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[quote]QUOTE: Originally posted by PNWRMNM Future, On what basis do you disagree with my contention, which is based on CURE data, that noncaptive coal from PRB is already moving at RVC ratios very little over 100%? Their data shows all noncaptive traffic at an average of 103%. Coal rates per ton are 40-50% of rates for other commodities, again CURE data. I see no data to support your conclusion. For DME what RVC other western carriers are getting for ALL coal is irrelevant. All the coal DME proposes to haul will be noncaptive, by definition. They will loose their shirt hauling noncaptive coal. Mac [/quote] Well, without convincing either BNSF or UP to open their books for us, we can only surmise what kind of revenue they are getting from PRB coal hauls. We do know that value-added products command a higher rate than non-value added products. Of all the CURE data, only coal can be assumed to be a non-value added product. It would be interesting if they could separate their unit grain train data from the all inclusive category of "Farm Products" to see if the unit coal rates are that much different. Also, coal is for the most part exclusively unit train stuff, while farm products, chemicals, lumber and wood, and pulp paper may be mostly carload commodities, and anything that has to be switched will command a higher rate to cover those costs. What we can both agree on is that DM&E's coal traffic will be in unit train form, meaning costs will be lower than for carload traffic, so they can correspondingly have lower per ton rates for coal than for that other traffic. And since demand for PRB coal is outstripping the ability of the railroads to deliver, it is my hunch that the railroads will not waste this opportunity to maximize pricing power over those PRB loads. Anything can happen in the near future that will prove either you or myself right regarding the prospect of DM&E making a viable commercial go of this project. I'll still go with DM&E on this one if for no other reason than coal's long term demand prospects remain high.
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