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[quote]QUOTE: Originally posted by jeaton Actually, I was trying to make a point about what can happen when the demand for the goods or services of a capital intensive business begin to outpace capacity. There is a tendency to think that open access would reduce rates because of added competition. It wouldn't necesarily be the case. I, in fact, think that if the American railroads went to the split infrastructure-operating entities, the result would be comparable to the British experience. For whatever reasons, they have not had enough money flowing into infrastructure maintenance. Underlining many of the suggestions on this thread is the idea that the railroads can save their way to prosperity. I think the cash requirements are too great for that to happen. I see three fundamental choices. 1. Increase taxpayer's money flowing to railroads. 2. Increase the share that trucks and other modes contribute to government maintained rights-of-way. (Results in increased charges for those modes and allows railroads to increase their rates on existing business). 3. Go home. Take your pick. [/quote] A couple of comments both in reference to the above and also Mark Hemphill's comments. 1. This needs to happen no matter what. Historically, although railroads have been private businesses they have been formed by government charter, aided by government right of way grants and the legal power of condemnation associated with the charters. Police powers for railroad police forces. Financial assistance has been provided by the government in various ways. Direct grants, loans and land grants have all been provided at various times. The quid pro quo for this has always been the common carrier obligation required of a rail carrier in interstate commerce. Some of these government programs methods need to be revived in a meaningful and focussed way. A way that doesn't unjustly enrich the railroads and their shareholders and yet provides necessary infrastructure relief. My sense of the Congress is that in our post 9/11 world transportation issues are beginning to receive more notice. Look at H.R. 876 the short line sponsored tax relief bill that garnered as many co-sponsors in the House as any other bill with material provisions in this Congress. 2. Increasing the share paid by truckers is unrealistic. Trucking has even thinner margins than the railroads. They would go bust trying to pay it. 3. This will result in gridlock and disasters. I have to respectfully disagree at least in part with Mark on the capability of short lines to wring some savings out of railroads previously operated by the Class 1s. If this wasn't possible many of the short lines that have been around for decades simply would no longer exist because they would have used up their infrastructure long ago. No doubt many short lines are using up infrastructure and not reinvesting adequately to preserve rail service in the long term. Those will cease to operate even with government assistance as their disinvestment causes customers to locate elsewhere or relocate. Short lines no longer have the major advantages in crew size and some of the more favorable labor conditions they have enjoyed in the past. Short lines still on average pay lower wages and fewer benefits than their larger brethren and have much fewer employees, short lines use older smaller and cheaper locomotives and draw their car supply from Class 1s and leasing markets that allow them to incur less cost than the Class 1s. All this adds up to a small margin which keeps most short lines viable. LC
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