• Are the railroads current infrustructure maxxed out?

  • General discussion about railroad operations, related facilities, maps, and other resources.
General discussion about railroad operations, related facilities, maps, and other resources.

Moderator: Robert Paniagua

  by dave76
 
I was woundering if the current plant of the railroads are maxxed out? I say this because I drive past the Lehigh line and Oak Island, and the yard always looks full as of late, and trains always seem to be waiting on the line, right before the yard and when I go over the line on the parkway bridge. I also heard about the UPS deal, I read about Union Pacifics trains being stranded on mainline tracks for days, due to yard capacity and lack of locomotives. I was just woundeing because I was woundering if there is room for more service, say it should come on line, or would they have to start rebuilding and expnading the plant once again?

  by Sir Ray
 
This has been debated many places, including Railway Age, and this message board of course, and basically the answer is...
Well, yes of course - the idiots removed way too much capacity during the 1950s-1980s. Here and there they have been replacing capacity (double tracking; passing sidings; reconfiguration junctions and so on), especially on mainlines west of the Mississippi. To be fair, as others have pointed out, the railroads couldn't have carried all their non-used trackage for the 3 decades until they became useful again (of course, there was no need for, say, ConRail to be ultra spiteful and tear up routes simply so that no competitor could ever use it again).
However, the railroad are not about to replace capacity if they feel they cannot earn the investment back, especially if the benefits are long term only, or more likely boom n' bust cyclical. Also consider that some railroad executives, like many American executives in general, are blithering idiots in need of a good @$$-kicking out the door, and that answers some of you question.

  by pdman
 
Agree with Sir Ray even with the emotion.

Back in the 70s and 80s there really was a feeling at most roads' headquarters that the slow drop in traffic over the decades was going to be permenant. No one, even the transport economists types at the AAR, DOT, and think tanks ever dreamed of the traffic volumes like we have today. And, who would have thought of China being a manufacturing center for the U.S. with the volumes of consumer goods being imported via container through West Coast ports. Even as recent as 1990 those thoughts would have been laughed at.

And, from a financial perspective, rail assets are largely infrastructure that require years to plan, build, and reap in return. Traffic can drop like a bar bell with any down turn in the economy.

  by CJPat
 
Due to changes in the economy and the country in general, business and government stopped long term planning and only held short term focus (you can still see them doing it even now). It used to be that these organizations had a 5, 10, 20 & even 50 year plan for where they wanted to be. Companies now can't seem to see beyond this or maybe next fiscal quarter. Because of this, they make foolish decisions that destroy long term potential for short term gains. The corporate executives, as well as politicians, have very little desire to craft the company (or the country for that matter) to create a "lasting monument" to themselves for future generations. Instead, the idea is to do whatever they have to do to personally profit now and then sell off and bail. Case in point-Enron, World Com, NJ State Gov't, the various banking institutions, etc.

  by RailBus63
 
CJPat wrote:Due to changes in the economy and the country in general, business and government stopped long term planning and only held short term focus (you can still see them doing it even now). It used to be that these organizations had a 5, 10, 20 & even 50 year plan for where they wanted to be. Companies now can't seem to see beyond this or maybe next fiscal quarter. Because of this, they make foolish decisions that destroy long term potential for short term gains. The corporate executives, as well as politicians, have very little desire to craft the company (or the country for that matter) to create a "lasting monument" to themselves for future generations. Instead, the idea is to do whatever they have to do to personally profit now and then sell off and bail. Case in point-Enron, World Com, NJ State Gov't, the various banking institutions, etc.
This is a recent issue, though. The retrenchment of the U.S. railroad industry occurred over five decades - many of the decisions to cut main lines and reduce capacity were made by good leaders who were trying their best to save their companies.

JD

  by BR&P
 
Don't forget the role that unfair taxation rates played in asset reduction. It's hard to look far into the future when you are paying exhorbitant taxes today on something that you can get along without. Unfortunately, there are things that the railroads could get along without 15 years ago that they wish they had in place today. At least some of the blame has to be placed on the states and municipalities.

  by CJPat
 
Although I agree that from the 1950's into the 1980's, the decisions made by the various leaders were well intentioned and trying to save their companies or establish their legacies; there was a decided shift in corporate and political strategy.

At some point, these business and political leaders decided that the future was somebody else's issue to deal with. They switched into immediate realization of personal benefit. It basically stopped being a "chess game" and became an "I want it now!" perspective regardless of what impact it had on others or on the company's future.

My personal observation and case in point revolves around all the layoffs between 1988 and 1998. Companies struggling to improve their bottom line discovered that with the labor law changes, it was very low impact to declare job positions as "no longer required" and then layoff the necessary personnel. This had an immediate improvement on the bottom line in that it quickly reduced monthly expenditures of pay and benefits. Company financials immediately improved and the leaders/managers became immediate "heroes" as the company became ripe for sell off. Unfortunately, the long term ramification was to cripple the production capabilities of the company by overloading the remaining workforce until the company began to slowly bog down and become stunted. However, it was typical that after a CEO or president "saved" the company from immenent doom, he/she quickly negotiated an end to their contract so they could move on to another company to be hired at higher salary & benefits because of how "effective" he/she was. He/she basically did not want to stick around when the impact of his decision was actually realized.

  by LCJ
 
One of the key drivers of all of this is the emphasis by analysts on quarterly financial reports. Corporate managers are trained these days to run things so as to please analysts in hopes of positively affecting share market price -- "doing the dance" for Wall Street.

Extra compensation for managers based on share price (a current snapshot of shareholder wealth, after all) drives them to do things that put things in a positive light in quarterly analyst advisories.

Managers that buck the trends in the interest of long-term objectives and say "to hell" with securities analysts are often punished, while boards of directors love paying outrageous salaries, bonuses, and stock options to CEOs that boost the stock price right now.

All of this tends to induce a kind of short-sighted, tunnel vision on the part of managers. Long term capacity planning just doesn't come into the picture very much.