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Coexistence Between Passenger Rail and Freight: Peaceful, or Otherwise

Posted by George Hamlin
on Saturday, July 16, 2022

Much of the recent news about transportation has focused on the negative side of the ledger, including service cancellations and disruptions; staffing difficulties; long wait times for travelers, etc.  To be sure, it is likely that at least some of this is due to ramifications of the Covid pandemic;  a “normal” economy, including its transportation component, seems to lie at a yet unknown point in the future.

In the midst of this, we have also recently been exposed to the specter that a modest addition to Amtrak service along the Gulf Coast will disrupt freight traffic in the area significantly. 

Notwithstanding the current difficulties described in the opening paragraph, it’s useful to step back and take a broader view of the freight train/passenger train priority conflict.

A year before Amtrak was formed, in 1970, the Class 1 railroads produced 764,809 million ton-miles of freight, according to the Department of Transportation’s Bureau of Transportation Statistics (https://www.bts.gov/content/class-i-railroad-system-mileage-and-ton-miles-freight-1960-1965-1970-2015).  Twenty years later, in 1990, this had increased by 35%, to 1,033,969 million ton-miles.

By 2015, however, the 1,691,004 million freight ton-miles recorded were 128% more than the 1970 figure, more than double.  In short, at least part of the stress on the current U.S. rail system could be described as trying to put 23 pounds in the proverbial 10-pound bag; something has to be changed to make this work.

By the way, although I won’t get into detail about it here, capacity, in terms of System miles, has declined during the same 45 year time period, from 196,479 to 93,628, roughly a 50% reduction.   Yes, I’m aware that a lot of this resulted from the pruning of economically unproductive lines, particularly at the formation of Conrail; on the plus side, the line to service the Powder River basin was built during these times, and more recently, the BNSF added capacity to its Abo Canyon choke point.

However, overall rail capacity has declined during the same period that traffic has more than doubled.  I can’t imagine that the airlines and truckers would not have acquired significantly more capacity had the same traffic increase occurred in those industries.  In short, it certainly looks like what the rail industry needed during this period was more investment in its fixed plant; maybe not on a one-for-one basis versus the traffic growth, but considerably greater than zero, as opposed to the absolute decline that occurred.

That dirty word “investment” brings up another current issue: the almighty operating ratio.  In reality, this is a simple piece of mathematics: expenses divided by revenues and woe to those that can’t get down to the   mid-double digits.  In reality, there actually are two different ways that a low operating ratio can be achieved. The obvious one is to decrease expenses, while maintaining the present traffic and revenues.  The other is to increase traffic, and therefore, revenues.  Either, or both in combination, can be used to achieve the desired result. 

Unfortunately,  increasing traffic and revenues generally takes longer than reducing expenses, and also likely brings forth the need for that nasty word investment in the process.  In TRAINS’ recent special issue, Norfolk Southern at 40, the article “From lightweight to Juggernaut”, about the transformation of Norfolk Southern’s intermodal business, describes the then-head of Intermodal, Mike McClellan’s efforts to persuade the automobile company BMW to utilize a new service (page 73): “McClellan tried to interest BMW in trying intermodal for a number of years before the concept took root”. Yes, virtuous efforts that produce long-term gains don’t always reduce the operating ratio in the short term.

So, who gets the priority?  A passenger train that has run on a freight railroad since 1971, or relatively new freight business that the sales group has just drummed up?  In reality, this will continue to be a problem until one of two things happen: either the passenger train goes away, making its present claim to time on trackage a moot point, or investment will be needed in additional fixed plant to restore system fluidity.

This will be neither quick nor cheap, but done right, sound investment could produce revenues that exceed the expense, and even the operating ratio bean-counters will be pleased, eventually.  For that matter, an example of a sound investment that continues to be effective can be found in Ron Flanary’s article “Rat Hole Revisited”, also in the NS special issue.  I suspect that the current NS continues to benefit significantly from the money (wait for it…) invested by the Southern Railway in this portion of back in the 1960s.

Photo: NS 211, with a boxcar for the recently-launched LCL service, at Boyce, Virginia, July 16, 2022.  Photo by George W. Hamlin

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