OAT : Open Access Thread

[Murphy Siding]

Here it is, for better or worse.

On various threads, Future Modal has interjected his open access "thoughts" into the mix. Several (OK-dozens of us [:D]) have had discussions with Dave about various issues on the subject. It's somewhat hard for me to follow this ongoing,evolving discussion on several different threads at once. It can also get distracting for me and many others.

Can we consolidate all this discussion to this one thread? I'm not 100% in disagreement with FM on the subject (99% maybe[:)]),but I do think we all could learn something by calmly discussing it. That being said, if this isn't your bag' or gets your blood pressure up too much, please pass on to the next thread. At the same time, can we try to keep on topic?

I'll try to control my sarcastic tounge. At the same time, I would ask Dave to control his "avalanche" of words. Like Joe Friday used to say-"just the facts". If Dave dumps 1000 words at a time, the whole thing goes astray. I'm an analyzer, tending to ask questions, and thinking over the answers. Don't overload my senses please.

So........ Future Modal: In the grand scheme of things -How would this open access system work, when the Future Model Open Access Company (FMOAC) owns the rails,and the Murphy Southern Railroad ( MSR) wants to run trains over it?

Please note: [:)] means I'm just kidding! Please don't take anything I say too seriously. I'm not an expert on anything. In fact, a fair amount of the time, I don't know what I'm talking about LOL.

Post was edited to make it more user friendly. Murphy Siding

Post was re-edited to clear up questions about whether the subject was railroads,or supermodels [B)][:)]

[ericsp]

Switch the M and F and you would have the Memphis, TN to Oakland, CA trailers (MFOAT).

Another thread hijacked.

[Murphy Siding]

Do you think the MFOAT would want to ship on the FMOAT ?

[nanaimo73]

Murphy,
Up here in Canada CP is spending hundreds of millions to increase capacity on their western main. They refused to go ahead with it until they got assurances from the federal Government that there would be no open access. Rail companies are not going to spend money on their lines and have someone else use them.
I think there is a safety factor as well. Railroads do not want to share their lines with "no-frills" railroads which could have poorly trained crews and unsafe equipment.
Can you imagine a new railroad operating a Spokane-Los Angeles Trailers (SPLAT) which could run into something. Splat !

[Murphy Siding]

I wonder about shared liabilities too. Someone must have some ideas on the issue. Enquiring minds want to know. Anyone have some ideas? Anyone.....Anyone?

[Murphy Siding]

nanaimo73: Did you post something, and then delete it? I read the post,then put some burgers on the grill. When I came back it was gone. I presume you meant for it to be a humorous comment, because I did get a good laugh out of it. [^]

Future Modal: I hope you're not staying away from this thread because you may think I'm setting you up. Far from that, I'm looking forward to a good discussion on a subject that seems to be pretty well thought in your view? So......what do you think?

[Murphy Siding]

Not to worry! I tend to not to take life too seriously. I was more worried about halucinations I guess.[:)]. Can you think of any good reason why Future Model would avoid this thread like the plague? Now I'll have to go back to the Shoe-fly bridge post to check that out![:O]

[Anonymous]

Murphy,

Since this is your thread, can I suggest you edit the topic title to the MSOAT? Thanks.

In the meantime, I am hoping someone with subcription access to the Journal of Transport Economics and Policy can provide us some of the more salient conclusions of John Bitzan's rail competition study. I have my doubts about that study taking on the more evolved aspects of the open access debate that have found their way into this forum, such as:

1. Cost "equalization" of ROW construction and maintenance costs among all the transport modes. Most rail studies seem to lump all rail associated costs into the "cost of capital" category, making it difficult to ascertain what percentage is soley due to track construction and maintenance.

2. Somewhat related - how the use of property tax exemptions and/or maintenance tax credits for the infrastructure would affect the entire cost structure of railroads.

3. The apportioned costs of track usage on a speed x axle weight basis. From what I've found, there are studies that analyze speed affects on track wear, and studies that analyze how axle weights affect track wear, but not a combination study. For an open access analysis, the hypothesis that needs to be tested is the aspect of maximizing slot utilization vs maximizing load factor, and how both can be sythesized into the most optimal operation.

4. I'm still waiting for the evidence that the power industry is behind the open access conspiracy. Here all this time I thought it was comprehensively relegated to captive rail shippers.

5. Speaking of conspiracies, isn't it logical to assume that if the railroad industry had a bunch of studies that showed open access won't work, they would want to publicize these studies rather than keeping them secret?

[Anonymous]

QUOTE: Originally posted by nanaimo73

Murphy,
Up here in Canada CP is spending hundreds of millions to increase capacity on their western main. They refused to go ahead with it until they got assurances from the federal Government that there would be no open access. Rail companies are not going to spend money on their lines and have someone else use them.

It was the uncertainty related to a potential change in costing formulas that was more likely the cause of the alleged delay in CP's line "upgrades", not any assurances regarding a no open access guarantee that aided in CP's project start. Uncertainty regading any future operation changes will cause corporations to be very conservative when it come to capital expansion projects. Since the Canadian government themselves had no idea how they would even implement such a concept as open access, it stands to reason they have decided to wait a while until the concept is more detailed.

CP's expenditures are mostly focused on the western mainlines to "increase" capacity to Vancouver, but it is curious that they project only 4 additional trains per day with this multi-million dollar project. Logic says they would have been better off if other rail transporters had participated in this project to share the costs. Maybe then they could have spent more money more judiciously to get more than a measly 4 train per day increase. I seriously doubt that the revenues from only 4 additional trains per day is going to improve CP's ability to recover their cost of capital, especially if these 4 extra trains per day are low margin intermodal. It wouldn't suprise me if CP's cost of capital recovery actually gets worse after this.

[daveklepper]

4 trains a day is only a beginning.

[Murphy Siding]

Fair enough Future Modal. I changed the topic title and added a little to the explanation.

Basically, I see this as 3 seperate parts:

1) If open access is even neccesary-a debate with no end in sight.

2)The numbers required to crunch,scrutinize,debate ect...-another endless debate,because none of us have the numbers.

3) The basic theory ( Oh Lordy! did I say that?[:O]) of how an open access rail system would work-complete with 1001 questions,answers and opinions!

It's part 3 that I'm asking about. Thanks

[Murphy Siding]

Boy do I feel dumb!-In a super model sort of way.[:I]. Thanks for the heads up. I went back and fixed all the modal / model mistakes so that future readers will think you're picking on me / rather than that I are a dummy!![}:)]

[nanaimo73]

What do you want ?
Are you concerned with South Dakota's farmers ?
Did Dakota Southern get the trackage rights they wanted to Sioux City Iowa, and will this mean they are going to re-open the line to Chamberlain, or Kadoka ? Are DME and DMVW now allowed to interchange in Aberdeen ? Do you want DAIR to expand further ? How far do you want to go with trains in the Greater Dakota Co-Properity Sphere ?

[GMS-AU]

Costings or pricing seems to be a stumbling block. What to host companies charge now for detours due to maintenance or weather problems by tenant companies. Could open access be restricted to short lines or class threes ( I'm not sure of the guidelines for this class ) in the hope they will chase smaller shippers thus getting more freight on rail and off the road. I suppose finally what is stopping a non rail company from building a track and letting anyone who is willing to pay use it if it reduces costs due to better alignment etc.

G M Simpson

[jeaton]

In a small response to Part 3, may I offer an area of concern. Splitting infrastructure and operating into separate companies poses a big managerial problem in dealing with the conflict generated by the issue of the how and when to perform track maintenance. As you might realize, the track fixing folks would like to be able to shut down a piece of railroad for as long as necessary to get the job done, as that can be the most cost effective way to get the job done. The operating types say "Are you nuts? What are we supposed to do with are trains, run them out through the cornfields?" If these guys work for the same place, the solution is simple. Their mutual boss says shut up and figure out a compromise that is in the best overall interest of the company.

Just to show the potential, on the other post I cited Fred Frailey's September Trains article on the problems on the joint BNSF/UP Orin Sub on the Powder River Basin Line.
The deal is the BNSF is to do the maintanance and the costs are split. Both companies have an extremely vested interested in keeping that line in top shape and both send people out on frequent joint inspection trips.

As you might expect, coal dust flies off the loads, gets down in the ballast and raises hell with drainage. With a four year drought, no precipitation, no problem. Get this year's heavy spring rains and snows and you wind up with a railroad better suited for swamp buggy races than coal trains. "Omaha to Fort Worth, we've got a problem!" The article says that *** Davidson went to see Matt Rose to personally express his extreme displeasure and attorneys have been put on alert.

Now, you can bet that this piece of railroad is going to be fixed as quick as possible, as both parties are hurt badly by the problem. Here is an interesting twist. The Norfolk Southern gets prevention by ordering its coal mine customers to configure the load trim and coat the coal in a manner to minimize dust. That is a cost born by the mines. The same could be done on the Powder River trains, but the BNSF and UP compete for that business. Which railroad is going to be first to tell a shipper that he is to increase his cost to do business with us?

Now tell me what happens when a track problem occurs and the infrastructure company and the operating company has conflicting goals? You can get things spelled out in the contract, but any place I ever worked at that had contracts with suppliers and customers also had a good sized contract management staff. Ka-Ching!

Jay Eaton

[Junctionfan]

Open access is kind of happening between the class 1s. For example, CN and CP share a line between Port Colborne and Fort Erie just because it is easier; NS is sharing the lines between Michigan and Chicago if I'm not mistaken, CN and CP have really partenered up in B.C with directional traffic..........

I believe that Open Acess is in the process of evolution of trackage rights and agreements with other class 1s-railroads that trust other railroads. Certain regionals and shortlines with a reputation that is favoured by the class 1s such as Rail America and Ontario Northland, get to have more access to their lines such as the GEXR which gets to run on the Halton Subdivision and interchanges directly at CN MacMillan Yard near Brampton if I'm not mistaken. CN wouldn't allow that if they weren't certain the crews and equipment were safe enough to operate on their system. That is the key for the class 1s to consider open access.

[Murphy Siding]

nanimo72: that just about killed me!LOL One of my other diversions is reading a lot of history books. That only a very few people in the country would understand the reference to the Greater Dakota Co-Prosperity Sphere made it even funnier.[bow]


To your questions:

I think the Dakota Southern is pretty much dead in the water right now. The line to Chamberlain is overgrown in weeds. From Chamberlain to Kadoka, it looks like the prairie is trying to reclaim it.

DME and DMVW may be getting interchange through Aberdeen as part of BNSF buying the S.D. tracks

Dair is doing quite well on their own

[jeaton]

Andrew

You are correct that there are many places where either by regulatory order or contract agreement an owning road has granted operating rights to another railroad. In the case of regulatory orders, that usually has been to maintain or increase competition. I think where joint usage agreement has developed without a regulatory order, operating efficiency has more often been the driving force. In some cases, the large railroads have given up low density lines, often branches, on the premise that the new little guy can make a buck while the big carrier can put its resources to more profitable business.

These deals are quite controled by the principals, and on that, are different than the proposal to contemplated by open access where anybody that wants to can get in.

Jay

[Anonymous]

Jay - If indeed the coal dust was the primary cause of the line deterioration, then in the open access concept of the regulated infrastructure, that problem is borne to the mines by the governing body that regulates the infrastructure. Since coating the coal is cheaper than using covered hoppers, it becomes the solution prima facia, and it falls to the entity most able to comply. If the problems were with the rolling stock, then the cost of the solution would be borne on all the transporters. That's one of the advantages of a split organization, you are less likely to get the "I don't care how you do it, just get it done" attitude that becomes apparent in vertically stacked corporations, e.g. there is better open accountability. That way you avoid Enronizing the problems.

[Anonymous]

GMS-AU,

Thanks for the contribution. I am hoping this thread gets more responses from the Aussies, since their open access system is more predicated to freight than the European systems, thus would provide more basis for analyzing an OE affect on NA.

[TheS.P.caboose]

Very good Southern Pacific symbol ericsp. On the Union Pacific it becomes a Foreign Line train from Monroe, LA to Atchison KS train.

Sorry guys I couldn't resist.

[Murphy Siding]

FM: If a situation occured that caused problems where it was not clear if the source of the problem was equipment or ROW,how would it be determined who pays for the repairs? Say, oh, I don't know , Maybe a train derails at a switch, and it's not clear if it was from a defect in the switch or in the wheel. If neither side wants to take responsibility,what happens next-short of a bunch lawsuits?

[jeaton]

Let me get this straight. Is it the regulatory agency or the regulated monopoly infrastructure company that orders the shipper to spend the money on preventing the dusting?

In this case, might it not be much simpler if the UP and BNSF told the mines that a rebate will be paid to cover the added cost of sealing the coal load?

In the latter case the entity that benefits pays the entity that does the work. Optionally, the railroads do the work themselves. Kind of a common business practise.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

FM: If a situation occured that caused problems where it was not clear if the source of the problem was equipment or ROW,how would it be determined who pays for the repairs? Say, oh, I don't know , Maybe a train derails at a switch, and it's not clear if it was from a defect in the switch or in the wheel. If neither side wants to take responsibility,what happens next-short of a bunch lawsuits?

I think most industrial accidents can be pin pointed as to primary cause by investigators. I don't believe that situation would be any different from any other similar situation.

[jeaton]

The above suggest another problem and I don't think this is implausable.

Suppose an operating company is in a market where because of modal competion, margins are adequate, but very thin. Further, let's assume that there is no other business in that market or for good reasons, other operators have a lock on more profitable business. Now let us suppose that the infrastructure company has a valid need to raise their rates fully consistant with the regulations and approved by the regulators. The operating company finds that their low rates will no longer cover their costs and raising rates will loose the business.

Oh, I guess that's just life in the competitive world. No problem. Right?

Jay

[Anonymous]

QUOTE: Originally posted by jeaton

Let me get this straight. Is it the regulatory agency or the regulated monopoly infrastructure company that orders the shipper to spend the money on preventing the dusting?

In this case, might it not be much simpler if the UP and BNSF told the mines that a rebate will be paid to cover the added cost of sealing the coal load?

In the latter case the entity that benefits pays the entity that does the work. Optionally, the railroads do the work themselves. Kind of a common business practise.

The infrastructure company is responsible (with regulatory oversight to prevent deference) for the accounting of maintenance costs to keep the lines in proper functionality. So far I have focussed on weight per axle and speed of consists as the prime causal factors for wear and tear, but as this example shows certain commodities may also contribute to factors of deterioration which should be accounted for in the fee being charged. In this case the infrastructure company would charge more for open top hoppers/gondolas of coal to compensate for an increased need for reballasting, the transporters then either choose to switch to enclosed hoppers to bypass this extra charge, or pass on the cost of this charge to the mine owners. Since the regulatory agency would enforce whatever action is deemed necessary to ameliorate this problem, if the cost is ultimately passed on to the mine owners they will have no choice. The costs of amelioration would eventually be passed on to the energy consumer.

Speaking of coal dust off unit trains, I would think this would be an issue that the EPA would want to look at! Are there any environmental degradations that result from coal dust?

[jeaton]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

FM: If a situation occured that caused problems where it was not clear if the source of the problem was equipment or ROW,how would it be determined who pays for the repairs? Say, oh, I don't know , Maybe a train derails at a switch, and it's not clear if it was from a defect in the switch or in the wheel. If neither side wants to take responsibility,what happens next-short of a bunch lawsuits?

I think most industrial accidents can be pin pointed as to primary cause by investigators. I don't believe that situation would be any different from any other similar situation.

And there are never any arguments and lawyers never get involved.

[Anonymous]

QUOTE: Originally posted by jeaton

The above suggest another problem and I don't think this is implausable.

Suppose an operating company is in a market where because of modal competion, margins are adequate, but very thin. Further, let's assume that there is no other business in that market or for good reasons, other operators have a lock on more profitable business. Now let us suppose that the infrastructure company has a valid need to raise their rates fully consistant with the regulations and approved by the regulators. The operating company finds that their low rates will no longer cover their costs and raising rates will loose the business.

Oh, I guess that's just life in the competitive world. No problem. Right?

Jay

A lot depends on the magnitude of the rate increase. Are you talking 50% or 100% increase, or 1 -5 % increase? Take a look at the fuel surcharges imposed by all modes these last few years. Has the fuel surcharge caused any loss of business for any of the modes? Probably not. Same would apply to nominal rate increases put up by an infrastructure company, if small enough it will be absorbed by the various players in the supply chain.

[edblysard]

"I think most industrial accidents can be pin pointed as to primary cause by investigators. I don't believe that situation would be any different from any other similar situation."

You have never been in a train wreck, nor had a good hard look close up at a derailment.
About the only thing most investigators ever agree on is the fact that the train is one the ground.
As for the coal dust issue, the the EPA dosnt worry about coal dust, after all, the coal just came out of the ground...they do worry about water run off polution.
And who wants to bet the mines, when hit with the cost of the dust abatement, will either demand railroads find a way to cover the hoppers, or spray the coal with a sealent.
If the cost is returned to the mines, they will just pass the cost on to the consumer in higher price for the coal, which will raise your electric rates, which will...vicious circle here!

Ed

[Murphy Siding]

FM: re: "I don't believe that situation would be any different from any other similar situation". Unfortunately,I'd say you're correct. The problem is, the other similar situations tend to lead to multiple lawsuits. How would this undertaking be any different than in another industry?