ABSTRACT
Rail freight is generally viewed positively in terms of its contribution to society and the environment but is often seen as uneconomic by those requiring the use of freight transport services. While it is often possible to ascertain the cost side of rail freight transport, it is more challenging to identify the pricing policies due to a lack of transparency and commercial confidentiality concerns. This chapter examines the key factors influencing the economics of rail freight activity, starting with a general overview of the nature and structure of the rail freight cost base, followed by an assessment of the economics of different types of rail freight operation. It considers the important role of the public sector in influencing the economics of rail freight, discussing the attributes of competitive rail freight markets. The chapter describes the role of pricing in influencing companies' mode choice decision making. It presents a series of short case studies demonstrating rail freight's efficiency and cost competitiveness.
