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Railroads Struggle to Deliver Coal to Utilities

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[quote]QUOTE: Originally posted by Murphy Siding [quote]QUOTE: Originally posted by futuremodal [quote]QUOTE: Originally posted by Murphy Siding [quote]QUOTE: Originally posted by Murphy Siding Hey Dave- any chance you could make a quick list of the under-utilized or dormant rail lines that will be really busy 10 years from now? 20 years from now? That way, the railroads would have an easier time planning some of this stuff?[;)][:-,] [/quote] [quote]QUOTE: Originally posted by futuremodal So your asking me to predict what rail management will stumble into 10 or 20 years from now? We don't even know what the outcome of pending legislation in Congress will be. Where will new coal fired plants be located? Or will anti-coal politicians sweep into office in the next few elections? [/quote] Well, you kind of just proved my point there buckwheat.[;)] You're saying that someone with your economic pedigree can't predict the future, because of some uncertainties? [;)] Come on- you chide the railroads, after the fact, for not doing it.[:-,] Wouldn't you think the view was just a little bit *fuzzier* in the crystal ball 20-25 years ago? And they had to do it without your intellectual insight.[:p] [/quote] I think YOU missed the point there spanky. Railroads have emasculated themselves with the belief that certain lines were "excess capacity", yet they have no crystal ball in determining that those lines actually were excess in the railroad's long term planning (which goes out on a limb in assuming they do engage in long term planning!). Why would you lop off body parts if you did not know for sure that you absolutely would not need them anymore? The cost of keeping an asset is much less than the cost of having to rebuild such an asset from scratch. Again, I ask you, do you know of any other industry that engages in asset reduction as a part of their long term business strategy? Or do I have to explain "asset" to you? [/quote] The answer to your last question , is every industry disposes of assets that they don't forsee being of any use in the future, based on the information they have at the present. Which relates to the statement above. You keep harping on the railroads for asset reduction that they didn't forsee being of any use in the future, based on the information that had at the time. Even an economics major should be able to see the drawbacks of not having a crystal ball. It's just too easy to judge the railroads on a woulda/shoulda/coulda basis, based on 29 years of hindsight. Note that you should also give them heck for not investing in Microsoft too.[;)] [/quote] Well, there's a "tell" in all this: The railroads publicly claimed they had excess capacity which needed to be lopped off.... BUT ....the reality of it was they only wanted to reduce capacity to increase pricing power. Thus, there was no "excess capacity" as in too many assets relative to their customer base, because even back then just about any rail shipper was desirous of more rail options, not less. Rather, the railroads in reality lusted after a greater share of their customers' wealth, and the only way to get their hands on it was to reduce the number of assets serving their customers, thus optimizing pricing selectivity. Such can only happen under monopoly situations, because under competitive situations other service providers would simply take up the slack left by the self-emasculators. Again I will reiterate: THERE WAS NO EXCESS CAPACITY, ONLY UNDERACHIEVEMENT RELATIVE TO THE RAIL SHIPPER.
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