The Railroads are Dying

[mudchicken]

railroads dying ? NO!

academia in this country getting dumber? YES! (both at the public school level and at the college level....public schools here in Denver warehouse kids/ don't teach & can't figure out why their high school grads are avoided like the plague by employers...)
Willy2 - hope Omaha is different .

[dehusman]

The only people the railroad is concerned with caring if the RR is in business are the shippers and potential investors. And they seem to be well aware of how the railroads are doing since business (and the stock) is up.

Dave H.

[Anonymous]

Dblstack: I hesitate to dive in to this, because you've rolled so many issues into one post. I'm only good at doing one thing at a time. So rather than go point-by-point, or issue-by-issue, I'll attack just two: p.r. and the basic question, if railroads are dying.

Railroads are not dying. Period. They haven't been healthier as a technology, in comparison to other transportation technologies, in almost 100 years. There is no question that for overland transportation of people and goods, the railroad has almost unlimited potential that is still only partially tapped. The May issue, which we're finishing up this week, goes into detail how Switzerland is rebuilding its core railroad system from scratch to eliminate long-haul trucking from between its borders. They're a small, densely populated, geographically disadvantaged country, so they have no choice but to be a leader. Other countries will eventually come to the same decision, when they have to -- no one wants to spend money until it's impossible to do otherwise.

In the U.S. -- which is what I think you want to know about -- the railroad has risen from the near-dead to become the acknowledged, preferred method of mass transit in large cities. Every city with any ambition for the future is building light- or heavy-rail or commuter systems (Milwaukee unfortunately is not one of them). Thirty years ago, there were exactly five U.S. cities with significant rail commuter. Now there are, what, 50? You can't ignore this. As for Amtrak, we'll know for sure in another two or three years, but I think it has rebounded from a nadir of inconsequentiality and has nothing ahead of it but growth. Its value to run corridor trains is increasingly acknowledged. Look at California for proof. The long-haul train, if it hasn't failed by now, probably won't, and increasingly they are becoming a series of connected corridor trains. That will inevitably lead to growth.

What might be dying is the old way of doing business hauling freight. The investor-funded right-of-way can only compete in limited, high-density lanes, and U.S. rail mileage continues to shrink as low-density lanes are abandoned. Nevertheless, there are more trains, and more ton-miles, than ever, concentrated onto the high-density lanes. There are plenty of people who point to this as proof of the marketplace's success, and plenty who point to it as proof of the marketplace's failure. It depends on what you think is most important -- investor profits or transportation service.

Regardless, railroads are not returning to investors their total cost of capital from their revenues alone. To stay in the game, some observers say the business overall is slowly disinvesting in their properties, handing over the necessary cash investors demand as merger premiums or stock buybacks. That will only go so far, and ends when there is nothing left to disinvest in. Other observers say the industry is simply not investing in aspects that have no promise.

The nation has no choice but to increase its investment in rail freight. Well, it has a choice: pay through the nose in highway maintenance, increase vulnerability to oil prices, degrade the environment further, make cities miserable with choked highways, and destroy wealth. I suspect it will decide those are poor choices. The problem, as I have pointed out in the magazine (I didn't invent this, I just talk to people) is that no one knows which is the best way to increase investment: let the market do it, use a public-private partnership, or use public money. All choices bear huge risks, either of not spending the money and not getting the desired outcome, or of spending the money and getting too little in return.

As for p.r.: a freight railroad's responsibility is to its investors. It will spend money to attract investors (UP's campaign was so directed, televised primarily on financial channels). Whether that's a failure or not would depend on what you think a railroad ought to do.

[jeaton]

Dave-

You have excellently put into words part of what I was thinking about raising the awareness of the public. It isn't just advertising.

One of the current items in slate.msm.com slams Dave Gunn (Amtrak) for having cried wolf many times in his career. As you probably know, he doesn't sugar coat anything he is involved in, but more importantly, it often takes something like that to say we have a serious problem here guys. He got enough of our representatives to understand to at least keep limping along, but here is a question. How many of the new riders became aware of the service because of the press? I'd bet more than a few.

[daveklepper]

I took Professor Ballshbaugh's course in "Transportation Planning" at MIT in (if memory is correct) in 1952. I asked why railroads weren't included, only highways and airports -not even marine ports, come to think of it! He knew I was an EE Major. He said: "David, railroads have no future in America, if you want to become a railway electrification engineer, go to France and become a Frenchman." I didn't follow his advice, and with my interest in music became an architectural acoustics engineer, but retained my lifelong interest in railroads and subscribed, for a while, to "La Vie du Rail" in addition to TRAINS and for a while Model Railroader. Why did Ballsbaugh say this? Who directed USA transportation planning? Remember it is "The Sloan School of Economics" and GM has contributed a substantial portion of the MIT budget. Ballsbaugh was succeded by my classmate, Marty Wohl. (Hope I got the spelling right) He cooauthored a book on transportation. A quote as close to accurate as my memory permits: "Funding public transit makes no economic sense because public transit does not pay for itself from the farebox." He was succeded by an (ex?) Israel (non-religious, I am sure, despite his name) Moshe ben Akiva, who wrote an article in a magazine he edits stating that American have no preference for trains over buses if fares, speed, access, and schedules are the comperable. Right in his own back yard the Downeast service has proved him wrong. Eisenhower said we should guard against the military-industrial complex, but he should have warned against the highway-oil-rubber-auto complex. Their goals: Maximize oil profits, even if it meant funding Islamic terrorism, and making it impossible for any American to enjoy a full life without owning an automobile and using it. Milton Friedman, another secularist, taught at MIT and his book said "The only responsibility of a corporation is to maximize corporate profits." Picture this scene in your mind: MIT Professor Milton Friedman teaching IBM Corporate executives to earn money aiding Hilter's Holocaust (puched card technology), which they did, even though since that period IBM has become a very ethical, clean, and minority conscious, and women protecting corporation, one of the very best in the USA. As for GM, why aren't all models available with ages-old technology that Honda and Toyota and now Ford to some extent are making available? It has also been said that GM did such a good job on rail dieselization mainly to prevent its electrification, but I disagree, they saw an opportunity to make money by applying automotive technology to rails, and that was their main motifve. And still maximize oil profits. Advice: Use the trains we have and public transit as much as possible. When you buy a car, insist on buying one with braking energy recovery (Hybrid), and don't buy your favorite model until it is available with that technology . In addition to Honda and Toyota, GM has and is employing that technology on buses (mostly where it sees an opportunity to tear down a trackless trolley network), and in my opinion even better and proven technology is available from Stored Energy Technology in Derby, England, Magnet Motor in Pressberg, Germany, ----and Astom, the big French conglomorate who probably based their technology on ideas I sent the French Acoustical Society some five or six years ago.

Now some politics. Of course I was appalled at Bush;s meager funding proposal for Amtrak. But Kerry isn't any better because the "Big Dig" was constructed with the vital North Station - South Station rail connector, only a highway! Dave Klepper

[Anonymous]

I agree 100 % !!!

No joke, here in Europe many people think in the same way: The railroads are at the end of the line.

Good joke!!!

[Anonymous]

Here's one to ponder.......If you asked 10 people on the street how the railroads are doing, I would bet that 8 or 9 would say that they're dying, they're a non-issue in America. Who uses them? What do they haul? The remaining one or two would have no data to even offer that much of an opinion. Does that prospect concern anybody?

I work in transportation and when newly-hired people sit in with me for orientation (since I'm the RR guy), a lot of them sheepishly ask, "Um, are the railroads still a viable way to move freight?" These are educated people who are starting a career in transportation.

I think a lot of this outlook that the RR's are on the way under is based on people seeing the branch line in their hometown being torn up and being made into a bike trail. People don't realize how the RR's have sort of mimicked the interstate highway system (their supposed nemesis) and have retrenched largely to a high-volume, hub-to-hub, corridor focused system (i.e. many fewer lanes, but more capacity and more trains in those lanes.) The average person has no idea about that. They've never seen the triple track at North Platte or Logan Hill in the Powder River Basin. They don't know about the BNSF Double-Track Transcon Main. They have no idea what it means that CTC was added to a line or sidings were added or lengthened. They just know what they see, which, with regard to RR's, frankly isn't much for most folks. The trains that they do see just appear as random things. No real rhyme or reason to them. No pattern. No big picture.

Do the RR's care that this perception exists. I've directly heard Sr. Execs from BNSF, NS, CSX & CN say no. When asked if this bothers them, they said that they wouldn't support any advertising to change this perception.

Did the Union Pacific "Building America" campaign do any good with regard to this issue. Well, it was flashy. It had some nice landscape shots. It even won some awards, but really, when you boil it all down, what did it say? "We're still in business!" Not much more than that, did it?

I've had stunned looks when I tell people that in the last 10-15 years, the RR's have moved more tons of freight, more miles than at any time in history (even more than during WW II.) They don't believe it. They just say "You're kidding, right?"

The RR's are satisfied to toil in obscurity. Maybe that's why they have such a hard time getting support for things like regional transit, Amtrak, public-private funding for infrastructure (i.e. intermodal ramps, grade crossing projects, etc.)

I guess if the majority of folks thought that my business was dying, I'd be concerned. I don't think that the RR's are. I've seen no showing of concern. Maybe that's just their arrogance. Would it bother you?[?]