I'm not suggesting any of that.
I'm suggesting that looking at only the financials tells you nothing of interest unless your only interest is as a stockholder.And even then, only a really poor investor wouldn't look deeper into the industry.<p>
You seem to be saying that "railroads are not doing better now financially than they were then, therefore the entire concept was a failure."
I'm saying that while it may be a complete failure, relying on purely the numbers while ignoring all the manhours that went into being a railroad will tell you nothing of interest about the past 30 years of railroad history.
So, the railroads aren't doing better than they were. Why? What's different?
I gave you a thought on what's different. You seem uninterested in thinking about it and simply wish to blame Staggers and mergers as if they occurred in a vacuum where only the greedy demands of investors and management can possibly have an effect. It couldn't be because the entire market changed around them and they needed to adapt. Certainly not that.
And lets be clear, Staggers was about giving Railroads the freedom to act as the market demanded and act quicker. It was presumed that would mean nothing but higher rates. That clearly wasn't the case, but that doesn't mean that the agility that deregulation offered didn't improve the situation. You seem to think that the railroads can choose their traffic mix the way NBC sets up their Thursday Prime Time lineup.
Your logical point seems to be that because financial figure A has not improved over 35 years, Staggers failed.
My point is that is only one measure of the business absent of the myriad different things that affected the railroad business over these last 35 years and is therefore meaningless.
YoHo1975ICLand But the question is, how capable would they have been without the supposed benefits of deregulation and mergers?
ICLand
No, that isn't the question because the question isn't about things that didn't happen, such as nationalization, levitation, or a permanent depression.
You are venturing deep into hypotheticals without offering any proof of anything, either way. You seem to be proposing that deregulation and merger allowed railroads to voluntarily do worse by choosing their traffic mix under deregulation, than they did under regulation when they couldn't? They wanted to do that?
Or they would have done better under regulation ... than they did under regulation? Or worse under regulation than ... they did under regulation?
Reflect on what you have seen. The ICC permitted railroads to command the highest rates ever charged for railroad service. The ICC had little control over railroad expenses. The flaw seen at the time was that the ICC did not permit higher rates fast enough. You are suggesting that the ICC would have then required railroads to carry new traffic at far lower rates? What causes you to think that? Rates were set by rate bureaus. Why would they have done that? And why would that prospective result be different than the actual result of lower rates compelled by competitive forces?
Perhaps humility should cause me to suggest I have been more baffled than I am right now at exactly what the logical point is, but I cannot recall when that might have been.
ICLandx. The point is, the claims of deregulation and merger benefits were supposed to give railroads more control over their mix, and hence, their profitability, i.e. make them more profitable.And that's what we look at for results. And, were they successful at what they said would be the natural results of deregulation and mergers?
x. The point is, the claims of deregulation and merger benefits were supposed to give railroads more control over their mix, and hence, their profitability, i.e. make them more profitable.
And that's what we look at for results. And, were they successful at what they said would be the natural results of deregulation and mergers?
In other words, sure, their situation hasn't improved financially, but if they hadn't deregulated and hadn't merged, would their situation be even worse? Because the circumstances under which they're trying to make money have changed, and that will affect what they are capable of making.
It's entirely possible that you are right, that deregulation didn't help at all and that they could be the same or better if Staggers never happened, but I don't see anything in this thread that would illustrate that, because all that was discussed up to the point I clumsily jumped in was numbers without context.
A railroad of 1975, with it's route profile and commodities hauled is not a railroad of 2010. This change is independent of success or failure, but it does make a big difference on what is possible. The business model that got UP it's 1975 financial figures, at least as far as I can tell simply does not exist. In other words, they can't do what made them that money in the 1970s.
Part of that change is internal, in the form of mergers, new minds, fresh ideas. Part of it is external, the service that shippers want has changed. Moving containers from California to the midwest is far and away more important for a western road in 2010 as compared to 1975. How would 1975 UP handle such traffic? They have essentially one route in to California and one into Portland. They don't get revenue from the WP/SP or C&NW portions of the routes. They have extensive competition. In fact, ATSF is the ONLY railroad from 1975 that would probably have a viable California Intermodal route in 2010.
By bringing in WP, SP and C&NW, UP has created a viable end to end network to move containers from all of the west coast. They have a network that is tailored to the traffic patterns that currently exist. Or at least, that's the implicit goal of those mergers.
So, I guess to make it simple, what I'm trying to suggest is that the context of those financial figures is not the same. Why did they make all these changes and not "apparently" improve their bottom line? Because going out of business would result in an even worse bottom line.
YoHo1975 Are you really trying to suggest that the percentage of traffic and the margins on carrying it are the same? That moving from a traffic profile that was Boxcar loads, Coal and some intermodal, to a traffic mix intermodal, Unit trains and some mixed freight along with the inherent change in fees for such services doesn't present a major shift and a change in the way railroads must be operated? Is that really what you're saying?
I've read this over, and I still can't figure out where you are going.
UP had a profit margins in 1965 of 14.4%, 1976: 5.9%, 2008: 6.28%.
Don't you think those take into account "traffic mix"?
How could they NOT take into account, automatically, "traffic mix"?
Are you suggesting that because the profit margin is so much lower after deregulation than it was in the doldrum days of the 1960s, and not that much better than the crisis days of the 1970s that "something" must be wrong with the way it is measured?
And that traffic mix changes must explain it?
Of course they do! And beyond that, deregulation and mergers must play a role because they are partial drivers of traffic mix. The point is, the claims of deregulation and merger benefits were supposed to give railroads more control over their mix, and hence, their profitability, i.e. make them more profitable.
oltmanndICLand Norfolk & Western had 70% coal tonnage in 1925, it's 22% on the NS today. Pocahontas down. And less than 1/2 is Poky coal - but tonnage is similar. But...NS = Sou + NYC&StL, + Wabash + 1/3 PRR plus a good dash of NYC. So, how do you untangle that in the analysis?
ICLand Norfolk & Western had 70% coal tonnage in 1925, it's 22% on the NS today. Pocahontas down.
Well, it was kind of my point in response to the observation: " Are you really trying to suggest that the percentage of traffic and the margins on carrying it are the same?"
The answer is clearly no, and one good reason is that the companies being measured are likewise in a state of long term flux, as are the industries, the economy, technology and civilization. But, to find reference points for comparison ... ah, yes, financial metrics.
YoHo1975 The traffic profile is one gigantic undeniable difference. the question to ask is how would say, the UP of the mid 70s do with the traffic mix of the 2000s?
The traffic profile is one gigantic undeniable difference. the question to ask is how would say, the UP of the mid 70s do with the traffic mix of the 2000s?
You're trying to argue something, but I don't know what. That "something" happened that may have caused something else to go up, down, or sideways? Interest rates change too. The whole economy has gone up and down at least once during that time.
How is the traffic profile "one gigantic, undeniable difference"?
The fact is, financial metrics don't care. They measure what is there, in dollars, and if it improves, the financial metrics improve; if they deteriorate, the financial metrics show the deterioration and it doesn't matter if UP carries fewer cows and more coal or more cows and less coal. If the mix generates a poor financial result, well, shouldn't that show up? Wouldn't it? So what if the mix changes? That's the whole point of the financial metrics, measuring a company's financial position as a result of the business it is doing.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
schlimmoltmanndschlimmWhile operating ratio is a rail industry-specific metric, operating margin (operating income divided by revenue), which takes into account profit, might be the best indicator of how well-run a rail is and allows for a direct comparison of how efficient it is pre-and post merger.It's really too squishy for that. Conrail drove it's OR to new lows in the last year before the NS/CSX merger by throwing every thing that wasn't nailed down into the boiler to make steam. It didn't reflect the OR of being an ongoing concern. I can also change based on a road's operating philosophy. If you decide you don't want to own any freight cars (and not lease any long term), the the cost of ownership of the car fleet you are using is an operating cost. If you own all your own cars, it's a capital cost. You could make nearly the same profit and have a radically different OR. Then just use: net income/revenue. That would get around your concerns while allowing direct YTY comparisons by using a ratio rather than simply comparing net profits. If, for example, NS -n 2009 has 4X the revenue as in 1975, but only 2.5X the profit, it would appear to be a much less efficient operation and the mergers have led, as some economists theorize (Freiburg School), to more inefficiency.
oltmanndschlimmWhile operating ratio is a rail industry-specific metric, operating margin (operating income divided by revenue), which takes into account profit, might be the best indicator of how well-run a rail is and allows for a direct comparison of how efficient it is pre-and post merger.It's really too squishy for that. Conrail drove it's OR to new lows in the last year before the NS/CSX merger by throwing every thing that wasn't nailed down into the boiler to make steam. It didn't reflect the OR of being an ongoing concern. I can also change based on a road's operating philosophy. If you decide you don't want to own any freight cars (and not lease any long term), the the cost of ownership of the car fleet you are using is an operating cost. If you own all your own cars, it's a capital cost. You could make nearly the same profit and have a radically different OR.
schlimmWhile operating ratio is a rail industry-specific metric, operating margin (operating income divided by revenue), which takes into account profit, might be the best indicator of how well-run a rail is and allows for a direct comparison of how efficient it is pre-and post merger.
While operating ratio is a rail industry-specific metric, operating margin (operating income divided by revenue), which takes into account profit, might be the best indicator of how well-run a rail is and allows for a direct comparison of how efficient it is pre-and post merger.
Then just use: net income/revenue. That would get around your concerns while allowing direct YTY comparisons by using a ratio rather than simply comparing net profits. If, for example, NS -n 2009 has 4X the revenue as in 1975, but only 2.5X the profit, it would appear to be a much less efficient operation and the mergers have led, as some economists theorize (Freiburg School), to more inefficiency.
greyhoundsIf the marginal costs go down due to greater efficiency the railroad will seek freight at lower revenue while attempting to maintain prices on existing business. That lower revenue will still cover the lowered costs. i.e. they can reach out further from an intermodal terminal, incurring higher dray costs while getting lower rail revenue and still come out ahead. This will improve their profitability but mess with the OR because both the numerator and denominator will go down Because they both decline, the OR can stay constant while profitability goes up. Greater efficiency allows lower rates to be profitable and profitability is the real goal, not a lower OR. And that is just what happened.
This will improve their profitability but mess with the OR because both the numerator and denominator will go down Because they both decline, the OR can stay constant while profitability goes up. Greater efficiency allows lower rates to be profitable and profitability is the real goal, not a lower OR.
And that is just what happened.
If the OR stays constant, profitability on lower revenues goes down, not up.
80/100= 80%
Profit= 20
Revenue declines to 90; costs decline to 72. 90/72. Operating Ratio = 80%
Profit = 18.
And that is just what happens.
Of course, that's not a very easy comparison to make, but then, that's the point.
YoHo1975 Are you really trying to suggest that the percentage of traffic and the margins on carrying it are the same?
Are you trying to suggest that railroad traffic hasn't always been changing and that margins haven't always been changing? When have they ever been "the same"?
Union Pacific carried 16% of its tonnage in coal in 1925; it's about 23% today. Powder River up. Norfolk & Western had 70% coal tonnage in 1925, it's 22% on the NS today. Pocahontas down.
Hint: percentage of traffic never stays the same. Margins never did, they never will, but you can get a sense of how well a company is doing or a management is doing by using standard financial metrics that make reasonable comparisons possible over time and between companies or managements.
C&NW, CA&E, MILW, CGW and IC fan
ICLandYoHo1975ICLand What happened?Mergers. Stack and Pig trains? Powder River Coal? The entire profile of what the railroad carried changed over the last quarter of the 20th century. Intermodal is a low margin high reliability business to be in, but its one of the few games in town. Having access to markets likely drives mergers as much as anything else. LCL? REA Express? Flexi-van? Pocahontas coal? Oops, I meant, Hanjin, JB Hunt, UPS and Powder River coal.
YoHo1975ICLand What happened?Mergers. Stack and Pig trains? Powder River Coal? The entire profile of what the railroad carried changed over the last quarter of the 20th century. Intermodal is a low margin high reliability business to be in, but its one of the few games in town. Having access to markets likely drives mergers as much as anything else.
ICLand What happened?Mergers.
What happened?
Mergers.
LCL? REA Express? Flexi-van? Pocahontas coal?
Oops, I meant, Hanjin, JB Hunt, UPS and Powder River coal.
schlimm If one of the questions here is whether or not mergers have led to greater efficiency for railroads, wouldn't operating ratio be the best metric, rather than ROI or ROA?
If one of the questions here is whether or not mergers have led to greater efficiency for railroads, wouldn't operating ratio be the best metric, rather than ROI or ROA?
No. A lower operating ratio is a good thing, but it's not the real goal.
It measures the operating margin - how much does a railroad have to spend to get the revenue. (operating expenses/revenue) Higher margins are good, but they are only part of the equation. Profitability = margin x volume. Proitability is maximized when the last unit of production is sold exactly at its cost of production. (marginal cost = marginal revenue) Obviously, this is hard to do in the real world, primarily because things keep changing and it's very hard to nail down the exact cost of hauling that final load of freight. But that's the general idea.
If the marginal costs go down due to greater efficiency the railroad will seek freight at lower revenue while attempting to maintain prices on existing business. That lower revenue will still cover the lowered costs. i.e. they can reach out further from an intermodal terminal, incurring higher dray costs while getting lower rail revenue and still come out ahead.
Paul_D_North_JrThanks for that link, Don. I'd not known of that speech or its publication before - a fascinating read. - Paul North.
Thanks for that link, Don. I'd not known of that speech or its publication before - a fascinating read.
- Paul North.
ICLand oltmannd In a Stanley Crane speach (that's out in the internet somewhere...) he explains how he was persuaded to support legislation that would help Conrail get a fair division of interline revenue. He was persuaded? Just how much persuasion did that take?
oltmannd In a Stanley Crane speach (that's out in the internet somewhere...) he explains how he was persuaded to support legislation that would help Conrail get a fair division of interline revenue.
In a Stanley Crane speach (that's out in the internet somewhere...) he explains how he was persuaded to support legislation that would help Conrail get a fair division of interline revenue.
Just how much persuasion did that take?
John Kneiling once wrote roughly this about the Penn Central merger: "Al Perlman of NYC and Stuart Saunders of PRR got this idea, and couldn't let go of it, even when it got burdened down to the point of impracticality by all sorts of conditions - like including the New Haven, maintaining all kinds of passenger services, etc. - demonstrating that they were amateurs, because they couldn't walk away from it. A pro is a guy who knows when to and can say 'No' to a deal."
I'll observe that 'walking away' was not unheard of in the industry, even back then - the UP had sense enough to walk away from its attempted acqusition of the Rock Island after the ICC hearings and appeals had dragged on for like 10 years before a lukewarm approval was granted - by which time the Rock was pretty widely recognized as the granger railroad equivalent of a 'dead man walking'.
There may be some confusion here - let me attempt to sort it out. I believe Don is referring to back when L. Stanley Crane was President and CEO of the Southern Rwy. - which was before he became CEO of ConRail - and had all those glossy color 2-page ads in Trains each month wherein a selected Southern blue-collar employee would say a few good words and then have Crane explain how the Southern was great and moving forward, etc.
Anyway, as I recall it sometime in the late 1970's CR declared an embargo - esp. on inbound boxcar traffic from the southern US railroads - claiming chronic and structural "revenue inadequacy" for the high terminal costs CR incurred in handling them. A good part of the problem was that with the decline of manufacturing in the NorthEast US, there were few outbound loads, so that traffic was highly unbalanced. Of course, that CR embargo provoked a furor and a commercial, interchange and regulatory crisis, which was eventually resolved by granting CR a bigger slice of the rate division as approved by the ICC - the details of which I don't know.
jeatonICLand greyhounds You've made my case by showing that the rail freight industry is far more efficient after dereg and after all the mergers. According to your chart, it's charging the same as it was in the early 1970's, but those same rate levels produce a far different result now. If they're charging the same prices, then the only reason that the railroads can be financially healthy is that they've improved efficiency. Railroads such as Union Pacific and Norfolk & Western were charging the same rates then, and earning higher rates of return. Since I have no idea what your case is, I have no idea how that specific measure of declining efficiency supports it. And how the historically high rate levels of 1975 are a good thing because we've reached them again today, supporting the notion that a healthy Union Pacific and N&W in 1975 represented some kind of failure, but that lower rates of return for them today represents some kind of exalted triumph over their condition in 1975 is a conundrum I will have to leave to someone more qualified to analyze, as I have a feeling it has little to do with economics one way or another. In 1975, the N&W and the UP were two of the rare exceptions to the generally dire financial conditions for railroads. At the time, the N&W had the benefit of being able to serve Appalachian coal mines with their very big domestic and foreign markets. The UP thrived because they usually received a division of revenue on interline traffic much higher than their portion of the cost for handling the business. Had these companies not become part of larger systems, they would now be relegated to dust bins.
ICLand greyhounds You've made my case by showing that the rail freight industry is far more efficient after dereg and after all the mergers. According to your chart, it's charging the same as it was in the early 1970's, but those same rate levels produce a far different result now. If they're charging the same prices, then the only reason that the railroads can be financially healthy is that they've improved efficiency. Railroads such as Union Pacific and Norfolk & Western were charging the same rates then, and earning higher rates of return. Since I have no idea what your case is, I have no idea how that specific measure of declining efficiency supports it. And how the historically high rate levels of 1975 are a good thing because we've reached them again today, supporting the notion that a healthy Union Pacific and N&W in 1975 represented some kind of failure, but that lower rates of return for them today represents some kind of exalted triumph over their condition in 1975 is a conundrum I will have to leave to someone more qualified to analyze, as I have a feeling it has little to do with economics one way or another.
greyhounds You've made my case by showing that the rail freight industry is far more efficient after dereg and after all the mergers. According to your chart, it's charging the same as it was in the early 1970's, but those same rate levels produce a far different result now. If they're charging the same prices, then the only reason that the railroads can be financially healthy is that they've improved efficiency.
You've made my case by showing that the rail freight industry is far more efficient after dereg and after all the mergers. According to your chart, it's charging the same as it was in the early 1970's, but those same rate levels produce a far different result now. If they're charging the same prices, then the only reason that the railroads can be financially healthy is that they've improved efficiency.
Railroads such as Union Pacific and Norfolk & Western were charging the same rates then, and earning higher rates of return. Since I have no idea what your case is, I have no idea how that specific measure of declining efficiency supports it.
And how the historically high rate levels of 1975 are a good thing because we've reached them again today, supporting the notion that a healthy Union Pacific and N&W in 1975 represented some kind of failure, but that lower rates of return for them today represents some kind of exalted triumph over their condition in 1975 is a conundrum I will have to leave to someone more qualified to analyze, as I have a feeling it has little to do with economics one way or another.
In 1975, the N&W and the UP were two of the rare exceptions to the generally dire financial conditions for railroads. At the time, the N&W had the benefit of being able to serve Appalachian coal mines with their very big domestic and foreign markets. The UP thrived because they usually received a division of revenue on interline traffic much higher than their portion of the cost for handling the business.
Had these companies not become part of larger systems, they would now be relegated to dust bins.
In a Stanley Crane speach (that's out in the internet somewhere...) he explains how he was persuaded to support legislation that would help Conrail get a fair division of interline revenue. The divisions of revenue that were far outside of the cost split were propping up the western and southern roads at the expense of the Conrail. The point is, you have to look a the industry as a whole to have any chance of seeing any merger effects.
jeatonIn 1975, the N&W and the UP were two of the rare exceptions to the generally dire financial conditions for railroads. At the time, the N&W had the benefit of being able to serve Appalachian coal mines with their very big domestic and foreign markets. The UP thrived because they usually received a division of revenue on interline traffic much higher than their portion of the cost for handling the business. Had these companies not become part of larger systems, they would now be relegated to dust bins.
If recognizing what happened is 20/20 hindsight, as one poster wrote, I suppose attempting to explain what didn't happen qualifies as 20/20 nosight. I posted the 1996 ROI results: the smallest railroad posted the best results by far: Illinois Central. Does it mean anything? Apparently not. CN is, adjusted for inflation, relative in size to the C&NW in 1975 to the larger railroads of its era. What RR dust bin do you invest in these days?
A merger wave engulfed US railroads in the late 90s. In virtually every single case, rates of returns fell. No rate of return improved within the time frame that impacts would be reasonably measured. To the point: the failure of these mergers to generate predicted returns is consistent with results of mergers outside the rail industry. So you have two sets of consistent facts: failure to show positive results across several comparable mergers, and consistency with other merger efforts outside the industry. No one can show facts to the contrary, until and unless some intervening factor changes the overall economic environment, in which case merged and unmerged benefit alike, or even more favorably to the unmerged. And let me be a Missourian for a moment: if mergers benefit RRs preferentially to non-merged railroads under the same conditions: show me. It should be easy, reading some of the comments; as easy as showing how the Staggers Act predicted rates would go down.
Proof? No, not to people for whom these are some kind of sacred political cow. There will never be a proof adequate.
I understand, to a lot of people, actual evidence doesn't matter much. The narrative is more important.
As to the "rare exceptions" in the 1970s, I sense that, at least here, a narrative has been constructed of unmitigated economic crisis. To the extent that what did happen was set in motion by the failure of an unprecedented merger attempt, I find the current allegations somewhat ... interesting; ironic considering comments attempting to support the efficacy of "mergers."
But, for those who enjoy reality instead of speculation, here are some comparisons of the leading railroads, by ROI, between the eras of 1976 and 2008:
Railroad (Class I) ......... ROI, 1976N&W .......................... 7.6
Elgin, Joliet & Eastern ...... 6.7% Chicago & Illinois Midland ... 6.5%Southern Ry .................. 6.3%Missouri Pacific ............. 6.1%Union Pacific ................ 5.9%Richmond, Fredricksberg & Pot. 5.9% ---------------------- The average of the top seven Class I railroads (in terms of ROI) in 1976 (a very bad year) was 6.43%. The average 2008 (a reasonably good year) of the top seven Class I railroads (Return on Assets*) was 6.14%. Canadian National ... 6.9% Norfolk Southern .... 6.81% BNSF ................ 6.49% Union Pacific ....... 6.28% CSX ................. 6.26% KCS ................. 4.70% Canadian Pacific .... 4.54%
* ROI and ROA are terms of art. They are not necessarily directly comparable between railroads depending on depreciation policies, and not necessarily directly comparable between 1976 and 2008 because of accounting changes in 1984 shifting from betterment accounting to depreciation accounting for roadway items. However, they offer ballpark perspectives.I understand that some will say that very small roads skewed the numbers unfairly upward in 1975.
Yeah, they did. They are not around to skew it upward today, although one of the smallest surviving Class I's does, in fact, skew the average up. It is interesting to note how smaller railroads keep skewing the results upward over broad periods of time. "Nothing to be seen here, move on." But, UP was only fourth of the large Class I's showing good returns -- its uniqueness isn't quite that unique and that rationale, that there were "just two" unique railroads, breaks down compared to MoPac and Southern, which not only had different circumstances, but taken together, represent an Eastern road, a Southern Road, a Midwestern Road, and a Western Road. That's as diverse as it gets.
And if you take the four largest from each list, their rates of returns at 6.475% are identical. The fact is, "most" railroads were not in trouble in the 1970s, but memory even among experienced railroaders is rewriting that fact in favor of the very large fallout that did affect important roads as a result of the biggest merger failure, at that time, in world history. There's a balance in there; "most" railroads were not in bankruptcy court, but were doing as "OK" as today. And the factual record clearly shows that.
As was pointed out on this thread earlier, very rarely has any Class I even reached "revenue adequacy" under 30 years of deregulation and after extensive mergers. And I see that touted here as evidence of "outstanding success." Others might argue, validly I think, that failure to achieve even "adequacy" represents at least some level of failure, hardly evidence of success. I guess people have different standards.
I will admit, it is interesting to see how people think. I'm not sure its worth the effort since there isn't much in the way of facts in return.
Why is this a sore spot? Well, it wasn't until I thought about it. But, a friend of mine, a retired Chief Dispatcher, was reminiscing a couple of months ago. His office in 1975 was two blocks from mine. Three years later, it was 350 miles away. By 1985, it was 2,000+ miles away. And he related, "every time you got a chance to catch your breath and put your feet up, it meant that the Company needed to add another territory to your jurisdiction. So, there was this relentless pressure, and every time there was a merger, a new set of geniuses, who had never done this before, came in and upset the apple cart in the name of efficiency. And they removed sidings, closed down yards, consolidated dispatchers, and couldn't figure out why things didn't work as well as they did before. We lost fluidity, had tired crews, tired dispatchers, nobody was happy. They announced that it wasn't their job to make anyone happy. Considering that costs went up, and returns went down, they succeeded."
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
greyhoundsYou've made my case by showing that the rail freight industry is far more efficient after dereg and after all the mergers. According to your chart, it's charging the same as it was in the early 1970's, but those same rate levels produce a far different result now. If they're charging the same prices, then the only reason that the railroads can be financially healthy is that they've improved efficiency.
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