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Railroads Struggle to Deliver Coal to Utilities

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[quote]QUOTE: Originally posted by MichaelSol [quote]QUOTE: Originally posted by TomDiehl Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ... [/quote] The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors. The "downturn" came in the early 1980s. U.S. Ton-Miles of Freight (Millions), Class I Railroads 1960........572,309 1970...... 764,809 1980...... 918,958 1985...... 876,984 [/quote] And the point I'm trying to make is that these railroad downturns are NOT the result of lessened demand for rail service, rather it is the lack of decent rail service itself that lost business for the railroads. Demand for rail service is an implicit constant, even when explicit demand seemingly falls. Demand for transportation services is more of a constant than other sectors. I have to remind some folks that rail service covers a wide array of commodities, so when you have a drop in demand for, say steel, at the same time you probably have an increase in demand for aggregates used to make concrete or aluminum to replace steel in auto parts. So even though demand for rail shipments of steel might fall, at the same time demand for shipping the alternate products increases. Or when demand for US made autos goes down, that usually ends up with more foriegn autos being brought in, so demand for transportation of autos is still fully engaged. Only when we have an actual drop in macro economic activity do you see a drop in demand for transportation services. Recessions have been relatively few and far between in our economy. And when rail business falls during periods of growing economic activity, that should tell you something. Keeping this in context of the topic title, we all know demand for delivery of coal has been going up, yet because the railroads would not or could not meet this demand, they had a loss of business. It's all about rail service shortcomings, not lessened demand for rail service.
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