Kansas to three Gulf port areas, and estimates the impacts of actual, proposed, or likely changes in the transportation network.; A network flow model is used to analyze the impacts of three changes in the wheat logistics system: (1) the merger of the Union Pacific and the Missouri Pacific railroads, (2) the proposed and rejected merger of the Santa and Southern Pacific railroads, (3) an abandonment of the region by the Kyle Railroad.; The results of the study show a great diversity in the expected impacts of these changes in the transportation structure. The Union Pacific - Missouri Pacific merger generated significant decreases in both railroad operating costs and rates. A merger of the Southern Pacific and Santa Fe railroads reduced operating costs but led to significant rate increases. An abandonment of the Kyle's routes in the study area did not effect railroad operating costs but did lead to significant rate increases by the Union Pacific.