SHIPPERS’ REVENGE -- REREGULATION

[jsanchez]

The CEI syndrome is killing a lot of industries not just railroads in the USA, (manufacturing, banking, insurance, high tech) I think companies that don't move folks up the ranks because they have a mandatory college degree policy for management jobs are doomed to failure. If you have someone sharp, knows the in and outs, what works and doesn't, move this person up so he is more of an asset. I think it is no accident that some of the smartest folks in business had no degrees. Michael Dell, Bil Gates, Dave Thomas for example, I think if these guys had MBA's they probably would never have been as successfull. I don't know what happened to the colleges in the USA, but I think they need to drop the political correctness and touch feely stuff and get back to teaching the basics in business schools. Railroads definitely should provide management opportunities for those who actualy spent time running the system, that knowledge is far more useful than most things taught at 4 year universities. Maybe they should offer more online management/business study courses for employees. This woul help eliminate the division between workers and management which I don't see as a positive. I think it it really cripples UP,NS, CSX and other railroads from being as competive with trucking. Just my thought, I'm not in the Railroad business yet, but I know far too much about CEI than I care to admit.

[jsanchez]

The CEI syndrome is killing a lot of industries not just railroads in the USA, (manufacturing, banking, insurance, high tech) I think companies that don't move folks up the ranks because they have a mandatory college degree policy for management jobs are doomed to failure. If you have someone sharp, knows the in and outs, what works and doesn't, move this person up so he is more of an asset. I think it is no accident that some of the smartest folks in business had no degrees. Michael Dell, Bil Gates, Dave Thomas for example, I think if these guys had MBA's they probably would never have been as successfull. I don't know what happened to the colleges in the USA, but I think they need to drop the political correctness and touch feely stuff and get back to teaching the basics in business schools. Railroads definitely should provide management opportunities for those who actualy spent time running the system, that knowledge is far more useful than most things taught at 4 year universities. Maybe they should offer more online management/business study courses for employees. This woul help eliminate the division between workers and management which I don't see as a positive. I think it it really cripples UP,NS, CSX and other railroads from being as competive with trucking. Just my thought, I'm not in the Railroad business yet, but I know far too much about CEI than I care to admit.

[kevarc]

? A a reciever of 3-5 trainsloads of coal a week, IF we had service from 2 railroads we would save 4-8 $/ton. And you tell me we are not getting screwed?

[kevarc]

? A a reciever of 3-5 trainsloads of coal a week, IF we had service from 2 railroads we would save 4-8 $/ton. And you tell me we are not getting screwed?

[CSSHEGEWISCH]

Reregulation is an attempt for small or captive shippers to get a cheaper rate subsidized by the larger shippers. Under the ICC, rates were not strictly tied to costs and there was a fair amount of cross-subsidization involved, including freight rates covering passenger losses. Certain commodities such as produce were lost to unregulated competitors since railroad rates couldn't be adjusted to compete with the lower truck rates. Rates also tended to be based on value-of-service so commodities such as coal, ore, cement, etc had low rates while manufactured products, which were more susceptible to truck competition had the higher rates. Rate adjustment was tied to a slow bureaucratic process which led to a lot of lost traffic. Prime example was the Big John case involving SR which took years of appeals for SR to lower rates.

[CSSHEGEWISCH]

Reregulation is an attempt for small or captive shippers to get a cheaper rate subsidized by the larger shippers. Under the ICC, rates were not strictly tied to costs and there was a fair amount of cross-subsidization involved, including freight rates covering passenger losses. Certain commodities such as produce were lost to unregulated competitors since railroad rates couldn't be adjusted to compete with the lower truck rates. Rates also tended to be based on value-of-service so commodities such as coal, ore, cement, etc had low rates while manufactured products, which were more susceptible to truck competition had the higher rates. Rate adjustment was tied to a slow bureaucratic process which led to a lot of lost traffic. Prime example was the Big John case involving SR which took years of appeals for SR to lower rates.

[cabforward]

this topic is stimulating a lot of good discussion and points to argue for months..

most industries have been handled so badly by so many ignorant, inflexible people that finding someone to clean up the mess for a single company is futile.. (ex: airlines, steel producers, r.rs., telecommunications)

one point i can make is, r.rs. have been going bankrupt since 'day 1'.. the rock island has been in receivership so often, they had an office in the icc dept.. the mp was just as bad..

any r.r. that isn't here anymore either closed and simply disappeared or was bought out just before or just after it collapsed..

think about it: nyc, prr, pc, new haven, boston-maine, e-l, l-v.. how many can you name without taking a breath?

nowadays, it is more likely that a r.r. will be bought out, as there is always someone who thinks they can do it better, at least for 3-5 years.. hence, the short line operators.. they can't stand alone, but a combination of 'shorts' can benefit by purchases in volume and maint, repairs, etc. by a group that handles thousands of miles for many r.rs..

what can't be done individually can work on the 'economy of scale'.. the more work handled decreases the cost of each task..

i wi***here had been 'short operators' when the r.rs. i named above were still here..

[cabforward]

this topic is stimulating a lot of good discussion and points to argue for months..

most industries have been handled so badly by so many ignorant, inflexible people that finding someone to clean up the mess for a single company is futile.. (ex: airlines, steel producers, r.rs., telecommunications)

one point i can make is, r.rs. have been going bankrupt since 'day 1'.. the rock island has been in receivership so often, they had an office in the icc dept.. the mp was just as bad..

any r.r. that isn't here anymore either closed and simply disappeared or was bought out just before or just after it collapsed..

think about it: nyc, prr, pc, new haven, boston-maine, e-l, l-v.. how many can you name without taking a breath?

nowadays, it is more likely that a r.r. will be bought out, as there is always someone who thinks they can do it better, at least for 3-5 years.. hence, the short line operators.. they can't stand alone, but a combination of 'shorts' can benefit by purchases in volume and maint, repairs, etc. by a group that handles thousands of miles for many r.rs..

what can't be done individually can work on the 'economy of scale'.. the more work handled decreases the cost of each task..

i wi***here had been 'short operators' when the r.rs. i named above were still here..

[Anonymous]

Now I do not wi***o say that every manager is a CEI, and back in my days with the CNW there were a few real good bosses (although for some reason they did not last long; probably spoke up too often), but the popularity of the comic strip "Dilbert" shows that managers, on the average, have no idea how things operate where the work is actually done, UNLESS they came up through the ranks. Those that rose through the ranks were usually sharp, unless they went into management because they could not cut it in the field. Quoted from Zardoz
I totally agree Zardoz. One reason that they hire CEIs is that they cannot tell the RR to **** off, and go back to their craft. They are yes men/women, and have to do what they are told or else hit the road. I have met a couple of 22 year old chicks that wouldn't know a frog from a wet fart and they are the ones running the show. I have no problem doing EXACTLY what these CEIs say. I do it to the letter! When things start going to hell, I just sit back and know that I did what I was told by somebody that has a better education than me. I then watch their yard become constipated and the sweat build on their brow. I go home and forget about it, while they explain to the supt. why their world is totally screwed up. That's why they make the big bucks.....oh wait, they make less than most of us. Well at least they have their title.
Ken

[Anonymous]

Now I do not wi***o say that every manager is a CEI, and back in my days with the CNW there were a few real good bosses (although for some reason they did not last long; probably spoke up too often), but the popularity of the comic strip "Dilbert" shows that managers, on the average, have no idea how things operate where the work is actually done, UNLESS they came up through the ranks. Those that rose through the ranks were usually sharp, unless they went into management because they could not cut it in the field. Quoted from Zardoz
I totally agree Zardoz. One reason that they hire CEIs is that they cannot tell the RR to **** off, and go back to their craft. They are yes men/women, and have to do what they are told or else hit the road. I have met a couple of 22 year old chicks that wouldn't know a frog from a wet fart and they are the ones running the show. I have no problem doing EXACTLY what these CEIs say. I do it to the letter! When things start going to hell, I just sit back and know that I did what I was told by somebody that has a better education than me. I then watch their yard become constipated and the sweat build on their brow. I go home and forget about it, while they explain to the supt. why their world is totally screwed up. That's why they make the big bucks.....oh wait, they make less than most of us. Well at least they have their title.
Ken

[zardoz]

What I do not understand is that in the 'old days' (pre-1960), did not the railraods make a decent profit?

I do not remember many railroads going bankrupt or merging back then. And at that time, trian crews had five members, track maintenance was much more labor-intensive, there were agents and/or clerks at every station 24hrs/day, switch tenders, tower operators, more repair-intensive locomotives and the shop personnel to maintain them, etc. And the railroads still made money. AND were regulated!

Now we have two-person train crews, welded rail, low-labor-intensive track maintenance equipment, the agents and clerks are gone, switch tenders are gone, tower operators are gone, locomotives are much newer (less repairs), better engineered (more efficient, therefore less of them needed), and the railroads claim they're not making money and it's labor's fault!

For example:
The CNW used to charge Wisconsin Electric $0.01/ton/mile back in 1990 for a coal train from Wyoming to Pleasant Prarie. That does not sound like much, but at 15,000 tons going 1,000 miles that comes to $150,000 in revenue for ONE coal train. I would guess that now (13 years later) the price is even higher. And the power plant gets at least one train per day. Hard to believe it cost nearly that much (figuring in track wear, fuel, train crews, etc) to run that train. Where does all that revenue go??

IMHO, the railroads have too many college-educated idiots (CEI) running things. Most any railroader that actually works for a living (as opposed to management-types that attend meetings for a living) could probably tell you many tales of stupid things managent has done or said, and that is only the things that are apparent on the ground level. I shudder to think of the brainstorms the various levels of management come up with.

Now I do not wi***o say that every manager is a CEI, and back in my days with the CNW there were a few real good bosses (although for some reason they did not last long; probably spoke up too often), but the popularity of the comic strip "Dilbert" shows that managers, on the average, have no idea how things operate where the work is actually done, UNLESS they came up through the ranks. Those that rose through the ranks were usually sharp, unless they went into management because they could not cut it in the field.

Whew, so much for my tirade on management. And to any of you that happen to be managers or bosses, hopefuly this rant does not apply to you. Have a nice day :)

[zardoz]

What I do not understand is that in the 'old days' (pre-1960), did not the railraods make a decent profit?

I do not remember many railroads going bankrupt or merging back then. And at that time, trian crews had five members, track maintenance was much more labor-intensive, there were agents and/or clerks at every station 24hrs/day, switch tenders, tower operators, more repair-intensive locomotives and the shop personnel to maintain them, etc. And the railroads still made money. AND were regulated!

Now we have two-person train crews, welded rail, low-labor-intensive track maintenance equipment, the agents and clerks are gone, switch tenders are gone, tower operators are gone, locomotives are much newer (less repairs), better engineered (more efficient, therefore less of them needed), and the railroads claim they're not making money and it's labor's fault!

For example:
The CNW used to charge Wisconsin Electric $0.01/ton/mile back in 1990 for a coal train from Wyoming to Pleasant Prarie. That does not sound like much, but at 15,000 tons going 1,000 miles that comes to $150,000 in revenue for ONE coal train. I would guess that now (13 years later) the price is even higher. And the power plant gets at least one train per day. Hard to believe it cost nearly that much (figuring in track wear, fuel, train crews, etc) to run that train. Where does all that revenue go??

IMHO, the railroads have too many college-educated idiots (CEI) running things. Most any railroader that actually works for a living (as opposed to management-types that attend meetings for a living) could probably tell you many tales of stupid things managent has done or said, and that is only the things that are apparent on the ground level. I shudder to think of the brainstorms the various levels of management come up with.

Now I do not wi***o say that every manager is a CEI, and back in my days with the CNW there were a few real good bosses (although for some reason they did not last long; probably spoke up too often), but the popularity of the comic strip "Dilbert" shows that managers, on the average, have no idea how things operate where the work is actually done, UNLESS they came up through the ranks. Those that rose through the ranks were usually sharp, unless they went into management because they could not cut it in the field.

Whew, so much for my tirade on management. And to any of you that happen to be managers or bosses, hopefuly this rant does not apply to you. Have a nice day :)

[JoeKoh]

QUOTE: Originally posted by skeets

AAAAARRRRGGGHHH! I hit something that posted the above thing; obviously, it wasn't finished. As I was saying, on my road, an engineer works with a single man on the ground. The road crews run across three or more former divisions. The new diesels are more efficient. About the only way for the rr's to cut anything else, is to start cutting wages. The problem with that is, to ask a man to give up ANY personal life for the railroad, and also to do it for less money, the result will be difficulty finding people to work the crazy railroad culture for chump change.

and the gov't is trying to take away ot pay for anything over 40hrs/week forget it.[:(!]
stay safe
joe

[JoeKoh]

QUOTE: Originally posted by skeets

AAAAARRRRGGGHHH! I hit something that posted the above thing; obviously, it wasn't finished. As I was saying, on my road, an engineer works with a single man on the ground. The road crews run across three or more former divisions. The new diesels are more efficient. About the only way for the rr's to cut anything else, is to start cutting wages. The problem with that is, to ask a man to give up ANY personal life for the railroad, and also to do it for less money, the result will be difficulty finding people to work the crazy railroad culture for chump change.

and the gov't is trying to take away ot pay for anything over 40hrs/week forget it.[:(!]
stay safe
joe

[Anonymous]

AAAAARRRRGGGHHH! I hit something that posted the above thing; obviously, it wasn't finished. As I was saying, on my road, an engineer works with a single man on the ground. The road crews run across three or more former divisions. The new diesels are more efficient. About the only way for the rr's to cut anything else, is to start cutting wages. The problem with that is, to ask a man to give up ANY personal life for the railroad, and also to do it for less money, the result will be difficulty finding people to work the crazy railroad culture for chump change.

[Anonymous]

AAAAARRRRGGGHHH! I hit something that posted the above thing; obviously, it wasn't finished. As I was saying, on my road, an engineer works with a single man on the ground. The road crews run across three or more former divisions. The new diesels are more efficient. About the only way for the rr's to cut anything else, is to start cutting wages. The problem with that is, to ask a man to give up ANY personal life for the railroad, and also to do it for less money, the result will be difficulty finding people to work the crazy railroad culture for chump change.

[Anonymous]

How many more jobs can be eliminated? The yards are at skeleton levels with remote crews. On my road, the engineers work with a

[Anonymous]

How many more jobs can be eliminated? The yards are at skeleton levels with remote crews. On my road, the engineers work with a

[croteaudd]

In TRAINS, October 2003, page 17, Shippers seek reregulation; Class I railroads appalled, a dilemma is presented. Whatever the true merits to the opposing sides of the controversy, I find the situation rather gratifying, as in I told people so. Neither railroads nor shippers are immune from the self-destructive nature of monetary systems, and if both are truly at their practical limits, something WILL give. Sadly, labor will probably end up the scapegoat. But, all three self-interest sides could have their cake and eat it too if operating practices were different and time was fully exploited. Since that is unlikely to come about, labor would be wise to start planning their defensive courses of actions now to avoid more jobs being lost on a large scale.

[croteaudd]

In TRAINS, October 2003, page 17, Shippers seek reregulation; Class I railroads appalled, a dilemma is presented. Whatever the true merits to the opposing sides of the controversy, I find the situation rather gratifying, as in I told people so. Neither railroads nor shippers are immune from the self-destructive nature of monetary systems, and if both are truly at their practical limits, something WILL give. Sadly, labor will probably end up the scapegoat. But, all three self-interest sides could have their cake and eat it too if operating practices were different and time was fully exploited. Since that is unlikely to come about, labor would be wise to start planning their defensive courses of actions now to avoid more jobs being lost on a large scale.