'If I did and said some of the things Hunter said and did, I’d be in jail.'
http://trn.trains.com/news/news-wire/2020/01/06-cps-creel-sees-mergers-as-inevitable-but-delayed-by-precision-scheduled-railroading
Brian Schmidt, Editor, Classic Trains magazine
I certainly agree with him on the need for building "bridges" to Ottawa and Washington. About more mergers.. i don't know.. it seems to me the railroads work very well together now without the need for mergers.. and another round of mergers would almost certainly come at the cost of complex interchange agreements and cumbersome restrictions to preserve some vestige of competition. Why not work closer together without merging? That would also permit some flexibility that would not be possible with only a couple or three large carriers and would be less likely to invite more regulatory oversight.
Call me a cynic, but instead of mergers I could see flat-out offers of sale by "whoever" owns "whatever" once the short-sighted-next-quarter fanatics think they've milked as much money out of their "whatevers" that they can, and aren't likely to get any more, or any more than they're getting right now.
Happened to the company I used to work for. One day a new red-hot gee-whiz CEO took over; laid-off, cut-back, and streamlined the company to maximize profits, not to make the company stronger, but to make it an attractive take-over target for others. It worked. The company was sold, the owners made a bundle, he took his "golden parachute," and was on his merry way.
Which is why even though I never took my job and paycheck for granted, and gave it 100% every day and didn't mind doing so, I've never been a "rah-rah" company guy. It's a company, not a family.
"Hey mister, wanna buy Norfolk-Southern?"
Creel sure worships at the altar of EHH.
Lithonia Operator Creel sure worships at the altar of EHH.
Hunter Harrison, "Saint or Sinner?"
Like every other controversial man, it probably depends on who you talk to.
I did find Mr. Creel's remark "Hunter might be in jail..." interesting. I wonder over what? Depending on who checks in on this topic, I'm sure we'll find out.
Ulrich I certainly agree with him on the need for building "bridges" to Ottawa and Washington. About more mergers.. i don't know.. it seems to me the railroads work very well together now without the need for mergers.. and another round of mergers would almost certainly come at the cost of complex interchange agreements and cumbersome restrictions to preserve some vestige of competition. Why not work closer together without merging? That would also permit some flexibility that would not be possible with only a couple or three large carriers and would be less likely to invite more regulatory oversight.
While I'll never buy into the PSR thing, I do think Mr. Creel has a point when it comes to the almost-inevitablity of mergers. It's just bound to happen sooner or later. But, more importantly, I hope it's the "right" combinations that take place.
What will happen once the first domino falls - say CP as the smallest of the Big 6 tries to buy NS because it is the next lowest capitalized of the Big 6 - the others will all join in and you will have a carving up of the two eastern US railroads amongst the other 4 of the Big 6 plus KCS.
Why?
Because Canada will never let either one of their railroads be acquired by a US railroad, so there will always be a CN and a CP.
But the two western railroads are the biggest sharks in the ocean in terms of resources, so they will swim in to get their fill and will always be there as UP and BNSF.
NS and CSX will be carved up by the STB amongst those four, in the same manner that Conrail was split between NS and CSX a generation ago.
KCS will get some small portion or itself be split up or turned in to a shared assets line of some sort between CP and CN.
One cloudy and cracked crystal ball.
Well, a merger would certainly take some pressure off of the need to be competitive, not that there's much competition out there now in the rail industry. 10 or 20 carriers would be much better... more competition..more choice for the consumer.. smaller more nimble companies that are easier to manage, with fewer layers of management. Competition is the cornerstone of capitalism.. take that away and you're left with an unwieldy utility with no get up and go and no incentive to get better.
Kgbw49--- Your analysis is right on.. no cracked and cloudy crystal ball, it's seems very clear to me. I think it unfolds and ends up just as you say.
Brian Schmidt 'If I did and said some of the things Hunter said and did, I’d be in jail.'
Yep.
During the 2007 CN strike there came about a very strange situation, the international UTU leadership declared the strike illegal, and went into court WITH CN against the Canadian union leaders.
Harrison had somehow managed to "win over" certain important people in the UTU.
You can imagine how well this went over with the Canadian membership. The UTU ended up being decertified here, and we are now Teamsters.
This article gives a pretty good summary. Also of note, Frank Wilner now writes for Railway Age, never mentioning his own role in the 2007 charade.
https://thetyee.ca/News/2007/02/22/RailStrike/
And while they are not illegal, Harrison's obscene nicknames for Canadian crews are still well known among the workforce here.
Greetings from Alberta
-an Articulate Malcontent
Is the key statement that nobody wants them in their backyard?
Would be nice if someone could explain exactly how mergers would create capacity/improve efficiencies. Even economies of scale are subject to the law of diminishing returns beyond a certain size. All of the major systems now interchange equipment easily enough... most even have run through agreements that eliminate the need for swapping power.. As it is now many if not most shippers really have only one option when it comes to rail... further consolidation would create an "its our way or the highway" type of scenario for most shippers..
Ulrich Would be nice if someone could explain exactly how mergers would create capacity/improve efficiencies. Even economies of scale are subject to the law of diminishing returns beyond a certain size. All of the major systems now interchange equipment easily enough... most even have run through agreements that eliminate the need for swapping power.. As it is now many if not most shippers really have only one option when it comes to rail... further consolidation would create an "its our way or the highway" type of scenario for most shippers..
I would think mergers between the western U.S. class 1's and the eastern class 1's would go a long way toward eliminating the Chicago bottleneck because the resulting railroads would be truly transcontinental and could find alternative ways to route traffic.
Doubtful. All the best trackage comes through Chicago. Especially going east from St. Louis, it's not so good.
charlie hebdo Doubtful. All the best trackage comes through Chicago. Especially going east from St. Louis, it's not so good.
True, but a with few ties and some ballast many of those lines would probably be more than up to the task.
Given those upgraded routes, the next step would involve thinking past Chicago for traffic that has no need to be in Chicago.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
All of which can be accomplished without mergers.. its not as if alternatives to routing through Chicago magically appear...the tracks are already there with or without mergers.
tree68 charlie hebdo Doubtful. All the best trackage comes through Chicago. Especially going east from St. Louis, it's not so good. True, but a with few ties and some ballast many of those lines would probably be more than up to the task. Given those upgraded routes, the next step would involve thinking past Chicago for traffic that has no need to be in Chicago.
Have you seen some of those lines? A lot more than a few ties and some ballast would-be needed to bring up to standards. The industry is hardly in an expansionist mode, closer to a contracting one.
charlie hebdoHave you seen some of those lines? A lot more than a few ties and some ballast would-be needed to bring up to standards.
It's not like we're talking all new construction.
Re Chicago: Cue the discussion of the Great Lakes Basin Railroad.
rrnut282Re Chicago: Cue the discussion of the Great Lakes Basin Railroad.
Forgetaboutit!
Never too old to have a happy childhood!
Ulrich All of the major systems now interchange equipment easily enough...
Fred Frailey blogged that this was not so. The Class1s have no priority in making transfers to other RRs in one of his Chicago blogs. The western RRs made Chicago the interchange point to get the longest possible haul. In another blog he pointed out how NS's Kansas City line would be an obvious alternative to Chicago, but a western RR would have to have some stake in it. IMHO Transcontental mergers are long overdue.
I don't value NS management highly for several reasons, and underutilization of the KC interchange point is certainly one of them.
Sure, utilization of KC reduces UP's and BNCF's mileage, but it also reduces their own costs. So all NS has to do, equitibly for both UP and CXS is to adjust the mileage spllt determination is such a way that NS continues to benefit, but a bit less from the split, and UP and BNSF also benefit as far as their bottom line. I'll bet BNSF's savvy management has tried to get this idea through the rigid heads at NS already!
Perhaps Oltmann or n01xxx or Jeff could give us more accurate info on run through and other interchanges in Chicago.
BNSF has worked out intermodal haulage agreements with CSX for, first Atlanta many years ago, and more recently North Baltimore in Ohio.
With both of those routes and locations, with reasonable drays they are able to serve many a significant number of locations in the south and in eastern Michigan, Ohio, and the Ohio River Valley with intermodal service,
http://www.bnsf.com/ship-with-bnsf/maps-and-shipping-locations/pdf/small-intermodal-map.pdf
It is my understanding that they have built up over the years to several trains per day to and from Atlanta. I am not sure how much traffic yet is going to and from the North Baltimore facility given it is a fairly recent agreement.
kgbw49 BNSF has worked out intermodal haulage agreements with CSX for, first Atlanta many years ago, and more recently North Baltimore in Ohio. modal-map.pdf It is my understanding that they have built up over the years to several trains per day to and from Atlanta. I am not sure how much traffic yet is going to and from the North Baltimore facility given it is a fairly recent agreement.
modal-map.pdf
Yes BNSF haulage trains on CSX Birmingham - Atlanta area locations are about 5 trains each way per day. Even though BNSF operates a lot of their IM trains with DPU have never observed one BHM <> ATL. Instead they operate with 3 or 4 locos on the front only. Often observed 4th on line maintaining MAS on A&WP sub. At slower speeds often only 3 units on line.
tree68 charlie hebdo Have you seen some of those lines? A lot more than a few ties and some ballast would-be needed to bring up to standards. Well, I was being somewhat facetious. The point is, those lines exist, and if a railroad saw value in bringing them back up to snuff, they could do so... It's not like we're talking all new construction.
charlie hebdo Have you seen some of those lines? A lot more than a few ties and some ballast would-be needed to bring up to standards.
Well, I was being somewhat facetious. The point is, those lines exist, and if a railroad saw value in bringing them back up to snuff, they could do so...
The only eastbound lines left out of St. Louis are the NS old Wabash line to Detroit, and the CSX former PRR to New York. The only line that could possibly be revived, is the recently abandoned CSX, former B&O line to Washington.
The NYC and NKP lines have been gone for decades, and the land is either in private hands, or turned into hiking trails.
The NS (SOU) and fragments of the L&N (now Evansville & Western) remain, but those ultimately proceed southbound after crossing Illinois, and aren't true eastbound routes.
So barring a major investment in rebuilding, the St. Louis gateway is a non-starter, right?
charlie hebdo So barring a major investment in rebuilding, the St. Louis gateway is a non-starter, right?
Sounds that way.
Sante Fe to North Baltimore from Kansas City via the B&O east of Chicago (using the old names) is two main track all the way, with, of course, all the hurdles of at-grade crossings on the southwest and south sides of the Chicago metro area.
The Wabash east of Kansas City to Detroit is all single track (bypassing St. Louis to the north, by the way). Train density will determine transit speed, of course, but it would seem to suggest that the two main track route would be faster, even with having to transit a part of Chicago.
if one looks at the BNSF Intermodal Map, probably the next thing they could do is extend their CSX haulage agreements to maybe Chambersburg, PA in the north and Charlotte, NC in the south.
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