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  • Time To Re-Invent the Iron Horse?

  • 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

 #364476  by 2nd trick op
 
It has now been just about forty years since an interest in entrepreneurship revived simultaneously with the graduation from college of the first wave of the "baby boom" generation of the 1950's. The economic system of the immediate post-WW II era expanded rapidly, but it was both rigidly structured by legislation engineered to protect specific interests, and (temporarily) shielded from international competition since most of the rest of the world was either in chains or in ruins.

Within this framework, the railroad industry had little incentive to become lean and mean. High-value and short-distance freight was being steadily lost to the truckers, but there was plenty left over. Operating railroaders were among the aristocrats of organized labor, and a streamliner or two could be subsidized as a public-relations gesture.

By 1970, when this writer was a college senior majoring in Business Logistics, a handful of forward-thinking firms were recuiting in the house organ of Delta Nu Alpha, the transportation major's honorary. One of the most prominent was Arthur Imperatore's North Bergen, N J-based A-P-A. It didn't get much attention, as it had a very short haul in a region not viewed as promising for business; the "glamour girls" of freight in those years were Yellow Freight, Flying Tigers, and to a lesser extent, Roadway. Most of the rest were viewed as limitied to narrowly-defined markets by the regulatory structure of the time, and constantly fighting the petty corruption and racketeering that was always found in the truck-terminal districts of the large cities.

As for the railroads, they were viewed at the time as likely to devolve into a carrier of last resort, suitable only for what the truckers and barges couldn't, or wouldn't handle. The outspoken John G. Kneiling had pointed out in a well-written Trains article of the time that the carriers' attitude could be summarized as "We have the technology, and you will have to adapt your business to fit it." A couple of innovations, such as Reading's Bee-Line service, which attempted to forego traditional crew-district and job-classification rules to make direct siding-to siding moves of a handful of cars over short distances, were proposed, but never took root.

Most to the regulars here are familiar with the more positive developments which slowly evolved beginning about ten years later. The issue facing the handful of remaining Class I's is lack of capacity, and while the certain rise in the cost of petroleum over the long term is going to give rail carriage and advantage over shorter and shorter distances, this would likely require a return to the four-track mains of an earlier time, and the design of much more sophisticated dispatching and signalling systems.

But meanwhile, Mr. Imperatore, now in retirement, saw the increasing congestion and absolute limits on further highway expansion in the core New York/New Jersey Metro, and proceeded to re-invent the ferry system, now cast aside and ignored by the regulators and labor unions which had allowed it to strangle. There is a lesson here for the would-be rail entrepreneur.

Dozens of functional short lines and regional rails are now in operation, and within the area between the Appalachians and the Rockies, nature provides relatively few obstacles to knitting a few of these together into what Trains editor David Morgan liked to call a "someplace-to-someplace" operation. The lack of previously defined crew districts should aid in the development of marketing measures built around flexible, near on-demand service. And labor relations don't have to descend into all-out warfare; basic hours-of-service considerations were a focal point of the reinvention of the trucking industry during the 1980's.

The creation of a new heavy-duty surface transportation system doesn't have to revolve around some master plan conceived within the insulation of the Beltway. Simple entrepreneurship will take care of that if it is not allowed to be ensnared in politics by the vested interests who feel they have too much to lose.
Last edited by 2nd trick op on Mon Feb 19, 2007 9:42 pm, edited 2 times in total.

 #364540  by JoeG
 
Mr Imperatore's venture into the ferry business in New York Harbor was very interesting, because he was the first entrepreneur in generations to try to make a profit in the commuter business. Then 9/11 made his ferries vitally important as the downtown PATH line was knocked out of service. His company got some government contracts, and got new ferry terminals constructed, mostly or entirely at government expense.
But with the return of PATH service, and with the removal of subsidies--along with various lawsuits and other legal actions accusing the the Imeratore company of overcharging the government and not paying its port charges, etc, it's not clear if his ferry service can succeed. It recently raised its fares again; right now a monthly ticket from Hoboken terminal to Wall St cost $182.50, while PATH costs $1.20 a trip, which would be $48 for a 20-day work month. (Path rate is the discounted rate.) There is still a considerable network of ferry routes, with connecting, included in the fare, bus routes in some cases.
So, the verdict isn't yet in on Imperatore's ferry venture. Should it succeed (I hope it does) it will have benefitted from government construction of ferry terminals, so it isn't a pure private business success story.

The freight business undoubtedly provides opportunities that didn't exist 4o years ago. The Class I railroads have, in effect, spun off some lines to shortline operators that have succeeded. I guess the biggest was Wisconsin Central, that got taken over by a Class I. In the east, we have Ohio Central and Reading and Northern as successful, profitable short lines. I also think shortlines could develop niches in originating and terminating intermodal traffic. This is a fast-growing part of the transportation business that is suitable for entry by a shortline. Incidentally, I noticed that Schneider National's website,
http://www.schneider.com/, has no trucks pictured (it claims to be the nation's largest truckload carrier)--it shows a container train and talks about intermodal! So, even Schneider is in effect willing to short-haul itself with rail.
Another thing is that the Class I's have basically abandoned loose-car railroading. It seems like they are not interested in much short of dedicated unit trains. Short lines can definitely fill a need here, and have done so.
The problem is, just as Imperatore is having a tough time making money on his ferries, even with government-supplied terminals, I don't see how an entrepreneurial rail passenger-service business could succeed, except maybe for some special, super-premium situations, like the Alaska Railroad cruise trains and maybe, the AOE service--which is also having trouble.
So, while I see a great future for various rail freight ventures, I still see the need for government involvement and subsidy for rail passenger service.

 #364683  by Irish Chieftain
 
Comparing short-line freight service to some nonexistent ideas for passenger rail restoration would be apples/oranges. Furthermore, the big railroads in the USA in the past did not become big via mere grass-roots idealistic "entrepreneurship"—they became so because old money and the government backed them. Same thing with the truckers—now imagine trucking industries having to shoulder the entire cost of the interstate highway alone, without government intervention.

The "Iron Horse" has been reinvented already—in Japan, France, Germany, Spain, even South Korea (China is next) and there is no looking back, nor any burden on the respective states thereof.

Imperatore operated an overpriced passenger-only ferry with absolutely no amenities at a low margin, serving a very limited market. He almost fell off the radar once or twice. I've used it a number of times. He does have competition—the NYC "Water Taxi", who have taken over a few routes that NY Waterway abandoned (their boats are even smaller).

BTW: On Glenn Beck last night (CNN Headline News), it was revealed that over ninety percent of businesses in the USA are small businesses. They generate a very low amount of tax revenue. How will the USA be able to sustain its infrastructure, government(s) and military from that? because borrowing is not infinitely sustainable, and the dollar's status as a reserve currency is rapidly being lost to the euro (the central bank of the euro is in a city served by 200-mph ICE trains, incidentally).

Further, I don't see a connection to Amtrak.
 #364780  by NellieBly
 
Mr. Irish Chieftan:

You need to take some economics courses. Businesses don't pay taxes. Their customers, owners, and/or workers do. Taxing business simply raises the cost of production, which means either lower wages, lower profits, higher prices, or some combination of those. We should be very happy that 90% of American businesses are small businesses. That's one reason our economy is growing and prospering, while those of Europe and some of the more mature Asian economies are stagnant.

They are all economies that have spent a fortune on high speed rail, and operate their trains at a loss. Transportation in North America (for both freight and passengers) is much less costly than in Europe and Asia.

I'm not going to defend Sal Imperatore, because I don't think ferries are generally an economically viable means of transportation. They virtually require subsidies. But please put aside this "debtor nation" stuff. Remember the 1980s, when Japan was going to eclipse the US and buy all our assets? Didn't happen, and it's not happening now with China, or Europe or (pick your villian...).

Believe me, you're not the first to write off capitalism. But Karl Marx is long dead, and we're still waiting for capitalism to fail.

 #364819  by midnight_ride
 
I'm with Irish.

Respectfully, the ideas put forward by 2nd Trick Op are libertarian/free market claptrap. Entrepreneurship and private industry have proven again and again to have their own interests at heart-- not the interests of their workers or the greater good. As a first step the United States would do well to nationalize its passenger and freight rail system and then start looking to do the same with the health care system and certain manufacturing sectors.

But what do I know? I'm a socialist.
:wink:
 #364911  by NellieBly
 
Socialism stands on its record of accomplishment.

 #364924  by RichM
 
I'm laughing my butt off... Nellie, you don't get it...

Socialism would work, but it's always been managed by the wrong leaders...

Interests of the workers? Nice thinking, comrades.

Can we go back to the ongoing discussion about how the government needs to spend an incredible amount of money to transport about 2% of the traveling public again?

 #364931  by midnight_ride
 
Of all the world's reactionaries, why are Americans always the least intelligent and the most fervent?

You are the only people left in the world who believe so totally in the saving graces and moral righteousness of the free market. The economies that will pass that of the United States in the next 20-50 years-- China, the European Union, India-- will do so because they are at least in part planned economies.

It is an utter fantasy bordering on the pornographic to think that without significant long term government intervention that railroads-- one of the most environmentally friendly and labor efficient modes of transportation of freight and people-- will persist in this country.

Pure capitalists will vilify and defend on cost and profit alone. In the long term this is idiotic, not to mention morally bankrupt. Though considering the source, we should hardly be surprised.
 #364936  by NellieBly
 
See my previous comments. And I wouldn't hold my breath waiting for the EU, China, and India to overtake us. You may turn blue.

 #364942  by Irish Chieftain
 
RichM wrote:Can we go back to the ongoing discussion about how the government needs to spend an incredible amount of money to transport about 2% of the traveling public again?
You mean that same canard? If we actually put best practice into practice as far as passenger rail, is it that inconceivable that the percent of the traveling public that intercity rail would transport would rise? as it indeed has done where this has been implemented, to significant degrees?
NellieBly wrote:You need to take some economics courses. Businesses don't pay taxes. Their customers, owners, and/or workers do. Taxing business simply raises the cost of production, which means either lower wages, lower profits, higher prices, or some combination of those
Companies are regarded as individuals, and therefore pay taxes as companies. (This is from "Principles of Economics", which I studied well over 1½ decades ago.) The taxes of individuals within the business do not account for everything the business pays.

And when one says "lower profits", where are the ethics and scruples in that phrase? Lower profits are not losses—unless all targets have to be set by the min/max calculus equation? based on what factors? (they are still profits.) And then, who gets the money, the company (reinvestment), the officers (salary levels), or the investors (dividends)? Does everything have to be a huge windfall, or else people at the top automatically take the money and run? Are we not "in it for the long-term" anymore?
We should be very happy that 90% of American businesses are small businesses. That's one reason our economy is growing and prospering, while those of Europe and some of the more mature Asian economies are stagnant…They are all economies that have spent a fortune on high speed rail, and operate their trains at a loss
You quite evidently do not read the news. The European country with the largest economy, Germany, has surpassed China in terms of net exports. You seem to be ignoring how robust China is—anything but stagnant—and India is already declaring itself to be a "superpower" (they would not do so prematurely). None of those countries have the collossal debt of the USA—much of which is owned by these countries. And again (I must repeat), the age of the dollar as a reserve currency is already under threat by the euro.
We should be very happy that 90% of American businesses are small businesses. That's one reason our economy is growing and prospering, while those of Europe and some of the more mature Asian economies are stagnant
Are you aware of what propelled the USA to greatness? No, it was not small businesses. It was our manufacturing, even more than our agriculture. We've lost that to an almost deadly degree—and we are also losing our information technology just as rapidly.

And I hope you have not forgotten: We are at war. War cannot be sustained by borrowing alone (virtually speaking, due to the far lowered tax revenue). And certainly, war cannot be sustained by reliance on other countries to supply a huge chunk of our munitions and fighting gear (last time we were so in need was the Revolutionary War, and we needed Benjamin Franklin to negotiate with France for munitions)—we don't even make our own metal casings anymore! Like it or not, we need tax revenue and home-based heavy industry to support the war effort. Repealing taxes during a time of war is unprecedented. I think you are in denial as to which economies are stagnant versus which are not.
Transportation in North America (for both freight and passengers) is much less costly than in Europe and Asia
Care to cite the figures that state same?
please put aside this "debtor nation" stuff. Remember the 1980s, when Japan was going to eclipse the US and buy all our assets? Didn't happen, and it's not happening now with China, or Europe or (pick your villian...)
You mean it's not happening right now to the degree that we're being thrown into crisis—but it is happening, and it has been happening for years. Japan could not make the assault on our assets that you assert due to their pacifist constitution—US military retaliation was a very real possibility. (However, Japan has thrown off those shackles as of late, by revising their constitution under new PM Shinzo Abe.) As for China, I urge you to read Sun Tzu's The Art Of War—China's been at war with the USA since the 50s, even before the big Nixon-Kissinger sellout, and they've been extremely subtle.

Have you forgotten that the USA was once the world's largest creditor nation?
Believe me, you're not the first to write off capitalism
Who's writing off capitalism? I'm condemning dishonesty and greed, neither of which are proper components of capitalism, or of any other economic theory for that matter. As for socialism, that's okay so long as its selective in its application?
Last edited by Irish Chieftain on Tue Feb 20, 2007 5:53 pm, edited 2 times in total.
 #364983  by villager
 
NellieBly wrote:Socialism stands on its record of accomplishment.
Please compare the GDP per capita of the USA and the GDP per capita of Sweden. Then compare indicators like crime rates, literacy levels, infant mortality, life expectancy, and public health spending, oh, and the two country's rail systems, and check back in.

The person above nailed it. The iron horse has successfully been re-invented in europe and japan. We've overfed our airlines and road systems here.

 #365006  by UPRR engineer
 
John_Perkowski wrote:MODERATOR'S NOTE:

Mr 2d Trick Op contacted your Moderators before he posted this.

I think this piece merits a careful read, and then a hard look in the context of Amtrak.

Mr 2d Trick Op chose our forum because we have hardcore, literate posters. I simply ask you to look at your response before you hit the send button.
Anyone but me notice John botched 2nd Trick's username, then adds a warning for the rest of us to watch it on the send button. Very cool.

I have a few magazines from the 30's and 50's that talk about where US rail is headed, the railroads passenger trains and what not. In one of the Trains magazines, theres an article about railroading in Russia titled something like "Are the Russians doing it better then us". Pretty interesting stuff.
 #365019  by jb9152
 
villager wrote:Please compare the GDP per capita of the USA and the GDP per capita of Sweden.
OK. According to the IAEA (International Atomic Energy Agency) databank, in 2004 Sweden's was approximately $28,400 and the USA's was approximately $40,100.

Inspecting the CIA world fact book or any other number of online resources shows a disparity of the same basic magnitude.

But what does this have to do with Amtrak?

 #365044  by JoeG
 
Guys--


I enjoy arguing about economic systems at least as much as anyone here, but I've found it just doesn't work at our Forum; it just degenerates into insults, and no one listens.

I've cleaned up this thread a bit.

Let's get the discussion back toward passenger rail.

 #365136  by Otto Vondrak
 
...and I moved it to the Railroad Operations forum, since it has little to do with Amtrak and more about the industry as a whole.

Enough with the snarky nonsense. Carry on with the constructive conversation.

-otto-