• Hey freight trains dont make money either...

  • 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

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  by QB 52.32
 
David Benton wrote:Perhaps they missed there chance when Conrail was created , one imagines how that would have worked if those lines were made open access ???
Since unless you convert the entire U.S. (North American?) system to open access owned by a neutral third party, basically Conrail did give "open access" to the Northeast and Midwest via their operations. In other words, an "open access" Conrail would not have changed the basic economics of gateways for the southern and western carriers who terminated/received traffic in Conrail territory and crossed the threshold, so to speak, from their system to a seperate entity. The only difference was that Conrail was a for-profit entity (and provided the operations).

Let's also not forget the complexity of operating an open access system....look how NS and CSX dealt with the "open access" in NY/NJ, South Jersey and Detroit at the Conrail split...they established a shared entity which is responsible for operating these shared assets and not operating their own trains/crews (except delivering/originating road trains) in "parallel" over the shared infrastructure. There's a reason the US railroads view open access as a worst-case scenario in any discussion of tightening regulation besides their own narrow self interests. IMHO, it seems to me that open access probably looks a lot better on paper than it would in the real operating and railroad economics world.
  by RussNelson
 
David Benton wrote:what market , if there is only one railroad serving a customer ???? .
unless you have a true free market ( which would mean open access ) , then shippers need some form of protection from excessive rates by the railroad .
David, you're a dear, but you obviously haven't studied economics. Otherwise you would simultaneously say "what market, if there is only one customer being served by a railroad ???? Railroads need some sort of protection against strikes by shippers." Or you would say "Railroads need protection against excessive taxation of their railbeds" or "Railroads need protection against excessive regulation by governments." or "Shippers need protection against their own stupidity for creating a business dependent upon a sole source of shipping" or "Shippers need to learn to buy futures guarding against rate increases by railroads" or "Railroads need protection against Truckers."

In other words, government is a blunt solution to a problem which admits many other solutions. Try reaching for a feather before you pull out your gun. As they say, "The (accountant's) pen is mightier than the (regulator's) sword."
  by 2nd trick op
 
Russ Nelson wrote:
In other words, government is a blunt solution to a problem which admits many other solutions. Try reaching for a feather before you pull out your gun. As they say, "The (accountant's) pen is mightier than the (regulator's) sword."
In theory, Russ, you are 100% correct. And in the overwhelming majority of situations where a prefectly- or relatively-competitive market stucture allows easy entrance and exit, and protection from expropriation (which, let's be truthful, was a primary consideration in the rebuilding of the steel industry, and is likely to figure more prominently in entreprenurial decisions until the Great Socialist Brotherhood again collapses under the weight of its foolishness) you are correct.

But like the electric power grid, the rail network requires huge amounts of capital, and is not mobile. Furthermore, as demonstrated by both UP's upgrading of the former Golden State Route and NS desision to develop a Harrisburg-Roanoke-Memphis gateway as a partial alternative to the former PRR main, grades are by far the driving factor in the current redevelopment of the rail industry. No one is going to suggest re-opening the former Rio Grande Tennessee Pass route in an attempt to go head-to-head with UP or BNSF.

While they came close in the late Ninteenth Century, the railroads have never operated in a complete vacuum with regard to both protection from, and the occasional use of, the state's monopoly on the use of coercion. The principle of eminent domain, which many of us who subscribed to Objectivist doctrines in our undergraduate days viewed second only to military conscription as anathema, was used to condemn private property for rail construction because in some cases, the rigid engineering constraints imposed by rail technology left it the only alternative.

So in the short run, given the increasing likeliehood of both private- and public-sector entities (not to mention the NIMBYs) fighting over a samll, but growing number of critical infrastructural sites, I view a well-thought-out procedure for open access as the lesser evil when compared to slow quasi-natrionalization if the thinking within the Beltway continues to regress.
  by David Benton
 
RussNelson wrote:
David Benton wrote:what market , if there is only one railroad serving a customer ???? .
unless you have a true free market ( which would mean open access ) , then shippers need some form of protection from excessive rates by the railroad .
David, you're a dear, but you obviously haven't studied economics. Otherwise you would simultaneously say "what market, if there is only one customer being served by a railroad ???? Railroads need some sort of protection against strikes by shippers." Or you would say "Railroads need protection against excessive taxation of their railbeds" or "Railroads need protection against excessive regulation by governments." or "Shippers need protection against their own stupidity for creating a business dependent upon a sole source of shipping" or "Shippers need to learn to buy futures guarding against rate increases by railroads" or "Railroads need protection against Truckers."

In other words, government is a blunt solution to a problem which admits many other solutions. Try reaching for a feather before you pull out your gun. As they say, "The (accountant's) pen is mightier than the (regulator's) sword."
I am arguing that open access is the answer , not blunt govt intervention . for what its worth Economics was my best subject , i got a 89 % pass .
  by Flat-Wheeler
 
"Open access" is not about a style of thong panties worn by you or your bed partner. So, Mr. Benton, are you saying that shippers should have a choice between who switches them and carries their carloads ? In my previous post in this thread, I pointed out what is needed to do this.

I have no personal motive, other than I believe rail is the most efficient method of transport over long distance haul. I want to see more use of rail, and more incentive for railroads to invest or keep their current infrastructure. I have witnessed too many lines pulled up, or left to rot in the backwoods, and think it's an atrocity. If that trend keeps up, we'll eventually have the equivalent rail network of India or Bangladesh. Where is the national support behind this form of transport ? Who's asleep at the switch ?

I see that NS and CSX are funding commercials on National/public TV. I guess the general thinking is they are so large, and raking in such huge profits, that they can afford it. But in reality, my fear is that they are simply diverting investment funds from track upgrades (or perhaps other required investment such as taxes due for an under utilized branchline) towards promoting their way of transport.

Perhaps Mr Benton has the right idea. It would certainly result in more use of current infrastructure, and more carloadings. However, it is still debatable whether the RR's as a whole would benefit from the increased amount of work. Profit margins would be chopped considerably, yet the focus of operation would be magnified 3 fold or more.

Perhaps "NellieBly" can elaborate a bit more and set the discussion in better perspective.
  by BR&P
 
Since Staggers, the railroads have finally been able to upgrade and modernize and become competitive again. All one has to do is compare the abysmal conditions in the mid 70's about the time of Conrail's formation with what we have today. I am not so naive to believe EVERY shipper out there is being treated in a wonderful manner, but going back to over-regulation or taking such radical steps as open access is throwing the baby out with the bathwater.

A far more pressing concern should be making sure the railroads have something to haul. Between the mass exodus of manufacturing from the country, and the current administration's stated opposition - hatred might be a better word - of coal, the question of who owns the tracks might become moot if there is next to nothing to be hauled.
  by RussNelson
 
2nd trick op wrote:Russ Nelson wrote:
In other words, government is a blunt solution to a problem which admits many other solutions. Try reaching for a feather before you pull out your gun. As they say, "The (accountant's) pen is mightier than the (regulator's) sword."
In theory, Russ, you are 100% correct.
In practice I'm 100% correct also. Some problems (such as linear infrastructure such as roads, rails, and pipes) are simply hard to solve, but some people want to jump at a government solution whenever free markets produce a less than optimal result. Is the government solution any better? Few people bother to ask that question.

If open access is truly an economical solution, then why don't the railroads get together, form a 501(c)6, and have it operate the railbeds?
the rigid engineering constraints imposed by rail technology left (eminent domain) the only alternative.
Is that really true? Use your creativity.
  by David Benton
 
RussNelson wrote:
2nd trick op wrote:Russ Nelson wrote:
In other words, government is a blunt solution to a problem which admits many other solutions. Try reaching for a feather before you pull out your gun. As they say, "The (accountant's) pen is mightier than the (regulator's) sword."
In theory, Russ, you are 100% correct.
In practice I'm 100% correct also. Some problems (such as linear infrastructure such as roads, rails, and pipes) are simply hard to solve, but some people want to jump at a government solution whenever free markets produce a less than optimal result. Is the government solution any better? Few people bother to ask that question.

If open access is truly an economical solution, then why don't the railroads get together, form a 501(c)6, and have it operate the railbeds?
the rigid engineering constraints imposed by rail technology left (eminent domain) the only alternative.
Is that really true? Use your creativity.
your'e asking alot of questions , bu you havent given any answers yet . What do you think is the best model for railroads in the USA to follow ?
  by RussNelson
 
David Benton wrote: you're asking a lot of questions, but you haven't given any answers yet . What do you think is the best model for railroads in the USA to follow ?
I don't know ... and I'm pretty sure that you don't know either, and I'm damn sure that no voters or politicians know. By asking your question you imply that there must be a single public policy. I argue that there shouldn't be a public policy. Give people private property rights and free markets, and they can figure it out on their own. Keep the government out of it, so that Coase's Law can operate.
  by Cowford
 
Give people private property rights and free markets, and they can figure it out on their own. Keep the government out of it, so that Coase's Law can operate
That IS public policy. :wink:
  by 2nd trick op
 
Cowford worte (quoting Mr. Nelson);
Give people private property rights and free markets, and they can figure it out on their own. Keep the government out of it, so that Coase's Law can operate

That IS public policy.
Sort of; the debate over the "right" of the Federal Government to regulate/interfere with (take your pick) interstate commerce is one of the most, if not the most complex issues in Constitutional law.

Article 1, Section 8, Part 3 of the United States Constitution reads:
(The Congress shall have power:) To regulate commerce with foreign nations, and among the several states, and with the Indian tribes; [/quote}

and the original intent was to prevent tariffs imposed by individual states from impeding trade between them.

But like the debates over Federal sponsorship of "internal improvements" which led to President Madison's veto of a major appropriation in 1817, and caused New York State to lauch the initially fabulously successful Erie Canal, which was then devolved and corrupted into a welfare measure by 175 years of governmental mismanagement, the subject just grew into a jungle of contradictory policies from there.

In the last scene of Ayn Rand's magnum opus "Atlas Shrugged", with the collapse of Big Government a fete accompli, the victorious anarcho-capitalists are supposedly "correcting" the "flaws" in the Constitution. I think it's a pretty safe bet that the article above is one that Rand, and possibly Alan Greenspan (who was a disciple of hers at one time), would have had in mind.

But would it have worked in the real world? Even Rand admitted in "Atlas Shrugged" that a railroad would have been too big and cumbersome to fit into "Galt's Gulch" (her fictional capitalist Shangri-La).

Admittedly, Mr. Nelson, there are encouraging signs that rail technology could evolve into something readily adaptable to much shorter hauls and much smaller markets. Wheeling and Lake Erie's rejection of intermodal traffic in favor of shorter hauls of carload and bulk freight is probably the best example to date, and the area between the two major mountain ranges is over-supplied with abandonded railroad grades. Read the "Entrepreneurship, Anyone?" post in the "If I had a Billion" thread from a year or two ago; believe me, I would love to see some further movement along those lines.

http://railroad.net/forums/viewtopic.ph ... te#p344894

But while a "mixed economy" leaves plenty of room for improvement, I wouldn't look for a complete renunciation of what has evolved to date. The vast majority of the electorate is, unfortunately, convinced that their day-to-day existence would be threatened by removal of the safety nets, and we can only hope that when the current rush to over-build them is rendered unworkable by emerging global pressures, cooler heads wil prevail and the productive core will be left intact.
Last edited by 2nd trick op on Tue Aug 11, 2009 1:45 pm, edited 3 times in total.
  by Gilbert B Norman
 
Mr. Cowford, John Galt is Mr. 2nd Trick's hero in this life, or otherwise a character in the Ayn Rand novel "Atlas Shrugged".

Someday, before I leave this planet, I am going to have myself locked into a room and not be let out until i have read AND COMPREHENDED that testament to individual freedom.

But from what i know of the novel's plot, John Galt would very much be the hero of private sector US Class I railroading, and very much the antithesis of the "pro-Amtrak' ("we want our trains; those rails belong to the people") socialist crowd.
  by Cowford
 
Mr Norman, thanks... that was an objectivist insider's joke. "Who is John Galt?" is first line of Atlas Shrugged and a question repeated throughout the novel... one way of translating it is "Who the hell knows?!?"

I couldn't recommend the book more highly, but as you alluded, it's not an easy read!
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