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[quote user="kenneo"] [quote user="MP173"]I agree Murph.  I agree with Michael that the 25 extra cars per week shouldnt go to provide revenue for the 2nd mainline.  ed [/quote] To do this would be classified as "fully alocated cost".  This was one of the passenger railroads favorite tools to justify abandonments and train off petitions.  Finally, the ICC (and also the STB) forced these "bad actors" to use the realistic value of "avoidable costs" which were the value of the incremental costs that the railroad would directly save.  For example, it costs more to maintain track for ClassV than it does for Class III.  That difference would be an example of avoidable costs. These 25 cars per week in our example, requiring a capacity increase that would be a second track - to have the rate set to "fully pay" for that expansion would be a "fully allocated cost".  The next shipper to add traffic to that line would not pay for that capacity expansion and you can be sure that the original shipper paying that full allocation is going to object -- fiercly. Fully alocating costs has its place.  Rates is not one of them. [/quote] Example: Take your typical PNW small time lumber mill.  They might be able to fill 10 centerbeams a week when times are good.  Those subsequently loaded centerbeams can and do end up just about everywhere on the North American rail network.  But that same little mill is located at the end of a 25 mile spur line over 90 lb jointed rail laid back in steam days.  The original Class I has sold the line to a shortline operator, and predictably the shortline has deferred as much as they can to the point of no return. Here's the two extremes - To keep this line in service, should the shortline itself bear the entrire cost of minimal rehab and charge the fully allocated cost to the one mill?  Or, since the output of the mill ends up throughout the NA rail grid, shouldn't the costs of minimal rehab be borne by the entire NA rail grid? Most macro economists would say the latter, for this reason - Our transportation system is not predicated on fully allocated costs, rather it is predicated on spreading such costs nationwide via the various transport trust funds, with an equivalence of incremental costing borne by State and local supplements to federal user fee funding.  When all players are given access to the national transport system, there is a net comprehensive gain for all - that "bridge to nowhere" in Alaska certainly has as much legitimacy to access federal highway dollars for a portion of it's cost as any other 'bridge to nowhere" located in Anywhere USA, because it would be available for all to use.  And there are literally thousands of such "bridges to nowhere" througout the USA, and each in their small way contribute to the fluidity of the US transportation system. The US rail industry, being a private integrated system, fails to realize this axiom.  It is willing to lop off the small players to focus on the volume producers, seemingly forgetting that those small players add up to rather decent volumes when taken collectively.  Conversely, when the small players are neglected, the cumlative effect is a significantly negative one on the bottom line, but perhaps more importantly the neglect usually leads to some rather loud complaining via the communication avenues affored to us by our representative style government. Oh, and those small players vote.  Which is why we are heading back to regulation.
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