Discuss the impact of fuel prices on rail carriers
Rail carriers have not experienced the same level of cost pressure as other modes. This is due to the fact that there is limited rail capacity, and as fuel prices increase, so to are rail's fuel efficiency. This led rail to find increased profitability and increased traffic during times of increased fuel prices. These profit level were attributed to factors such as rate increases, fuel surcharges, and added efficiency. The rail industry added traffic during high fuel cost periods because shippers are interested in the increased fuel efficiency of inter modal operations such as trailers on flatcar and container on flat car. Much of this traffic remained even after fuel prices reduced as carriers anticipate fuel price increase in the future.
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