Could have the SP survived without UP

[ericsp]

QUOTE: Originally posted by futuremodal

Hmmm. The Prince Plan called for seven or eight systems? And what do we have now? Seven systems! So much for Constitutional issues!

The question of constitutionality does not involve the amount of class one railroads. Ther is nowhere in the Constitution that says, "There must be at least eight class one railroads operating in the United States of America". The constituionality question probably refers to the government forcing the companies to merge.

[Anonymous]

QUOTE: Originally posted by ericsp

QUOTE: Originally posted by futuremodal

Hmmm. The Prince Plan called for seven or eight systems? And what do we have now? Seven systems! So much for Constitutional issues!

The question of constitutionality does not involve the amount of class one railroads. Ther is nowhere in the Constitution that says, "There must be at least eight class one railroads operating in the United States of America". The constituionality question probably refers to the government forcing the companies to merge.

Yes, Eric, I was commenting on the irony of it all. The nation's public servants during the early 20th century apparently had a base understanding of the need to balance the tendencies toward either economic socialism or economic fascism as they relate to the evolution of economic sectors into oligarchies, although it seems their default tendency was toward economic socialism. (Quick, what's the difference between economic socialism and economic fascism? Under economic socialism the peons control the oligarchy, while under economic fascism the hefes control the oligarchy.)

Apparently the ICC's collective subconscience understood that as larger businesses swallow up smaller businesses the control of a particular economic sector would be under the control of fewer and fewer players, which ends up destroying the competitive economy if there evolves a difficulting in new market entrants. They tried to come up with solutions outside the forces of the market economy to lay the groundwork for economic balance, but such efforts did not pass constitutional muster. If they had been patient (and this assumes there would be a continuity of this prime directive over the decades up to now) they could have waited until meger requests were brought before them and used their power of denial to get the desired effect from the railroad companies.

Unfortunately, this prime directive was not set in stone, and thus regulators of differing viewpoints on what an economy should look like allowed marriages which resulted in de facto monopolistic and duopolistic actions on certain regions of the nation.

SP would have been an excellent property to divvy up among BN, UP, and SF. But apparently Linda Morgan decided that "two's company, three's a crowd" and left us in the West with this UP/BNSF duopoly, which isn't to say a duopoly is as bad as a monopoly, but it ain't nealy as beneficial for this region as a three way competition would have been.

[daveklepper]

The irony today is the Bush wants democracy to succeed in Iraq while pushing a transportation policy the funds the very terrorism that prevents it.

[Anonymous]

QUOTE: Originally posted by daveklepper

The irony today is the Bush wants democracy to succeed in Iraq while pushing a transportation policy the funds the very terrorism that prevents it.

Dave, I think I know where you're going with this, but I don't want to put words in your mouth. Are you ostensibly talking about petroleum, CAFE standards, the consumers' desire for SUV's, and/or the fact that the federal government won't "sufficiently" fund the national rail passenger service used by 3/10th of 1% of the nation?

If you're game for such a discussion, let's start a new thread on the subject!

[bobwilcox]

One problem with the Prince Plan was that it was voluntary. It was basically set up for strong roads to take over weak roads. The PRR, NYC, UP, SP, etc. were not interested in carrying the MP, DRGW, WP, NKP, Milw, Erie, etc.

[kenneo]

A bit of Irony(?) here? SCL made a bid for the SP about 5 years prior to the ATSF. Something about BFB being as hard to get along with as the SCL brass were and they simply couldn't agree even on the necessity of a glass to hold the drinking water.

Very sad. This would have been a much better combination than any of the others that came along.

[CSSHEGEWISCH]

I may have mentioned this elsewhere but it's an idea that bears repeating. John G. Kneiling once proposed a merger of Eastern weaklings: EL + D&H + B&M. They would restrict their service to intermodal only and drop service to most of the intermediate points on their lines, most of which were quite inconsequential as traffic sources anyway. Their weaknesses would turn into strengths and they would have been way ahead of the other Eastern roads as intermodal routes.

[MP173]

Are you sure it is Portsmouth, NH?

I would think it is Portsmouth, Va. but I could be wrong.

ed

[kenneo]

E-L, DH, BM into Virginia?

I am not familure with Portsmouth NH., but Hampton Roads is DEEP water naturally.

[MP173]

Mark:

The NS runs trains 234,235, and 236 between Norfolk and CHicago. I just this week heard a 233 which would mean two round trips trains/day between points.

I am not sure of the routings for the Norfolk - Chicago trains, but I seem to recall that one does move up thru the old NW via Roanoke, Portsmouth, Oh, and Columbus before turning left at Bellevue.

I cannot image the double stack train going all the way to Atlanta, perhaps Knoxville, Tn unless there are some height restrictions.

I do know this....NS is running the heck out of intermodal trains to and from Chicago. There seems to be second sections on the Jacksonville trains just about daily. Would that be due to the issues with west coast ports and congestion? Can those ships go thru the Panama Canal?

BTW...where is John Kneiling these days? I sure did enjoy his commentary back in the day.

ed

[daveklepper]

I knew John Kneiling from his days of running the Joint RailfanTrip Committee of the New York area, and he did organize some fine trips, including one on the Central of New Jersey behind a camelback ten wheeler. Some people felt he was difficult to get along with, but I doubt he would have gotten the cooperation of the railroads (even the Pennsy) and transit systems to do unusual things if that was the case. For a young beginning teen-age railfan it was a privilege to be treated like an adult, like everyone else, by an important person, and I valued his friendship accordingly. One famous trip that I missed was down the West Side Freight Line, now used by Amtrak but then freight only, still electrified with third rail, to St, John's Park Freight Terminal, with a regular New York Central dining car fully staffed and with complete lunch meal service.
I think fans got to ride behind a variety of electrics, including the tri-power battery-third-rail-oil engine (distilate or diesel?). My friend Herman Rinke was on it and gave a glowing report.

[Anonymous]

QUOTE: Originally posted by M.W. Hemphill



Economies of scale apply. The railroads are very aware of the cost to take a container through the canal on a small and inefficient ship, and land it on the East Coast (or bring it the other way around the world through the Suez Canal, which is also size-limited). There's a time penalty for the all-water move, too. So the railroads price against the water price, and the ships price against the rail price. Each has their own capacity constraint which prohibits unlimited pricing freedom. However, as enlarging the Panama Canal isn't currently in anyone's reality, and it's an all-or-nothing project (widening 10% of it is worthless), but the railroads can add to their capacity incrementally and reap the results at once, the railroads in this case have the power. I've read a number of articles written for the shipping-consumer audience that describe how this or that shipper realized economies by getting rid of that rotten railroad by relocating their distribution center to Charleston, etc., but these articles are suspiciously innocent of any numbers that would prove that this solution is anything other than a unique solution. What we do see in the steamship container business are (1) railroad container traffic growing like mad, (2) a rapid growth in railroad revenues and profit margins on containers, and (3) more and more enthusiasm on Wall Street for railroad investment, both in the stock, and for the railroad into its plant. What a turnaround from just 10 years ago!

But can it be said that what is good for the railroads is necessarily good for the economy? Granted, most of the folks who participate on this forum would seemingly gladly watch the remaining Class I's get rich while other industries become constrained, but I guess I'm one of the few who are concerned about the ability of U.S. businesses to prosper and compete on a global scale.

For some perspective, ask yourselves this: What represents a greater segment of the nation's GDP? The railroad industry, or the industries dependent on the railroad industry? The answer is obvious, and therein lies the problem with this policy of allowing railroads to condense capacity to buffer profit margins as a way to take care of the inherent problem of low ROI's. Yeah, now the railroads have pricing power, but at the expense of the rest of the economy. It would have been better if the feds had actually addressed the cost of capital problem directly, rather than allowing much of the nation's infrastructure to be torn up. Let the public take up much of the expense of infrastructure maintenance, and let the railroads remain in sufficient numbers to provide de facto competition among themselves. In other words, the lower profit margins from having to be truly competitive can be offset by a reduction in the railroads' share of the cost of maintaining the infrastructure. Then the buinesses that utilize rail services could keep a leg up on the global competition.

[Anonymous]

Short and sweet, No.

[CSSHEGEWISCH]

As I've pointed out earlier, public investment in infrastructure maintenance isn't going to happen in the current political climate, if ever. With that being the situation, maintenance of the right-of-way is always going to be part of the rate base. Also, shippers don't have a right to a lower rate if the existing rate is reasonable and compensatory.

[bobwilcox]

QUOTE: Originally posted by CSSHEGEWISCH

Also, shippers don't have a right to a lower rate if the existing rate is reasonable and compensatory.

This idea of anyones "right" to a certain rate has been dead for a quarter century this fall. That was a very long time ago. You only have a right to work out the best deal you can with the railroad. "Tell the Don it was nothing personal it was just business."

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

As I've pointed out earlier, public investment in infrastructure maintenance isn't going to happen in the current political climate, if ever. With that being the situation, maintenance of the right-of-way is always going to be part of the rate base.

Public investment in private freight railroad infrastructure is already happening or has happened in Washington, South Dakota, California, North Carolina, New York, and elsewhere. Also, various Class I railroads have begun lobbying DC for public funds for rail infrastructure improvements, ostensibly to "take trucks off our highways". Given the regulatory restrictions on allowing larger and longer trucks, states, localities,and regional authorities are constantly exploring public investment in private rail lines as a way to enhance economic fluidity.

Since it is absolutely established that such public investment is taking place in the current political climate, the only question remaining is if rail industry hacks can con the public servants into providing such aid while retaining their monopolistic control over the traffic that would utilize the improved lines.

[daveklepper]

I think there is a valid point there. The Long Beach Los Angeles improvements are used by both UP and BNSF. Should CSX be required to let NS in on the improvements the State of Virginia is funding for the RF&P line? Maybe not, because Virginia is also funding some improvements on the Manassa route as well. The USA public funding of rail improvements is not a single path, and we can hopefully rely on legislators to insure the right private-public balance of interest and control is held. I think each situation is a different case, and a blanket solution might do more harm than good.

[CSSHEGEWISCH]

I'm not going to hold my breath waiting for the funding for the various proposed Chicago improvements to come through. There's a big difference between federal and state financing.

I also notice that futuremodal is using his pitch for public financing as a justification for that confiscation of private property known as open access.

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

I'm not going to hold my breath waiting for the funding for the various proposed Chicago improvements to come through. There's a big difference between federal and state financing.

I also notice that futuremodal is using his pitch for public financing as a justification for that confiscation of private property known as open access.

CSSHEGEWISCH, answer me this: Was the breakup of the Standard Oil Trust confiscation of private property? Was the breakup of AT&T confiscation of private property? If so, how is it that the aggregate stock values soared afterward? However you look at it, both actions were legal and proper, resulted in increased property holdings, and occurred for the benefit of the nation as a whole.

Try putting your nation first for a change.

It continues to amaze me how railroaders can complain ad nauseum about how unfair it is that highways and waterways are subsidized, how railroads can't get a decent return on investment, how their capital costs such up every revenue dollar, and yet when offered the solution that would radically reduce their capital outlays, double rails share of intercity freight, and result in capacity expansions via public funds they act like a bunch of lemmings.

[CSSHEGEWISCH]

Neither of the cases stated by futuremodal was a confiscation since both organizations had their day in court as guaranteed by the 5th Amendment. It should also be noted that the Standard Oil Company antitrust suit took an incredibly long time to be prosecuted.

A look at trucking and commercial aviation also shows the instability that can come with so-called open access. New start airlines and trucking firms come and go with amazing regularity and while we are familiar with passengers getting stranded when an airline suddenly ceases operation, the same also happens with freight when trucking firms fold. Rates may be lower but the financial health of the carriers suffers as a result.

As I've mentioned elsewhere, open access does not guarantee better service. Cherry-picking is a real possibility and the customers who felt that they were poorly served under the existing system might not get better service or a lower rate.

[MP173]

I see no justification for the government taking private property in the case of the railroads. Standard Oil may have been deemed a monopoly, surely one cannot consider 2005's railroads as monopolies.

What is the total percentage of freight handled by railroads today?

that should answer your question as to the monopolistic nature of the industry (or the lack of it).

ed

[daveklepper]

Open access might provide better service for some customers at the expense of far worse or none at all for others.

[Anonymous]

QUOTE: Originally posted by daveklepper

Open access might provide better service for some customers at the expense of far worse or none at all for others.

I think it would be wise to study the service dynamics of open access systems in Australia and Europe to get a better picture of how customer service would be affected by open access systems.

BTW, what happened to the "Transportation Policy and Terrorism" thread? Did Bergie delete it?

[CSSHEGEWISCH]

As has been mentioned elsewhere, what works (apparently) in Europe and Australia may not work in the United States since the economic and political dynamics and constraints are not the same. A certain amount of cherry-picking has occured in Australia and several carriers that started operations under open access have since suspended operations. In Europe, the systems were starting on a base of a single nationalized rail system (quite unlike the United States) and ran from there.