Kyle Is it just me, or do you think Fred Frailey has gone crazy.
Forum rule #1. So now you are off-topic again by introducing the question of Fred Frailey's mental status. Credentials?
Forum rule #2. "No personal attacks or name-calling." If you weren't making a serious clinical judgement by your comment on Fred Frailey, then you were name calling.
C&NW, CA&E, MILW, CGW and IC fan
The two mega railroad idea is not new, been around for about a decade, Don Phillips discussed it in one of his columns around 2010, he had mentioned it to Warren Buffet, who had said it was a real possibility.
If UP hooks up with, say NS and BNSF with CSX or the Canadians, then we would have a pair of true trans con railroads, coast to coast service on either carrier.
There would be a lot of trackage right deals and agreements needed, but I think the economy of scale would, in the end, drive prices down.
Less interchange, less switching, faster transit times, less yard dwell time.
While I don’t see it happening anytime soon, within the next decade it might begin to form up.
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edblysard The two mega railroad idea is not new, been around for about a decade, Don Phillips discussed it in one of his columns around 2010, he had mentioned it to Warren Buffet, who had said it was a real possibility. If UP hooks up with, say NS and BNSF with CSX or the Canadians, then we would have a pair of true trans con railroads, coast to coast service on either carrier. There would be a lot of trackage right deals and agreements needed, but I think the economy of scale would, in the end, drive prices down. Less interchange, less switching, faster transit times, less yard dwell time. While I don’t see it happening anytime soon, within the next decade it might begin to form up.
However, one could argue with only two major RRs, the cost wouldn't go down even if the merger saves money, it could just be considered more profit. It could also lead to prices climbing because there is almost no competition to keep prices low which generally comes from competition.
Again, isn't there some law about conflict of interest? Even if the railroads sat down and agreed to merge, wouldn't that then have to be approved by the federal government? If something is going to happen, it sounds like it will take a lot of time.
Well, I am not going to argue it with you, since no matter what I or anyone else says, you will take the opposite viewpoint to continue dragging this on.
edblysard Less interchange, less switching, faster transit times, less yard dwell time.
All solid advantages of consolidation. However, all seven Class Ones are printing money in their present alignment, and I wonder if the impulse to tinker is very strong. Also, given the present clog of traffic, I'd think the rails need the digestion problems of merger like a hole in the head.
Maybe when things slow down again? In any case, Kyle is right that any Department of Justice similar to Eric Holder's would be all over a Big Two or Big Three.
Fred Frailey seems to look at China and see their success at building new railroads while assuming that we have not been successful in modernizing our railroads.
Based on that observation, he speculates that we might be able to get China to share their success with us.
I think you are correct, Ed. It is the STB which has primary responsibility for merger approval and the issues involved are competition vs public benefits in terms of efficiencies. Conflict of interest has no bearing. Here is a scholarly article reviewing the UP/SP merger strictly in terms of claimed and actual benefits.
http://www.ftc.gov/sites/default/files/documents/reports/union-pacific/southern-pacific-rail-merger-retrospective-merger-benefits/wp269_0.pdf
Since the mergers discussed would be end-to-end, competition would not be reduced.
When you have two actual coast to coast railroads competing for intermodal traffic, and the traffic for most points between….
Fred, didn’t Holden resign yesterday?
So the Prez needs to hustle a new appointee in pretty quick if he wants the attitude to remain.
Schlimm, end to end is just what Don Phillips and Buffet discussed.
And those places served by two or more carriers now would still have the same service, maybe a different paint on the locomotive, but pretty much the same beyond that
And the business for shortlines and regionals would increase, I would imagine the number of places where they could access both mega roads would increase,
Even my little road would see more business, as it is right now, we receive about 75% of our business from the middle and western parts of the country, but an merger like this would open up the east coast to us more.
Euclid Fred Frailey seems to look at China and see their success at building new railroads while assuming that we have not been successful in modernizing our railroads. Based on that observation, he speculates that we might be able to get China to share their success with us.
Didn't China use steam engines until recently. I remember a picture in the 90s(?) that showed steam engines in China being used for mainline service. So considering that the US RRs made the transition in the 50s, and have been improving since then, while the Chinese transitioned in the last two decades and introduced new technology to their RRs, the Chinese really aren't more successful than us, they just updated quickly all at once.
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