Your perspective - 30 year rewind

Let me preface that this thread is purely for interest in how those more in the know (those who have been alive longer than I, or those in the industry either now or then or both) think things may have continued to today had things gone differently in the late 60's and early-mid 70's, mainly, if Amtrak and Conrail had not been created.

I know that this has been hashed and rehashed before, in that railroads might not even really exist today, but I'm introducing a twist.

In my research, it seems that one of the underlying factors in the downfall of the old "guard" was, with increased competition from air and roads, the ICC refused to allow railroads to set their own prices and therefore not compete with other transportation methods.

Let's start with this: In the mid 1960's, before NYC and PRR initiated their merger (which seems to be the catalyst for the entire northeast RR collapse and merger into Conrail), the ICC let up on their price regulation, allowing the railroads to lower their prices and begin competing with other transport modes, and also was more prudent in approving passenger route changes. Would this have changed anything or would everyone still have ended up failing miserably anyway? Would this have still necessitated the creation of Amtrak or would passenger routes slowly be dropped by some railroads allowing others to continue and maintain some semblance of privatized LD service? (I know Amtrak is considered "private" but lets go look at it as the companies ran their own instead of leasing railspace to a centralized company.) Which railroads do you think would've survived, merged, etc. Any lines that were removed still in existence? And lines still here now that would've been removed?


I'm not looking to start a war here, just curious how, in an "alternate universe" perhaps, you would see this one divergence of the ICC changing things today?

ctclark,

The questions you posed are so broad that I can only attempt to answer specific parts.
As to the ICC allowing more latitude in rate-setting, is what you mean tantamount to having the Staggers Act passed in the late 1960's?

If that is what you mean, then yes, it may have been able to save both the NYC and PRR. Not only would they have been able to make rates to compete with truck transport, but they would have been able to make contract rates with specific shippers. The ICC was trying to regulate competition between railroads, keeping rates equitable so the railroads would be protected from being undercut by other railroads. The problem was the competition was not other railroads, but other means of transport.

This would also have allowed NYC and PRR to protect their capital investment by selling of lines that did not meet their standards of profitability. Marginal lines could have become short lines or regionals, or bicycle trails. Some semblance of freight traffic might have remained on the NH. What remains of the NH is now commuter only. Freight traffic is now handled by short lines, one regional, but mostly by truck.

I think the ICC messed up by allowing mergers of parallel railroads, rather than mergers of end-to-end railroads. If formerly competing railroads like NYC-PRR were allowed to shed excess trackage and physical plant, the result would have been trimmed-down line-haul railroads competing for business with each other and with trucks, rather than overblown messes like PC.

As to AMTRAK, maybe the long-distance trains should have remained in the hands of the railroads. Losses in passenger revenue should have been accounted on a basis of actual cost per train, rather than how it was done that resulted in passenger train budgets being a catch-all for indirect costs. Railroads showing losses on passenger trains even then should have been able to apply to states served by specific trains for a state subsidy. This would have the effect of the states being served being the ones to pay for the trains, rather than the lopsided system we have now where states who have few trains or none at all pay to subsidize passenger train service in only a few densely-populated states.

By operating their own passenger trains, even at a loss, railroads could take advantage of tax laws allowing a charge-off of losses to promotional expenses that would partially offset operating and amortization costs of passenger trains. Now they cannot: as you pointed out, AMTRAK is a separate entity. Although it is really a heavily-subsidized private corporation, in the public's perception it is a government agency. The railroads that bought into AMTRAK (or their successors) have to give AMTRAK priority, and host its trains even if their competitors do not. That is a long-term high price to be paying to get out from under a short-term passenger loss.

Les

As I said, this is strictly just wondering how people see things running differently had things been different in the 60s and 70s. I appreciate you indulging my curiosities even with the broadness of my "changes".

So yes, lets say the Staggers Act (obviously without that name, but to the same effect) was passed in the 1960's as opposed to 1980. The primary change here in this line of questioning is in fact that all railroads would have better opportunity to continue to compete with other modes of transportation, I'm aware the original reason for the ICC's "minimums" was to prevent undercutting, but let me preface that I think all railroads would've ended up lowering prices to an extent, so lets presume that price undercutting to simply create a monopoly would've been near impossible.


The questions were purposely vague, I'm not looking for any correct or incorrect answer, just looking for a conversation on different perspectives of what the railroading world would look like today had things been different to not, as I see it, seemingly "ruin" the railroads of the northeast so spectacularly. (Again, that's my perspective of what happened back then having been born almost 20 years later, perhaps it may have seemed a better idea back than.)

So, again, the primary point here is simply: What would be different now had the theories and intents of the Staggers been passed in, say, 1965 or so rather than 1980? The majority of the rest of the confusing questions in my first post were just to spark ideas as to what might have changed and what might be possible now, instead of just simple one sentence answers I was afraid I'd get along the lines of "There would be more railroads."

I thank you Les for indulging my curiosity with your thought out response, that is more or less the dialogue I was looking to start. Anyone else have any thoughts? Is this just a waste of everyone's time?

ctclark,

No, this is not a waste of time, and these are good questions.

I am a retired railroader. Most of my career was spent in the Midwest, the West, and the South. I worked for a railroad in Connecticut in 2005, having never been in New England before. I was shocked and dismayed by the condition of the rail industry there. Virtually all rail activity in the state was centered on passenger service. Nothing wrong with passenger service, rails are the best means for moving large numbers of people.

But freight traffic was vestigial. Hartford had no Class Ones serving it, just a regional, P&W, and a shortline, CS. Loose car, 1-3 cars per customer, were the norm. CS did handle unit trains, but only the lowest-value commodities (building demolition waste outbound, road salt in).

The railroaders themselves were friendly, cheerful, and professional. They were great people to work with. But they were faced with railroading in a post-industrial setting. When I was growing up in the 1950's, this part of the country was an industrial powerhouse. It was also the high-tech center of the country, famous for the manufacture of precision tools and machinery.
The industrial rail system was developed there to what was quite possibly its zenith for the entire country and possibly the whole world.

What I saw were miles and miles of empty industrial sidings. Most had their switches straight-railed or removed. These sidings lay alongside empty factory and warehouse buildings. Did the industrial base simply collapse, taking the railroads with it? Or did the railroads collapse first, and took the industries down with it? To what extent would early deregulation have been able to prevent this?

The main line serving Hartford is ex-NH. It connects Springfield MA with New Haven. It is owned by AMTRAK, and sees several short passenger trains a day running in push-pull mode. CS has trackage rights on this route for its mainline trains to Springfield and New Haven. CS also has two branch lines running out of East Hartford, both also ex-NH. One goes north to Windsor Hill, where it connects with another short line whose name I cannot remember. That line runs north to Springfield opposite the river from the AMTRAK line.

The other line runs east from East Hartford to Manchester CT. This line is also ex-NH and used to go to Boston. It once hosted both regular passenger trains and commuters. Both these lines are now freight-only, serving small customers.

Like yourself, I found myself asking "what happened here?" Some of these buildings predated the Civil War. An especially sad sight was the former Fuller Brush Company warehouse in Hartford. The yellow brick smokestack had crumbled down to where it only read "Brush Company". Likewise, the Colt Firearms factory in central Hartford sits an empty shell. If anything is going on in there, it cannot be seen from the railroad.

Farther west, the entire Naugatuck Valley appears denuded of industry. The ancient American Brass Company factory at Thomaston sits an empty shell. Everything inside the building has been sold and shipped to China, even the toilets in the restrooms. Dead FL9's sit on abandoned sidings. I don't know if this line has commuter trains, but it does not appear to (no stations).

It was hard on me to see this. My impressions were based on the east side of this valley. Maybe the west side was healthier.

Les

If you haven't seen it, this film shows a picture of what New England once was.

http://www.youtube.com/watch?v=P9gGu97lcbc

bml,

Thanks for the link. I hadn't seen that film before.

It was a wonderful commentary on what once was.

Les

Those kitchen shots don't seem right for a rail car. The camera is pretty far back in the shot at 15:40 and the cabinets on the wall are stocked wth jars and cans. Doesn't anything fall out when the train is in motion?

Those Dining car kitchen shots were done in the studio.

Backshophoss wrote:Those Dining car kitchen shots were done in the studio.

Not necessarily. A lot of publicity shots like that were done while stationary on a siding, using "passengers" from the Accounting Department.

The main problem with the ICC was inflexibility, much of it imposed by the Interstate Commerce Act of 1887, which the ICC and the railroads were required to follow. Between the IC Act and the Administrative Procedure Act it took so long to get any change made that by the time you got a ruling the circumstances had changed. Maine potatoes were just one example: potatoes, being an agricultural product, were unregulated when they moved by truck but not by rail. When the railroads sought to meet the truck rate, they had to publish the change in a tariff at least 30 days in advance of the proposed effective date, while a trucker could scribble some numbers with a stubby pencil on the back of an envelope and quote a rate on the spot, which would become effective immediately. Until 10 days before the proposed date anyone at all could protest the proposed change to the ICC, which then had 3 options, of which the most commonly used was to suspend the effectiveness of the rate change. Any lawyer or ICC practitioner worth his salt could keep the process stalled until the growing season was over, then repeat next year. (To give you an idea of how the agricultural exemption in the Act was stretched from the original intent of exempting truck movements from field to railhead, it was held that frozen french fries moving from Idaho to New York were exempt from regulation when moving by truck but not by rail.) Some idea of how long these proceedings could be dragged out may be gained from the fact that one of the "reforms" in the Transportation Act of 1958 stated that if the ICC did not render a decision within 9 months the change would go into effect automatically. The Act provided, however, that the railroad could "voluntarily" grant the ICC an extension of time if requested. One railroad attorney told me this simply meant that you'd get a call from the ICC requesting an extension, which you might as well interpret as "do you guys want to grant us an extension, or should we turn you down now?" Any normal business has the freedom to introduce a product, price it, and if it seems to be bombing, reduce the price or discontinue the product, none of which a railroad could do without going through the procedures outlined above. If ordinary businesses were subject to that sort of regulation, Ford would still be making the Edsel unless absolutely no one bought one for several years, and Coca-Cola would still be producing the "new" Coke. So, if Staggers had become effective in 1961 instead of 1981 things would have been very different for the railroads, because they would then have had the right to consolidate and abandon. They might still have made some dumb decisions, but they would not have had the force of law, and it would soon have become evident which railroads were being intelligently managed. As it was, management did not have the freedom to do any number of things they knew were necessary. This is not to suggest that we would still have all the rail lines that existed in 1960, because industry, especially in the Northeast, was shrinking, and the railroads would have shrunk along with it instead of years afterwards.

While I'm in agreement with much of what was brought out in the first three posts. I think it's worth noting that the highway carriers also underwent major changes, and faced some very serious challenges during the same time frame.

The regulatory framework which was set up for motor carriers in the mid-1930's was structured very much along the same lines as the railroads. Carriers' routes were usually linked to "points" (communities) along specific designated highways, and once a carrier had established authority there, it was very difficult for a potential competitor to be granted access. As with the railroads, competition was more intense at large, end-point cities, while shippers in smaller towns often had only one choice. The upside of this was that a fairly stable system of interchange, useful for small and infrequent shippers and consignees, developed, just as with the railroads.

Little by little, that system was undermined by several trends, Larger trucking lines developed as smaller carriers merged, and larger shipments gravitated to the] "irregular-route" / "specific-commodity" carriers which became more common as an answer to the strict entry/exit controls on "regular route" / "general commodity" authority.

Still later, beginning around 1965, a handful of dominant carriers such as Consolidated, Roadway and Yellow determined that long-haul service contributed far more to the bottom line than short hauls. And pressure arose to restructure service, sometimes so that fewer "breakbulk" or classification terminals survived, and only hauls which passed through those points were solicited.

I personally witnessed the results of one such mistake, when Philadelphia-based Jones Motor abandoned a stable Midwestern short-haul operation (the former Niles (Youngstown), Ohio-based Red Star (no relation to the surviving company in upstate New York). The firm always did a big business in Chicago, but with the diverse short-haul freight now gone, more truckloads were solicited, intensifying competition with the aforementioned specific-commodity carriers and stressing profit margins.

The company attempted to revive short-haul business a couple of years later, but the damage had been done, and I believe that the concentration of LTL shipments within the few dominant firms was the primary factor in the rash of trucking bankruptcies between 1976 and 1981.

I saw further examples of sharpening competitive pressure during a brief return to trucking in 2008-2009, most notably the delivery of truckload shipments of many small high-value items to package-carrier (UPS, DHL) centers, with the package carrier handling the local delivery.

On a positive note, I live adjacent to an NS mainline, and the increasing number of refrigerated trailers which pass "across the street" every day lead me to believe that a substantial portion of the merchandise, miscellaneous and perishable freight, the loss of which played such a large role in the collapse of the eastern trunk lines in the early Seventies, has found its way back onto the rails.

There is a looming shortage of drivers for the big rigs,the drivers that are now hired on chafe at being on the road for weeks at a time,
and want to be home more often,unless the freight is time senstive,the longer hauls wind up on cross country intermodel trains.
Time senstive freight will be hauled by team drivers(some cases husband/wife teams).
An independant owner/operator,under own authority(DOT###) has a hard time surviving out on the road,
most O/O's will lease on with a major fleet to get a somewhat steady income, there will be changes in the HOS rules and Medical rules
for drivers on the horizon and soon. Electronic HOS logs are now the norm for the major trucking fleets along with GPS tracking
on the tractors and trailers.
The Days of Smokey and the Bandit are long gone.

It is not unusal for the smaller LTL carriers to consolidate freight to Truckload lots for long haul movement by a Truckload carrier,
then at destination,broken into LTL loads at a different LTL carrier.