Shippers vs. Amtrak

[Suburban Station]

Glad to see that point being made publicly. People need to realize that freight is the only reason the tracks are there in the first place; it the freight goes away, the tracks will eventually go also. A number of former passenger routes could not be restored today because when the freight was rerouted the tracks disappeared.

I'd have to disagree with that. Railroads would have never been built across the U.S. at such as scale if it weren't for governmental subsidies in the form of massive land grants, eminent domain assistance, and significant investments in track and safety infrastructure. Governments agreed to this because of the benefits for both passengers and freight, and Amtrak was created when railroads were no longer interested in upholding the passenger side of the bargain. Part of that agreement is that Amtrak gets priority and now the freight railroads have decided they don't want to abide by the agreement and they want to make the service so bad it gets cut entirely or that the government writes more big checks to build more track.

When railroads are seeing record operating ratios and earnings, I don't think it's too much to ask them to maintain their tracks and build enough sidings so give Amtrak the priority to which it is entitled by law.

Yes, it is too much to ask. And much of the land grant routes had to be rebuilt because they were built to maximize land grants rather than operations.

In the end, the us needs to spend more building passenger rail infrastructure. There is no other way.

[SouthernRailway]

Glad to see that point being made publicly. People need to realize that freight is the only reason the tracks are there in the first place; it the freight goes away, the tracks will eventually go also. A number of former passenger routes could not be restored today because when the freight was rerouted the tracks disappeared.

I'd have to disagree with that. Railroads would have never been built across the U.S. at such as scale if it weren't for governmental subsidies in the form of massive land grants, eminent domain assistance, and significant investments in track and safety infrastructure. Governments agreed to this because of the benefits for both passengers and freight, and Amtrak was created when railroads were no longer interested in upholding the passenger side of the bargain. Part of that agreement is that Amtrak gets priority and now the freight railroads have decided they don't want to abide by the agreement and they want to make the service so bad it gets cut entirely or that the government writes more big checks to build more track.

When railroads are seeing record operating ratios and earnings, I don't think it's too much to ask them to maintain their tracks and build enough sidings so give Amtrak the priority to which it is entitled by law.

Yes, it is too much to ask. And much of the land grant routes had to be rebuilt because they were built to maximize land grants rather than operations.

In the end, the us needs to spend more building passenger rail infrastructure. There is no other way.

Agreed.

Profits that railroads make these days are due to slashing expenses and implementing 'precision scheduled railroading'. Freight rail is in a recession, with traffic flat or falling.

But however freight railroads are doing: just because they have money does NOT mean that government can take it by passing a law.

If someone thinks that freight railroads' funds can be taken by government just because they have funds: would you be OK with government seizing your property just because you have it? I'm not OK with that.

[ThirdRail7]

In the language regarding delivering Amtrak trains to all scheduled passenger stops by the scheduled time therefor I don't see a corresponding requirement for Amtrak to deliver its trains at origin or an interchange point at the scheduled time, and what happens if the train is late out of its origin or its locomotive fails en route (requiring a request for assistance from a nearby freight locomotive). Normally the freight railroad works with Amtrak to schedule the hot freight trains right behind Amtrak; if Amtrak is an hour late showing up, should the freight trains be delayed to wait for it?

If the Amtrak shows up an hour late, the freight would likely be gone already so it wouldn't be an issue unless an overtake situation occurs. At this point, the operating agreement states:

The freight carrier “shall make every reasonable effort … to deliver Amtrak trains to all scheduled passenger stops … by the scheduled time therefor” and “to avoid excessive delays and, consistent with safety, to make up delays” regardless of where they occur, as well as “to service, inspect, and perform running repairs as necessary” so that an Amtrak train may complete its trip over CSX lines.

The keywords are reasonable and regardless of where they occur. No one has ever stated that Amtrak is be operated without delay, and there are plenty of reasonable reasons to keep a slower freight ahead. A perfect example was a few days ago where a freight train was disabled. Once the train picked itself up, it was kept ahead of the Amtrak. Why? The freight crew was on short time so they kept it moving to meet is relief so the single-track railroad wouldn't get paralyzed. Even if it was doubled track railroad, if you can keep the train moving to avoid it sitting on the main, that is a good move.

Upstate New York had ice and snow, so the host implemented its snow plan. This means certain routes are straight railed. If a train is following in that kind of territory it is entirely reasonable for the train to follow since there are no crossover moves allowed.

However, if you just keep the train behind it, with nothing opposing it and there is a chance for a run-around, why not use it...particularly in territory that has received investments.

In the Acca examples cited above, if Amtrak is late out of Washington according to the schedule worked out with CSX, does CSX still have a responsibility to stab its freight trains to allow the straggler to overtake?

That is part of the problem. In the ACCA example above, multiple agencies put money into building a bypass around the yard, which resulted in extra capacity. Yet, CSX is known to park trains on a track that was built for the sole purpose of avoiding conflicts. Why would they park a train on it and render it inaccessible? I can't remember the yard but it was along the Sunset limited route (in Up's territory). As part of an agreement for the transcontinental route (when it went to Florida), a bypass was financed by Amtrak. Naturally, trains were routinely parked on it, causing delays.

My point is there is a lot of money being invested in the infrastructure that doesn't come from the hosts. Some years ago, Virginia threw a major hissy fit when they paid for switch heaters along the RF&P subdivision. Even after all of that money was spent, some trains were delayed and others were canceled due to frozen switches. They weren't turned on. That hardly seems reasonable.

If there was ever a time for major freight lines to ask for Federal government relief re: Amtrak, this would be it. There has never been a Department of Transportation as friendly to business as there is today (before the 1960s it may have been friendlier, but would have been a different department) and there’s a good chance that there won’t be an administrator as friendly to business for a while after 2020.

However, Congress is loaded with representatives from states that invested in these trains. That could be a bit of monkey wrench.

Makes me wonder if Anderson is trying to get ahead of the curve by announcing LD cuts, taking some trains off (and paying more for others) as a bargaining tool to keep the Class Is from hobbling all of the LDs.

I doubt if he cares if the LDs are hobbled. I believe he is getting ahead of the curve for the benefit of his "corridor" plans. Lost in all of this talk is corridor trains take a major hit as well. Mr. Shulstig has pointed that out many times. Indeed, two of the worst-performing trains are state-supported, corridor trains:


Report: 2 Illinois Routes Among Amtrak's Worst Performing

CHICAGO (AP) — TWO OF Amtrak's Illinois trains routes are among the worst-performing in the nation, according to a new government report.

Amtrak's Illini and Saluki trains run between Union Station in Chicago and Carbondale in Southern Illinois.

The Office of Inspector General for Amtrak released a report Thursday revealing that only 6% of northbound Illini trains arrived within 15 minutes of their scheduled time during the 12-month period ending last September, the Chicago Tribune reported. Only 17% of southbound Saluki trains arrived on time, and 18% were late by more than an hour.

Mr. Anderson has mentioned additional corridor trains. If you can't two trains a day over the road, it is doubtful increased numbers will work to your benefit.

[ThirdRail7]

If someone thinks that freight railroads' funds can be taken by government just because they have funds: would you be OK with government seizing your property just because you have it? I'm not OK with that.

I would venture to say that if the freight railroads take the government's funds ( in the form of improvements, providing additional tracks, contributing for new bridges and signal systems to aid passenger operations.... which they tend to do in downturns), you're ok with a return on the investment by granting the access and priority that was part of the deal...even when things start are going well....correct?

[SouthernRailway]

If someone thinks that freight railroads' funds can be taken by government just because they have funds: would you be OK with government seizing your property just because you have it? I'm not OK with that.

I would venture to say that if the freight railroads take the government's funds ( in the form of improvements, providing additional tracks, contributing for new bridges and signal systems to aid passenger operations.... which they tend to do in downturns), you're ok with a return on the investment by granting the access and priority that was part of the deal...even when things start are going well....correct?

No.

First, freight railroads don't "take the government's funds" the same way that governments (think that they can) take funds of private businesses.

Governments have goals, mostly for improved passenger transportation but sometimes for freight, and sometimes freight railroads and governments work out the terms of government payments for things that do benefit freight railroads.

The duties for both parties should be spelled out in whatever contract the freight railroad signs. That's it. There should not be any open-ended ability of government to take anything more, and there's no open-ended entitlement of government to get more. If it's not in the contract signed by the freight railroad, then no right exists.

[ThirdRail7]

No.

First, freight railroads don't "take the government's funds" the same way that governments (think that they can) take funds of private businesses.

Governments have goals, mostly for improved passenger transportation but sometimes for freight, and sometimes freight railroads and governments work out the terms of government payments for things that do benefit freight railroads.

The duties for both parties should be spelled out in whatever contract the freight railroad signs. That's it. There should not be any open-ended ability of government to take anything more, and there's no open-ended entitlement of government to get more. If it's not in the contract signed by the freight railroad, then no right exists.

However, if the freight provider accepted the money for the upgrades and agreed to run the trains with priority or with less interference (or just follow the law that is currently in place because like it or not, it is a law) then this conversation about being "forced to build sidings" or operate the trains and the hosts "not being paid" may be entirely inaccurate.

The bottom line is without viewing an actual operating agreement, no one really knows what was or is agreed to...which is exactly why the author of the article I linked wants to see all of the operating agreements.

So without us seeing the agreement, we don't know if "Amtrak forces the freights to maintain tracks to passenger standards ( even though the operating agreement above provides an option to downgrade tracks, lower track speeds and even abandon lines ) or Amtrak doesn't pay its cost (even though the operating agreement above clearly states it must Amtrak must pay its incremental costs) or if the hosts aren't being compensated for.

This is the point I was attempting to make to Electricron: how do we know if the hosts are being compensated or if the compensation is fair market?" What are the provisions? How do we know what the agreement is or what may have been exchanged for what?


Another example: Three new interlockings were built on the RF&P in the over the last for CSX in exchange for on-time performance guarantees and for additional capacity. That's not exactly cash in your hand but it is definitely a valuable investment that definitely benefits the host. In this case, the government )of VA) did exactly what you stated: they paid for the additional capacity.

[SouthernRailway]

Trains magazine addresses this point in the latest issue.

An article about Amtrak states that Amtrak pays freight railroads so little for priority and track maintenance and improvements that freight railroads aren't incentivized enough to make Amtrak a priority. To the contrary, commuter railroads (which can obtain funds from highway trust funds) can pay freight railroads enough to make commuter railroads a priority. Thus the Trains author states that a key fix for Amtrak is to have Amtrak pay freight railroads more.

[rcthompson04]

Trains magazine addresses this point in the latest issue.

An article about Amtrak states that Amtrak pays freight railroads so little for priority and track maintenance and improvements that freight railroads aren't incentivized enough to make Amtrak a priority. To the contrary, commuter railroads (which can obtain funds from highway trust funds) can pay freight railroads enough to make commuter railroads a priority. Thus the Trains author states that a key fix for Amtrak is to have Amtrak pay freight railroads more.

No duh. It is not rocket science to figure out that if someone pays you more, you are going to make their job a priority. Amtrak does the same exact thing with commuter railroads who pay little to use Amtrak tracks (looking right at you SEPTA).

[quad50cal]

It seems that the freight railroads, with their impercise and unscheduled railroading, are doing more to drive away any freight customers than any passenger trains could ever do. I think CSX, in particular, is getting ready to wrap things up and sell what's left of the railroad to government agencies and scrap dealers.

That's the important thing to realize. The freight shippers have been just as mistreated by the freight railroads. The freight shippers are extremely upset at being forced to shoulder increased costs for worse service at the behest of the PSR mania that prioritizes short term profits.

In an era where the federal government is trying to revitalize industry, it is really poor industrial policy to allow freight railroads to unjustifiably pad their profits at the expense of stifling inventory and transportation costs for manufacturers, particularly those that rely on just-in-time manufacturing.

[mtuandrew]

quad50cal: but then, that’s American industry in the age of portfolio management, where there seems to be less emphasis on growing a corporation & receiving dividends as there is on pumping up the value and dumping the stock at its peak. BNSF, a wholly owned subsidiary of Berkshire Hathaway, is the only major road to not fully embrace PSR, and it shows operationally for the best. (I’m not sure if KCS has also mostly skipped PSR, but they don’t host Amtrak or any passenger service so they’re irrelevant here.)

[SouthernRailway]

It seems that the freight railroads, with their impercise and unscheduled railroading, are doing more to drive away any freight customers than any passenger trains could ever do. I think CSX, in particular, is getting ready to wrap things up and sell what's left of the railroad to government agencies and scrap dealers.

That's the important thing to realize. The freight shippers have been just as mistreated by the freight railroads. The freight shippers are extremely upset at being forced to shoulder increased costs for worse service at the behest of the PSR mania that prioritizes short term profits.

In an era where the federal government is trying to revitalize industry, it is really poor industrial policy to allow freight railroads to unjustifiably pad their profits at the expense of stifling inventory and transportation costs for manufacturers, particularly those that rely on just-in-time manufacturing.

It's poor industrial policy for governments to micromanage private businesses.

Government should have strong antitrust enforcement and otherwise should stay out of things.

[gokeefe]

It's poor industrial policy for governments to micromanage private businesses.

Government should have strong antitrust enforcement and otherwise should stay out of things.

Joining late but I took a good read through the full exchange. I would note that thus far you haven't acknowledged that the railroads are a regulated utility and that they benefit from a legal structure that gives them monopoly control over specific markets and services.

The phrase "industrial policy" and other previous comments in your posts seem to treat the railroads as non-utility type corporations engaging in free market commerce without government oversight of services.

As a common carrier the railroads have a much more involved regulatory structure that is very similar to electric and communications utilities. Furthermore they are protected from competition by the regulators who have significant requirements in place for the creation of new railroads or mergers of existing railroads.

This doesn't mean the takings clause of the Constitution is moot for railroads. However, it does mean that there is a very significant public interest that rests in the franchise chartered to the private railroads.

Congress has attempted to balance this interest with the needs of railroads to profitably operate as private entities. This has resulted in the creation of Amtrak itself, the subsequent Staggers Act and a variety of periodic reforms.

The process playing out right now represents the culmination of almost 50 years of operating history between Amtrak and the host railroads. I am hopeful that the result will be an agreement which ensures that the host railroads meet their obligations and includes reasonable enforcement measures that protect Amtrak's interests.

[SouthernRailway]

gokeefe, yes but that’s the problem: railroads are viewed as monopolies. But they shouldn’t be. Very few items that are moved by rail lack an alternative means of transport.

If railroads are monopolies, then the following should be as well:

Cable TV companies
Downtown department stores
Microsoft, as a provider of an Internet search engine

[ExCon90]

True--traditionally if you lived in territory assigned to a particular power company you bought your power only from that company, and if you were in General Telephone territory that's the phone you had. The railroad "monopoly" ended with the development of the internal-combustion engine, the pneumatic tire, and the paved road. By virtue of its fixed right-of-way a railroad might be said to have a monopoly of rail transport, but a list of commodities that can only be transported by rail would be very short.

[gokeefe]

Cable TV companies are in fact regulated as monopolies and pay franchise fees to their respective localities.

Downtown Department stores and Microsoft have open competition from others.

However, an example in consumer commodities I have heard of in Maine is grocery stores. Not sure if it was rumor or not but the story I heard was that a major local grocery chain had to divest certain assets in order to permit buyouts of smaller chains.