Competition at Work: Railroads vs. Monopoly in the U.S. Shipping Industry

By their nature, water transportation industries are often subject to monopolization. Though not generally recognized, the monopolistic tendency often leads to the adoption of inefficient technologies in these industries. Within the US, for much of the nation's early history, the water transportation industry has had another force pushing toward monopoly: a lack of alternatives. With no other good alternatives, and a natural tendency toward monopoly in the water transportation industry, long-distance transportation in the US often exhibited a great deal of monopolistic behavior. Over the last 150 years or so, this behavior has been greatly reduced by the development of long-distance transportation alternatives to water - first trains and then trucks. The competition of railroads, especially, has led to lower long-distance transport prices and fewer inefficient transportation technologies in the US.