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NATIONALIZATION OF THE RAILROADS
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[quote]QUOTE: <i>Originally posted by CSSHEGEWISCH</i> <br /><br />[quote]QUOTE: <i>Originally posted by futuremodal</i> <br /> The fact is, the railroads have chosen to remain proprietary closed access systems, and by default choose to be taxed in that vein. <br />[/quote] <br /> <br />So what's so bad about that. <br />[/quote] <br /> <br />Depends on your POV. If you're a captive shipper, it means higher transportation rates relative to non-captive shippers. If you're a U.S. exporter, it means you're paying higher costs to get your goods from point of origin to the nearest port, relative to what your foreign competitors are paying to move the same product the same distance. <br /> <br />If you're a Class I, it means you have to <i>average</i> 180% of revenues above variable costs to achieve revenue adequacy, and if your non-captive shippers only pay 108% above costs (similar to profit margins of transport modes who use public ROW's), then you have to charge your captive shippers 237% above costs to "break even", but of course no one in their right mind would want to remain a captive shipper, so as their plant comes to a replacement age they either move overseas or find a spot in the U.S. with some semblence of head to head rail competition, so eventually your pool of captive shippers shrinks and you're stuck with this expensive ROW that you can't sustain due to the loss of your "cream" customers who've left the country or your captured territory, and as this triggers the next big recession the federales are going to scapegoat you and either re-regulate or nationalize you with only minimal compensation. <br /> <br />Eventually, shippers will start to question why they are paying premiums for transportation while their overseas competitors are not. Since industries that ship by rail make up a larger portion of the tax base (and have more lobbying influence) than does the rail industry, it won't be long until something draconian is forced upon the Class I's, unless they pre-empt such actions by taking the necessary action themselves.
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