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Trouble in open access paradise?
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<P>FM</P> <P><EM>I notice you make no mention of relative freight rates. You seem to infer that trucking is less costly than using rail to move bulk commodities. With petrol prices that hover around $6 US equivalent, British truckers are paying twice the cost of fuel as US truckers. Meanwhile, much of the British railway network is electrified, so there is another advantage of British rail over US rail networks<STRONG>.</STRONG></EM></P> <P>No, much of the British system is NOT electrified. Try again. </P> <P> <EM>What you seem to be missing is that there is a greater cost margin to move a container by truck in Britian than to do the same by truck in the US compared to the respective rail offerings. Those greater differentials represent a larger piece of the pie for revenue sharing with rail service providers than we have in the US. Yet, intermodal is continuing to grow on US railroads, so somehow, in spite of the relative cost disadvantages US railroads have vs over the road truckers, they're still getting the natural shift from road to rail, because the trucking companies will make more money if the ship their trailers and containers by rail than by over the road. The US railroads are getting a share of that savings, and everyone wins.</EM></P> <P>Possibly because the distances in the US are greater than they are within the United Kingdom? That bit hasn't registered has it obviously. If you count transhipment then there will be a big swing back to the lorry, even with the "greater cost margin". Therefore in many cases it is cheaper by road and within the logisitics industry there are greater margins than shifting your container onto the railway. That is not univeraslly true of course because as you point out there a number of instances where the reverse is true. So say From Southampton to the north of England where the traffic is containers/ swapbodiesn and where EWS and Freightliner offer a service. Say 10 trains per day. Now that route uses 3 main lines which carry rather more passengers and greater revenue than say 25 containers per train = 250 containers And as the majority of the population of England alone lives in the South East and the major container ports are only 50-odd miles away it doesn't really add; although there is one flow from Thamesport from North London. </P> <P><EM>Yet, your country is so saturated with passenger trains that there is no room for freight, even with the higher profit potential?</EM></P> <P>Where is the higher profit potential? Where? Bulk Commodities where there is intramodal (i.e. more than one operator) competition had seen rates fall to pretty low levels and as a result they have very small margins. Indeed, a lot of bulk freight projects have govt help in the form of Track Access grants or help to build the requisite infrastructure as otherwise it would go by road. Again the centres of production are few, we import a lot in this country being mainly service based and the centres of consumption are in US terms relatively close together. So there is little scope to make mega bucks. This can be seen in the margins of the railfreight operators and why they haven't all been floated on the stockmarket. And why CN is still trying to sell its share in EWS and no one is buying. Btw the most profitable railway in the Uk is an entirely passenger one which charges very very high fares. Many operators are now paying premiums (in the case of GNER £1.2bn over 10 years) for the right to operate. EWS made a profit of around £50m on a t/over of £500m + if memory serves me. Which one, by definition is more profitable? </P> <P> <EM> Then it all gets back to the choices I layed out for the Europeans - either go back to nationalization and mostly passenger trains, or stick to your guns and force passengers and freight to pay fully allocated costs of providing rail services under privatization with intramodal competition - at full allocation passenger numbers will drop as they shift to road in reaction to fare increases, while freight will have enough margin left over to stick with rails.</EM></P> <P>The choice which you have so condescendingly layed out has been rejected by the voters so ask yourself why? This aint Hicksville, blah blah where the nearest town is over 1000miles away to spread the gene pool. The entire point is that to avoid congestion in a very urban country which the UK, Belgium, Denmark, Netherland(s) are (to name a few) priority is given to the passenger train. Therefore the social and economic costs involved in congestion such as time allocation, pollution, accidents etc etc etc are recognised in terms of subsidy where applicable paid to the train operators. There is no requirement for passenger train operators to be fully nationalised. In theory they are not in the UK. Like a lot of industries and like the (private) buses central and local government has made a decision on the timetable it wants and contracts an operator to run that timetable in the form of a franchise. Now, under the nationalised BR passenger trains actually made some cash (not all) and freight was mostly dumped (except bulk where super profits were made on some captive flows)because it never made a return. So, no freight will not have enough margin - unless perhaps the freight operators own thier own rails........</P> <P> <EM> It is natural economic law - freight moves better in bulk, passengers move better with individualized choices. But because of your addiction to subsidy and overt control over the citizenry, you seem to have it backwards, with freight moving by road at a larger percentage while passengers move by rail in larger percentages</EM>.</P> <P>Overt control of the citizenry?. You're having a herbal aintyer? I make a choice when travelling to see my family - train, bus or car. All three are subsidised to a degree by the taxpayer. Cars are subsidised because the road space on which I travel is in a sense a free good. If I travel by bus, I catch a local (operated thru CCC by contract by Western Greyhound) to the nearest local major bus station using, yes a free good. And trains are subsidised by the taxpayer. So yes, in that case we are all addicted to subsidy. If the free market ruled, then I would hate to see what condition my local road network would be in; but look on the bright side there will be 25 motorways between London and Birmingham. Are passengers moving by rail in larger percentages a bad thing? Freight is subsidised as well as I have explained ad infinitum, but the penny doesn't seem to be dropping does it? </P> <P><EM>Now, for some real irony in you POV - if you opt for privatized integrated railways, you will be in a worse fix than you are now. Because without intramodal competition to keep things honest, the naturalized monopolies inherent in integration will disregard the lesser revenue providers in favor of the most optimized revenue producers - and them ain't passengers.</EM></P> <P>Fail to see the irony. Intergated operations cost less to run that OA operations. FACT. Maybe not in the states; but we are talking about over here aren't we? See above many many times. And incidentally, the franchises are let for a term of years to a set formuale and only a small basket of fares are regulated, and yes to meet those franchise payments the franchisees yes - target the optimized revenue providers. There is a quite legitimate fear that if the railway is reintergrated then some OA freight companies may get a raw deal - however there is a Rail Regulator and a weight of law on thier side. </P> <P> <EM>Freight has the value-added component, people do not. Commerce has a better tax return base than people's incomes.</EM></P> <P>what is the "value added component" if it isn't economic to transport freight by rail in the first place? Again see above. For the second part. Really? Like. Wow. </P> <P> <EM>Without that value-added component, it is impossible for a private railroad to make any money without a subsequent subsidy</EM>. </P> <P>Here is a question, how many "private" infrastructure projects on a very very large scale are undertaken by the railway companies in the US which do not have an element of either federal or state help in them? I would be interested to know. Genuinely. </P> <P> <EM>So in effect, you're minimizing the aspects that have greater tax revenue potential in favor of the aspects with the more, shall we say, "reluctant" tax revenue potential. We're slowly learning that in the States, and it has an analogous meaning for your situation. If the tax base you use to subsidize the rail service providers is related to user fees, then you're not maximizing that potential if you give preference to passengers over rail. If on the other hand it is from more general tax collections, then the misoptimization has less impact. But you'd still be subsidizing private monopolies (who will still charge higher fares than the nationalized integrated railroad of yore) to keep that passenger preference, and your roads will still be clogged with freight that should be on rails by all normal economic measurements.</EM></P> <P>"Economic measurements" applying to where? I have been through this many times, so I will not repeat myself again. I would love to see a lot more freight on the rail, but sadly, even paying basic marginal costs to the network operator and with govt help in the form of track access grants it has been an uphill struggle. There is a reason for passenger preference. I have been through it above. </P> <P><EM>How does that make you feel? Not too optimistic now, are we?</EM> </P> <P>Having read through that I actually feel rather frustrated. But never mind. </P> <P><EM>Back to the Peterborough process. You seem to be of the mindset that slot bidding negates scheduling, and running a scheduled railroad is paramount for a passenger dominated system. I agree that keeping to a tight schedule is key for running passenger operations. So why not let out the slots via the schedule? It shouldn't be that hard, since it is easier for freight to conform to scheduling than it is for passengers to conform to on-call departure/arrivals.</EM></P> <P>Dear Oh Dear Oh Dear Oh Dear Oh Dear....[(-D] I haven't laughed like that for a long long time especially with that last sentance. Here is a question do you actually work in the railway industry at all? Well, not over this side of the Atlantic obviously. Late running freeight trains, early running freight trains. On time freight trains (within 30m mins on time?) Maybe for the freight industry but it doesn't half play havoc with 24 trains per hour (count em) + into the London Termini. Especially in the rush hour, when 2000 tonnes of coal at say £1.50/tonne does not equate to 24 trains full of punters paying over £3k a year for the privilege. Next!</P> <P><EM>Do your passenger trains even approach max train length in conformity to the track layout? Probably not, most passenger trains don't even come close to maxing out length. So why not bid out the always available slot behind each passenger train and run it as an extra, if not a de facto mixed with the passenger train?</EM> </P> <P>To answer the first part, in terms of length, no they dont. Although there is a push to extend stations and formations so that they can match the braking/speed curves and stay within the signalling systems on various lines. Mixed passenger trains are very very hard with fixed formation sets and multiple units. Locomotive hauled mixed trains disappeared in the 1980's. Along with mixed pasenger/freight trains. The slot behind each passenger train, is usually yes. A passenger train. Possibly because there is no freight to run. Do you have any idea of how track capacity is inherently rationed by speed/weight/braking distances and the signalling system on that stretch of track? And thats for starters.</P> <P><EM>You'd be suprised what freight forwarders will conform to to get the goods from Point A to Point B in the most reliable manner and the least amount of cost</EM>. </P> <P>No S*** Sherlock! Blimey, and I thought my time working for EWS was actually worth something. </P> <P> <EM>All it takes is coordination adjacent to the passenger station at the freight's destination. And freight doesn't have to be boxcars and tanker cars, it can be exclusively trailers and containers. I know, I know, clearances on most lines are not fit for double stacks, let alone TOFC, but those are minor inconvienences.</EM> </P> <P>NO they are not MINOR inconveniences. They are major inconveniences actually. As rebuilding shall we say even 10k's worth of infrastruture doesn't half cost a lot of cash and will never ever show an economic return. </P> <P> <EM>Single stack is still more efficient than one container per lorrie, and lorrie's can still ride low in well type cars, enough so to make clearances. The point is, there are ways of fitting in the logical opportunities to move freight via intramodal competition, without throwing the baby out with the bathwater.</EM></P> <P>We did have atest run with piggback lorry's, but it went quiet. There is intramodal competiton in the freight market in terms of companies serving customers. The monopoly is the track provider, and the passenger franchisees and even they face OA operators (Hull Trains viz GNER) or other franchisees running seervices into thier areas on blatant ORCATS raids. </P> <P><EM>I am glad to hear you are delving into academia. You will learn something at University that you seem to lack on this forum - if you cannot take constructive critisism, you will fail in the academic world. Academia's lifeblood is dependent on the synthesis of ideas, not the repression of such.</EM></P> <P>I already have one degree thankyou. And this one is being offered via a Professional Railway Institution. I can take constructive criticism when it is grounded in fact and well reasoned argument so I as an individual are open to all ideas. I will leave for others to make the obvious rejoinder. As for your first line after that quote. No, it wasn't very hard. </P> <P>Yeghes da. </P> <P> </P>
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