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[quote]QUOTE: Originally posted by leftlimp What I disagree with is the quickness to blame the railroads for not earning the cost of capital where the competition is subsidized and the customers are doing their best to usurp railroad revenues with BS ideas like "Open Access". I'll bet those big mines and mills wouldn't open their facilities for use by generic brands competing with them. Why should the railroads? I think all the "Open Access" critics need to go back to school and study basic economic theory again (if they hadn't already). Monopolistic behavior breeds inefficiencies/competitive behavior creates efficiencies, any Economics prof will tell you that regardles of their political affiliation. What the railroads are today are basically "micro-monopolies" that severely limit access to the rail lines to the discretion of the owner-operators. They will not let any freight move over their tracks unless it is by their own operating divisions in their own inefficient way, and no one is going to force them to do it better via competition. Thus, we either have (1. The freight moves to trucks or (2. The shipper throws in the towell and moves to China or invests in the production of something other than heavy bulk commodities. To suggest that an infrastructure company cannot charge a rail rate that will cover the cost of capital and leave some extra as profit is unproven, because it hasn't yet been done in the U.S. Whether there would need to be some "massaging" by government to make it work may be true, but it wouldn't have to consist of massive subsidies. Probably all that would be needed would be a legal caveat that recognizes railroad right of ways as public transportation corridors via proxy, which would eliminate property taxes and open the door to state and local discretionary taxpayer funding for selective infrastructure improvements that benefit all in that state or locality (e.g. bridges, overpasses/underpasses, transit needs, et al). The inherent efficiencies of rail transport (e.g. the ability to move large quantities of goods at speed) can overcome competition from subsidized highways (truckers can go at speed, but they can only move 100,000 lbs or so at a time) and waterways (they can move mass quantities, but at only 5 mph) if the rail owners allow the forces of competition to make them better. I would also disagree with Mark H. in his contention that open access would eliminate service to all but the largest shippers. Open access would allow trucking firms to establi***heir own rail operating companies, and there doesn't seem to be a problem for any small shipper to get multiple rate quotes from any of the trucking companies. Put two and two together and we get the efficiencies of rail travel via TOFC/COFC/bi-modal with the comprehensive customer service provided by the trucking companies. Isn't that what is happening now to a small degree (relative to what it could be) with current TOFC movements today? Don't all these truckloads and containerloads include cargo from shippers large and small? Unfortunately, because of the monopolistic behaviours of the railroads, TOFC is only a fraction of what it could be if only the trucking companies had autonomy to run their own TOFC trains their own way, instead of being subject to the traditional ultraconservative, unimaginative, exclusively limited offerings of the railroads TOFC "service" today. I know from personal experience that railroads will regularly turn down new service proposals from third party shippers, even if that service was accessing underutilized rail corridors, simpy because there is no competitive motive to do so. If on the other hand, the prevailing thought is that since railroads can't even cover the costs of their capital today therefore an infrastructure company wouldn't either, that in itself begs the question: Are railroads really the most efficient way to move bulk commodities at speed? If so (and all the transportation theory would state it as such), is there really a need to do so in a freight world that is more and more focussed on individualized truckload/containerload movements at speed OR cost sensitive bulk movements at 5 mph, rather than bulk movements at speed? If not, then there's no point in having railroads in the first place. We can just allow longer combination trailers and/or eliminate GVW standards for trucks in place of an average weight per axle standard on our highways to improve efficiency of highway movements. We can allow coal companies to switch to more efficient slurry pipelines to move their product from the mine to the power plant. We can authorize the Corps of Engineers to deepen and expand our waterways (after all, we can justify expending taxpayer dollars to do so since the waterways are "open access" to all the public!) to allow even greater efficiencies in moving cost-sensitive (e.g. not particularly time sensitive) cargos from the inland to our deep water ports. Indeed, who really needs a "land bridge" for containerized ocean cargo if ships can simply go direct to any port West Coast, East Coast, or Gulf Coast (once the Panama Canal is deepened for the post-Panamax ships) and lay anchor within a highway haul of their destination markets? Until we can eliminate the monopolistic characteristics present in the rail industry today and let them become open access in some form with an equalized playing field with highways and waterways (in terms of government support of some kind), we really don't have enough real world data to answer that question. [/quote] Limp- It is obvious to me that you are a theorist and not a practitioner who has ever operated a railroad. There are numerous failures in your theory. In reality, it simply doesn't work the way you theorize it does. This would doom you (or anyone following your theory) to failure. 1. Your concept that railroads seriously try to limit traffic moving on their lines is completely inaccurate. Most railroads welcome any traffic they can move that earns them revenue adequate to justify its carriage. With truck and barge competition there is precious little of that anyhow. There can be other limiting factors such as car availability or infrastructure limitations. There isn't a lot more traffic ready to ru***o the railroads that will earn a higher return to justify splitting away the infrastructure. There are far more costs added by creating a new bureacracy than are saved. Proving that an infrastructure company can't charge a rate capable of bringing a return of investment has already been done. If the integrated railroad system cannot support the infrastructure, the parts can't charge less. As Mark Hemphill has correctly stated railroads are already too lean. There isn't any surplus to cut now. 2. Your proposed "transportation corridors" provide nothing more than railroads already have the right to do under existing law except perhaps providing funding which as I already suggested is the missing ingredient. 3. The only thing that having a multiplicity of operating companies will do is ensure that the safety of everyone involved will be lessened by people cutting corners. Look at all the truckers on the public highways regularly caught in all sorts of violations from overweight to hazmat to drugs or alcohol. Who will step into the shoes of the State Police on the rails?? That is another major problem you haven't considered. There is a cost. Who will bear it? The infrastructure company? Who will dispatch trains? The infrastructure conmpany? Who will ensure that the infrastructure company doesn't play favorites? Perhaps all these questions have answers, but many add costs that are not now in the system. Customers are already trying to cut costs. Who will pay the additional costs. Sounds like RailTrack part 2. 4. Lets face it. You can call railroads monopolies all you want but on any given day a truck or barge can take most of what moves on the rails. That to me is not a monopoly except in the extremely limited circumstances of bottleneck captive customers. There is no need for open access now or later. It is a theory that doesn't work and no amount of rehashing or saying it will work makes it so. LC
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