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Transitional Railroads

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Transitional Railroads
Posted by Murphy Siding on Friday, January 2, 2009 8:27 PM

    The Map of the Month in this month's Trains Magazine features the Illinois Central Gulf, in an article by Bill Metzger.  He calls the ICG a 'transitional railroad'.

     A transitional railroad was, according to him, "a type of railroad that would include the likes of Chessie,E-L, BN, and PC.  They were stepping stones between the famed railroads of the classic era and the megasystems of today.....primarily created in a 10 year period between 1963 and 1972 by merging parallel networks...."

     I thought that was an interesting concept, that I'd never heard anyone describe like that before.  Looking back, were transitional railroads an inevetibility?  Are the railroads of today simply larger scale transitional railroads, on the way to bigger megasystems?

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Posted by BaltACD on Friday, January 2, 2009 8:32 PM

To this point in time....all previously existing railroads have been transitional; all the roads you named were made up of hundreds of other transitional roads.

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Posted by Limitedclear on Friday, January 2, 2009 8:50 PM

BaltACD

To this point in time....all previously existing railroads have been transitional; all the roads you named were made up of hundreds of other transitional roads.

Recently, E. Hunter Harrison has been quoted as believing that the endgame in North American railroading will be two or three mega-railroads (my term, not his). I don't entirely agree, but were that to be the case, it would certainly seem that the systems of today could be considered "transitional". I personally feel that the burgeoning weight of regulation on the railroad industry makes such an outcome less likely and may indeed encourage the breakup of some larger systems depending upon exactly what shape such new economic regulation might take and where (For example, if the U.S. and Canada differ on regulation, what result?)

LC

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Posted by carnej1 on Saturday, January 3, 2009 12:26 PM

Limitedclear

BaltACD

To this point in time....all previously existing railroads have been transitional; all the roads you named were made up of hundreds of other transitional roads.

Recently, E. Hunter Harrison has been quoted as believing that the endgame in North American railroading will be two or three mega-railroads (my term, not his). I don't entirely agree, but were that to be the case, it would certainly seem that the systems of today could be considered "transitional". I personally feel that the burgeoning weight of regulation on the railroad industry makes such an outcome less likely and may indeed encourage the breakup of some larger systems depending upon exactly what shape such new economic regulation might take and where (For example, if the U.S. and Canada differ on regulation, what result?)

LC

Your point about differing regulatory climates in the US and Canada brings to mind the proposed BNSF-Canadian Pacific merger from about 10 years ago. As planned the 2 RR's were to continue independent operation but under common ownership (a holding company to be called North American Transportation IIRC). As I remember the merger had US approval but the Canadian Gov't nixed it...

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Posted by Murphy Siding on Saturday, January 3, 2009 1:26 PM

Limitedclear

........................ I personally feel that the burgeoning weight of regulation on the railroad industry makes such an outcome less likely and may indeed encourage the breakup of some larger systems depending upon exactly what shape such new economic regulation might take and where ......

LC

  There's something most of us don't think much about.  What would it take, to bring the kind of mindset that brought about the Ma Bell breakup to the railroad industry?  Consider, that SP and ATSF got pretty much un-merged before they even had a chance to merge.  Could we see a point, where some of the Class 1's are told to divest themselves of some of their lines?

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Posted by Railway Man on Saturday, January 3, 2009 1:31 PM

carnej1

Your point about differing regulatory climates in the US and Canada brings to mind the proposed BNSF-Canadian Pacific merger from about 10 years ago. As planned the 2 RR's were to continue independent operation but under common ownership (a holding company to be called North American Transportation IIRC). As I remember the merger had US approval but the Canadian Gov't nixed it...

 

There was no approval from the U.S. Government made or promised.  There were some nonbinding opinions and soundbites, for what those were worth.

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Posted by Railway Man on Saturday, January 3, 2009 1:35 PM

Murphy Siding

Limitedclear

........................ I personally feel that the burgeoning weight of regulation on the railroad industry makes such an outcome less likely and may indeed encourage the breakup of some larger systems depending upon exactly what shape such new economic regulation might take and where ......

LC

  There's something most of us don't think much about.  What would it take, to bring the kind of mindset that brought about the Ma Bell breakup to the railroad industry?  Consider, that SP and ATSF got pretty much un-merged before they even had a chance to merge.  Could we see a point, where some of the Class 1's are told to divest themselves of some of their lines?

 

In my opinion -- which is worth $0.00 ... I highly doubt it.  It would require a major change in the way the public construes the role of government and the role of private enterprise.  Do you see an enthusiasm by the public for permanent public ownership of the means of production, planning, and economic activity?  I don't.

RWM

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Posted by Falcon48 on Saturday, January 3, 2009 10:03 PM

Railway Man

carnej1

Your point about differing regulatory climates in the US and Canada brings to mind the proposed BNSF-Canadian Pacific merger from about 10 years ago. As planned the 2 RR's were to continue independent operation but under common ownership (a holding company to be called North American Transportation IIRC). As I remember the merger had US approval but the Canadian Gov't nixed it...

 

There was no approval from the U.S. Government made or promised.  There were some nonbinding opinions and soundbites, for what those were worth.

RWM

  Not only was there no approval fron the U.S., but the STB signalled pretty strongly that it was not happy with the proposal.  As I recall, it put the control proceeding on hold while it revised its merger rules.  That appears to be what sunk the merger, although I don't think that either BNSF or CN ever actually said so.
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Posted by Murphy Siding on Sunday, January 4, 2009 3:31 PM

Railway Man

Murphy Siding

Limitedclear

........................ I personally feel that the burgeoning weight of regulation on the railroad industry makes such an outcome less likely and may indeed encourage the breakup of some larger systems depending upon exactly what shape such new economic regulation might take and where ......

LC

  There's something most of us don't think much about.  What would it take, to bring the kind of mindset that brought about the Ma Bell breakup to the railroad industry?  Consider, that SP and ATSF got pretty much un-merged before they even had a chance to merge.  Could we see a point, where some of the Class 1's are told to divest themselves of some of their lines?

 

In my opinion -- which is worth $0.00 ... I highly doubt it.  It would require a major change in the way the public construes the role of government and the role of private enterprise.  Do you see an enthusiasm by the public for permanent public ownership of the means of production, planning, and economic activity?  I don't.

RWM

Hmmm.  We might be on 2 different wavelengths here.  I wasn't thinking about public ownership of anything.  I was wondering, with the talk of more railroad re-regulation, that some vocal persons might suggest that the railroads are too big, and should be broken up like Ma Bell was.

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Posted by Paul_D_North_Jr on Monday, January 5, 2009 1:04 AM

Falcon48

Railway Man

carnej1

Your point about differing regulatory climates in the US and Canada brings to mind the proposed BNSF-Canadian Pacific merger from about 10 years ago. As planned the 2 RR's were to continue independent operation but under common ownership (a holding company to be called North American Transportation IIRC). As I remember the merger had US approval but the Canadian Gov't nixed it...

 

There was no approval from the U.S. Government made or promised.  There were some nonbinding opinions and soundbites, for what those were worth.

RWM

  Not only was there no approval fron the U.S., but the STB signalled pretty strongly that it was not happy with the proposal.  As I recall, it put the control proceeding on hold while it revised its merger rules.  That appears to be what sunk the merger, although I don't think that either BNSF or CN ever actually said so.

Ditto on what Falcon48 said above.  It was CN, not CP - and was to be called "North American Railway" = NAR.  This was just after the UP-SP merger service meltdown, and the STB wasn't about to let any merger that large happen again without intense preventative oversight.  The STB's 18-month moratorium was litigated by BNSF and CN, but was upheld by one of the U.S. Circuit Courts of Appeals.  I'm pretty sure that Rob Krebs (BNSF) did say that delay is what killed the merger, even if that was only because with that delay, there was no chance of consummating the merger by the self-imposed deadline / terms of the merger agreement - compare with the current deadline for CN to purchase the EJ&E (see separate thread on that).  Paul Tellier (CN) may have said so, too - but I'd have to pull my file on it from storage to confirm that.

- Paul North.

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by Paul_D_North_Jr on Monday, January 5, 2009 1:16 AM

Murphy Siding
Hmmm.  We might be on 2 different wavelengths here.  I wasn't thinking about public ownership of anything.  I was wondering, with the talk of more railroad re-regulation, that some vocal persons might suggest that the railroads are too big, and should be broken up like Ma Bell was.

Doesn't need to happen - because that's already about where we are now ! 

Recall that AT&T was broken up into 6 or 7 regional "Baby Bells" - none of which had overlapping territories for direct competition with each other -  plus Lucent (and maybe some other entity) for the captive Western Electric manufacturing operation and Bell Labs research division.  Well, the present 7 Class I's here in the U.S. = BNSF, UP, NS, CSX, NS, CP, and KCS are already essentially similar regional size operations, except that there is some limited competition between and among them.

 - Paul North.

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Posted by alcodave on Monday, January 5, 2009 2:52 AM

When where the phone companies broken up? My only choice is verizon or until recently digital internet phone with Time Warner. I thought Verizon pretty much controlled all land line service? I have a cell phone and no land line. Of course my cell provider is Verizon,so go figure.....

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Posted by Paul_D_North_Jr on Monday, January 5, 2009 4:52 AM

alcodave
When where the phone companies broken up? My only choice is verizon or until recently digital internet phone with Time Warner. I thought Verizon pretty much controlled all land line service? I have a cell phone and no land line. Of course my cell provider is Verizon,so go figure.....  

Mid-1980's.  Back then in the "Stone Ages", though, it was all land lines (tin cans & string) - no cell phones at all.  Since then, the phone companies have been like amoebas (and law firms) - merging and splitting/ shedding a couple of different times, so what you have today is hardly recognizable from back then.  Wireless was a "wild card" on top of that.  If you want to know more, try a Google search of "AT&T break-up", or similar - there were tons of aticles and analyses written about this, from then until now.

- Paul North.

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)

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