CSX Corp. executives may want to try their luck on a game show.

Judging from the company's third-quarter revenue of $2.1 billion, up 9.4 percent over last year's third quarter, they understand how to play "The Price is Right."

More than half of CSX's year-over-year growth in revenue for the third quarter was due to raising prices, while systemwide volume increased only a tenth of a percent. And company executives told analysts during their third-quarter earnings conference call that they can expect to see further aggressive pricing in 2006, thereby driving up costs for shippers and perhaps ultimately consumers."The environment continues to be favorable for increasing price," Chief Financial Officer Clarence Gooden said.

Probably no other market segment exemplifies this more than coal. CSX's third-quarter revenue from moving coal rose 16.9 percent year-over-year, to $512 million from $438 million, while volume increased 4.5 percent.

Gooden told analysts the demand for electricity is strong as natural gas is expected to remain expensive, resulting in power plants turning more to coal. At the same time, coal inventories among utility companies are below target levels, "supporting continued price increases."

All this was welcome news on Wall Street, where investors have been waiting for railroads to provide a better and faster return on investment. The company (NYSE: CSX) raised its dividend 30 percent in the third quarter to 13 cents per share.

Railroad analyst James Valentine of Morgan Stanley Equity Research wrote in late September that its bullish view of railroads was reinforced by recent meetings with industry leaders and large shippers.

"We have even greater conviction that the industry will consistently earn its cost of capital over the next few years (a feat not achieved in decades)," he and a colleague wrote, "led by secular upward pricing initiatives that should continue into 2006 and beyond."

Wall Street has consistently pressured railroads to be aggressive in prices.

"I sense that they want to see improved financial results from the railroad industry and from CSX, and pricing is a means to achieving that objective," CSX spokesman Gary Sease said. "They share our feeling that for far too long the rail transportation product was underpriced."

The increase in prices helped CSX improve its third-quarter earnings to $164 million, or 72 cents per share, 31 percent higher than a year ago.

But so-called captive shippers -- such as coal buyers and sellers, for whom rail is the only means of moving their goods -- are concerned that the market has swung too far in favor of railroads. They say railroads are eager to raise prices, but are often slow to respond to complaints about declining service.

"They definitely feel they are paying more for less," said Roger Nober, outgoing chairman of the Surface Transportation Board, the federal agency that oversees railroad rate and service issues.

Many shippers say industry deregulation has emphasized shoring up railroads' financial health, while paying much less attention to how well they're serving customers.

A number of associations for rail users shared their concerns with the STB at an Oct. 19 hearing on the Staggers Rail Act of 1980, the law that deregulated railroads. Among them was the National Rural Electric Cooperative Association, which represents more than 900 nonprofit, consumer-owned cooperatives, including the Clay Electric Cooperative, the Suwannee Valley Electric Co-op and 14 others in Florida.

Glenn English, the association's CEO, told the STB that railroads have become regional monopolies that have betrayed Congress' trust and subverted the Staggers Act.

As captive shippers, many cooperatives must accept unreasonably high rates and nonnegotiable terms of service on a "take-it-or-leave-it" basis, English said. Shippers want to work with the industry to help it improve service and increase capacity.

The National Industrial Transportation League, which includes shippers and carriers, also has suggested that the STB focus on more than the industry's finances.

"They [Congress] charged the STB with making the industry healthy," said John Ficker, president of the NITL. "However, there were also other policies to encourage competition and reasonable pricing. Maybe they should focus a little bit more on those other goals."

One thing that hurts service is the industry's capacity crunch, and one way to alleviate that is to lay more track.

CSX announced in August a plan to expand capacity on its lines between Chicago and Florida and between Albany, N.Y., and New York City. It entails spending $1.3 billion to $1.4 billion in the next two years, compared with its recent average capital improvement budget of about $1 billion.

Sease said raising prices is critical because with past price structures the industry has been unable to pay its cost of capital. "Any way we can increase prices and take care of that enormous reinvestment every year is the logical thing to do."

But some challenge the idea that railroads' long-time inability to earn their cost of capital supports assertions that they are only now obtaining adequate prices.

In written testimony submitted to the STB, the NITL argued there is a disconnect between what analysts call "revenue inadequacy" and what constitutes sufficient revenue in the "real world." It questioned how an industry reported to have not earned its cost of capital for six decades, as the railroads have said, had not gone out of business long ago.