KEN PATRICK wrote:i love these blogs. they show an amazing lack of knowledge about railroad fixed/variable costs , pricing and management rewards. think of adding $40mil in fixed costs and $3-$4mil in variable costs/year because you don't want to increase the 10' roof cut an additional foot, use steel ties, and pandrol fasteners to get to 22'? it's a no-brainer. run the grinders thru a few times.
our state suffers from high transportation railroad pricing. it kills new business. as a member of the freight advisory panel i see presentations that cite the northern route without addressing this tunnel and pricing. it's foolish for mbta to spend anything on pas without extracting pricing concessations. also, the ns hype that they will spend $132mil and not fix the tunnel and two bridges is just silly. lastly, ns mechanicville to chicago is not competitive. they got the short end in the conrail break-up. ken patrick
The only poster who has shown "an amazing lack of knowledge" (or that a little knowledge can be a dangerous thing) is, unfortunately, you Mr. Patrick. Your thesis about intermodal shows a complete lack of understanding about railroad economics; your cost-plus pricing premise and argument that PAS should handle NECR/CN traffic to the P&W a lack of knowledge about railroad marketing; your promotion of how CSX should handle blocks of stone traffic into NYC a lack of understandng about railroad operations, your stubborn misunderstanding about the capital cost justification for Mechanicville a lack of understanding about railroad finance; and, your premise about what it will take to provide full clearance into Ayer a lack of understanding about railroad engineering.
To the point about how NS economically justified Mechanicville, though you have shown time and again an unwillingness to "get it", here are the likely benefits that supported the investment:
1. Cost savings of rent to CP for the intermodal terminal operation it replaced; 2. cost savings for the auto traffic handled by a shortline; 3. new traffic growth in the Chicago lane and future Crescent Corridor lane; 4. cost savings and cost avoidance of doublestacking the Ayer traffic between Mechanicville and Chicago; and, 5. likely operating savings of a modern terminal vs. the smaller terminal replaced.
The likely marginal analysis that NS faced in deciding filleting/toupeing in a mixed-use terminal vs. clearing the route into Ayer obviously lead them to the decision they made...with a payback exceeding 10 years by my estimation to have cleared into Ayer instead of laying out a PORTION of Mechanicville's capital costs for filleting/toupeing and adding additonal terminal handling costs, and with the likelihood that some sizable portion of the cost to clear into Ayer will be assumed with public funding within the 10 years. Sure seems like a no-brainer.