LETS DEBATE OPEN ACCESS

[PNWRMNM]

All,

Lets debate open access straight up.

I think Mark Hemphill's piece this month pointed out the undesirable features of a tax on either shippers or carriers, some portion of which would make it back to the infrastructure.

I am not a fan of open access for several reasons, I will cite a few.

First, while the friends of ths shippers think this is a good idea, it will eliminate what modest ability the carriers now have to price discriminate. This will bring rates to very near long run variable cost, decreasing revenue, and decreasing profits.

Second, if the idea is to get more dollars into the plant, I do not see how open access will do it.

Third, while the fixed costs associated with the plant will disapear from the carrier's budgets, it will be replaced by operating costs. The infrastructure entity will have to generate funds to maintain the track and terminals and do the dispatching. These costs do not disapear, they just get shifted to a new entity. That entity will almost certainly make pricing mistakes. Those mistakes will either cause shortfall in maintenance funds or result in payments so high as to discourage use of the asset. This will be a major pricing problem.

Fourth, I see the most important issue as getting money into the infrastructure. Any railroad has a list of capital projects far longer than what it can fund. They will rank the projects on the basis of expected return and fund those that exceed their investment threshold, presuming they can get the funds, which they should so long as the investment threshhold is greater than the cost of money.

My view is that the next layer of projects can be funded through the RRIF program which is a cheap money loan program. I have not seen any of the Class I carriers use these funds. Any ideas why, or have I missed something?

Finally, for the proponents, who would own the fixed plant asset? Book value is probably $100 billion.

How do we get from here to there? Would you have the Federal Government buy the asset or just steal it? Would you incorporate a for profit infrastructue company owned jointly by all of the carriers together? Something like a big union station company? Would you distribute stock in the infrastructure company to shareholders of the railroads so they could reallocate their portfolios if they desired, or would operating railroads be required to hold their infrastructure stock? Who would apply for authority to build or abandon?

In short what is your vision, why is it better, and how do we get there?

Mac

[Junctionfan]

Well I don't see too much need for open access except for maybe 1 line that I can think of so I'll use that one as an example.

The Canada Southern which runs along Lake Erie on the Canadian side and runs between Detroit and Buffalo. Every I believe knows the history of it. It is flat and very direct unlike the CSX and NS lines that go through the New York/ Pennsylvania area where it gets into different grades. The CASO is 160 miles more direct for CSX and 300 miles for NS.

According to Railway Age, October 2002, U.S Rep William O Lipinski writes "With U.S freight traffic expected to double by 2020, capacity constraits and congestion are national problems" and "It would be a serious mistake to ignore our nation's growing rail infrastructure needs". If traffic is to double by 2020, think how much problems intermodal and other time sensitive trains will have in going through places like Fostoria, Deshler and other major junctions. I am proposing that NS and CSX share the CASO for their intermodal and other time sensitive trains. Also, CN runs a Buffalo to Sarnia train which would be faster is they took the CASO. CP had plans to run the Expressway between Detroit and Buffalo to run the some 500 trucks a day that would likely be interested in the service according to the RWTF. Trillium Railways operates both in Niagara and St.Thomas areas so if they needed to, it might be nice for them to run power or equipment between their two destinations. There is also passenger potential between Detroit and Buffalo (Amtrak's Rainbow) and VIA between Windsor and Fort Erie or Niagara Falls.

Essentially, this line would be open access so in this case, this line would be perfect for every rail entity that could use this. I don't know how true this is for other lines but this one I say yes.

[Anonymous]

QUOTE: Originally posted by PNWRMNM

All,

Lets debate open access straight up.

I think Mark Hemphill's piece this month pointed out the undesirable features of a tax on either shippers or carriers, some portion of which would make it back to the infrastructure.

I am not a fan of open access for several reasons, I will cite a few.

First, while the friends of ths shippers think this is a good idea, it will eliminate what modest ability the carriers now have to price discriminate. This will bring rates to very near long run variable cost, decreasing revenue, and decreasing profits.

Second, if the idea is to get more dollars into the plant, I do not see how open access will do it.

Third, while the fixed costs associated with the plant will disapear from the carrier's budgets, it will be replaced by operating costs. The infrastructure entity will have to generate funds to maintain the track and terminals and do the dispatching. These costs do not disapear, they just get shifted to a new entity. That entity will almost certainly make pricing mistakes. Those mistakes will either cause shortfall in maintenance funds or result in payments so high as to discourage use of the asset. This will be a major pricing problem.

Fourth, I see the most important issue as getting money into the infrastructure. Any railroad has a list of capital projects far longer than what it can fund. They will rank the projects on the basis of expected return and fund those that exceed their investment threshold, presuming they can get the funds, which they should so long as the investment threshhold is greater than the cost of money.

My view is that the next layer of projects can be funded through the RRIF program which is a cheap money loan program. I have not seen any of the Class I carriers use these funds. Any ideas why, or have I missed something?

Finally, for the proponents, who would own the fixed plant asset? Book value is probably $100 billion.

How do we get from here to there? Would you have the Federal Government buy the asset or just steal it? Would you incorporate a for profit infrastructue company owned jointly by all of the carriers together? Something like a big union station company? Would you distribute stock in the infrastructure company to shareholders of the railroads so they could reallocate their portfolios if they desired, or would operating railroads be required to hold their infrastructure stock? Who would apply for authority to build or abandon?

In short what is your vision, why is it better, and how do we get there?

Mac

On, NO, not again...

Open access is not a good idea for oh so many reasons that we have gone over and over again...

I just can't expend the effort now. Try me back after the holidays...

The In Laws are coming, the In Laws are coming...get out your muskets...

LC

[Junctionfan]

What about this line in particular? Does this sound like a possible exception?

[Anonymous]

Public Ownership of Right of ways of Highways and Toll Roads is accepted and the Publics Right of Free Acess to them is also but Public Ownership of Railroad Infrastucture is not? Certainly unless you are living under a rock we all get benefits of cheeper and Cleaner modes of transporttion wether use them or not. Food is cheaper and fresher, Lawyers Doctors and Proffesionals can serve us without having to live in our area by taking Public Trains and Public Roads. We can have stuff brought to us from all over the world via Container trains and ships.
So making just the users pay for there access is unfair because there are third partys who benifit as well. Collecting Taxes from those people makes sure that our Infrastucture stays in place.
Private Ownership and Private capital may have worker when this country was young and Private Entrapranuers had pooled there money together to build our railroads and canals. But those people acted not out of benolence but for personal gain. In todays urbanised world Transportation is in The Pro Bono or the Public Good and Intrest . By acting collectivly under our a Democratic Goverment WE can decide what we need and when we need Infrastucture.

[Anonymous]

Per the reference to Mark's column, so you want equalization of so-called subsidies but not equalization of price competition? Isn't that just plain hypocrasy?

Putting aside for the moment the argument over whether the federal user fees for trucking can even be called a subsidy, why do the same people who are opposed to competitive access for rail shippers are the same people who are lobbying the federal government for financial aid to make the needed improvements to the nation's rail infrastructure and capacity? Can't you see that the current situation of capacity constraints was brought about by Staggers and the subsequent monopolistic behaviours of the railroads? Monopolistic behaviours breed inefficiencies, it's in every economics textbook, and it is proved to be true in real world experiences at every turn.

BTW, differential pricing and monopolistic pricing are one and the same. If it walks like a duck, and quacks like a duck, it's a duck. If the rates being paid by captive shippers are a monopolistic differentiation above those expected in a competitive environment, it's a monopoly situation. And now you want to exasterbate this unfairness and inherent market inefficiecy by sequestering taxpayer's dollars to feed the beast?

Open access itself can take on many forms depending at what level and degree of implementation you are talking about. Are you talking about a federal takeover of the nation's rail grid? with compensation? without compensation? including or excluding Class II and Class III lines? Are you talking about a separation of infrastructure owning companies from rolling stock companies? If so, are you assuming the infrastructure companies are completely private? a private-public consortium? or a public corporation aka Conrail and Amtrak? For the latter two, do you include tax credits and other incentives to aid in operations, or direct subsidies, or do they go it alone?

Are you taking any of the above examples and applying them to the whole nation, or just selected rail corridors where either capacity constraints or where number of captive shippers begs for federal intervention?

Are you only applying open access to new rail corridors or additions to be constructed by the feds, or currently dual use lines?

Are you talking about reregulation wherein all shippers get competitive rate access and the owning railline has to haul cargo for a competitor at a set rate?

Etc., etc., etc.

[daveklepper]

Let us discuss Casnada Southern. As soon as congestion really becomes a problem on either CSX or NS, you can bet they will offer money to run some of the service via Canada Southern. And probably when one does it the other will follow just to stay competitive. This might be by haulage, by trackage rights, or whatever. This has been done before, like CN and CP out west using one railroad for eastbound and one for westbound. Right now the traffic probably isn't there to make the move worthwhile. I think the market place will take care of this situation very nicely without any open access legislation.

But isn't there a problem with clearances with the Detroit - Windsor tunnel? Isn't that why some CP traffic goes via the CN Sarnia tunnel?

Of course, even that problem can be solved with the demand high enough, including three or even four railroads jointly paying for the excavation and clearance raising.

I see no reason to monkey with the marketplace on that.

Regarding Amtrak, yes, a decently funded Amtrak, part of a National Public Transportation System, would have a Buffalo - Chicago service via Detroit (people do want to go from Erie, say, to Ann Arbor and Kalamazoo, not just to Detroit). I rode the Wolverine, the Detroit Limited, and the Detroit section of the Empire State Express many times, then the "steel fleet" remnant after the name trains were removed. Once during the Penn Central days, before Amtrak, I rode the Pennsy's one California Zephyr car, Silver Rapids, a 6&10 Budd identacle to the CB&Q, D&RGW, and WP 6&10 sleepers overnight from Grand Central to Detroit on the "steel fleet." As a younster, I remember, seeing the London and Port Stalnley Stilwell-designed interurban cars at London from the windows of the Empire State Express. And I remember the electric operation from Windor to the Detroit station!

[Junctionfan]

Regarding the Windsor tunnel, not a problem. There is plans to make that accomidate double-stacks. I think that the only problem is trying to aquire the land between St.Thomas and Attercliffe which would be a little challenging but if it is any consolation, the general consensus is that the effected communities is that they would be in favour of the railroad returning. That is a definately a plus. My only other concern is the International Bridge between Fort Erie and Buffalo is single tracked. That would have to go double track at least. CN and CP share it right now so if CSX, NS and Amtrak started to show up, you are talking serious bottlenecking. Not to mention in Buffalo, the Belt line would require some double tracking and where Exchange Street Station is, would be interesting indeed. Not impossible but there would need to be some decisions to make like removing the station and use the old Buffalo Station.

[Junctionfan]

Correction; the government wants to use the Windsor tunnel as a 401 extension to avoid Ambassador Bridge and deconjest the city roads so they would pay CP to build a brand new tunnel.

[Anonymous]

QUOTE: Originally posted by PNWRMNM

All,

.

Second, if the idea is to get more dollars into the plant, I do not see how open access will do it.

Well, *there* you go. the whole idea is just a veiled nutshell game to get taxpayers to subsidize rail plant maintenance.

If such a plan were put in effect, you would either charge enough for each use to cover the cost of proper overall maintenance, or you wouldn't.

Anytime the latter happened to be the case, it's pretty obvious who would get stuck with the bill.

However, if YOU DID (charge enough), then there is no reason why the railroads could not make the same allowances in their current operating capacity, and save the expense of having an additional layer of bureaucracy built into the process, along with the propensity for government waste

The whole idea is a scam.

[Junctionfan]

Actually I don't know if my idea is open access idea as much as a running rights alliance of CN, CP, CSX, NS and maybe Amtrak, VIA and Trillium Railways.

[tree68]

Let's see. Open access means that (given the capital) I can go out and purchase the necessary rolling stock and haul from point A to point B over whatever rails go from point A to point B. We now need a rail version of the FAA - yep, controllers (dispatchers), certification of operators (pilots, etc), and, oh yes, maintenance of the ROW (the FAA's ROW is pretty much self sufficient). A whole new bureaucacy. Granted, many of the folks currently doing most of those functions would likely move over, but making the shift from the current paradigm to open access is rife with the potential for problems that will make UP's meltdown look like a walk in the park.

I'd love to see a computation of what the tolls would be per ton-mile under an open access system (using full recovery - ie, no government subsidy), as well as some idea of what RR freight rates would look like under such a system. Assuming one could develop such numbers, it's possible that all parties involved might put aside parochialism and decide that it really is the way to go.

On the other hand, I'm not holding my breath.

[PNWRMNM]

Dave,

You are the advocate for open access. Tell us why and how.

Mac

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Dave,

You are the advocate for open access. Tell us why and how.

Mac

The "why" is easy: To ensure all rail shippers have access to competitive rates is the primary reason. Other reasons include optimizing functionality of disparately used parallel right of ways of different companies, enabling the states and the feds to add to the current rail grid in the same vein as waterways and highways, enabling the states and the feds to share in maintenance of rail corridors they see as key to their economic interests (without unfairly propping up sole use proprietary lines), allowing a dynamic in which private rail passenger services can be tried out and possibly prosper, and ultimately increasing rail's base ton/mile share of intercity freight via an expanding (not shrinking) right of way. In short, we need to correct the shortcomings of the partial deregulation known as the Staggers Act, in which rail companies were allowed to expand rate parameters, but captive shippers were not.

The "how" needs a little more definition. Which model do you want to start with? Government takeover? separation into private infrastructure and rolling stock companies? Public-private consortium? Partial open access or full open access? Pick one and we'll explore it.

[PNWRMNM]

Dave,

I believe your sympathy for the shippers is misplaced. Remember it was the shippers that beat the railroads into rebates in the bad old days and then had the ICC hold rates down between 1906 and World War One. Read Enterprise Denied by Albro Martin for an excellent discussion of the failures of the ICC in that era.

Staggers was designed to allow the carriers pricing flexibility, something every other business has. Yes that allows the carrier to price discriminate. I would argue that the problem is that in some cases the carriers have been too competitive. Powder River Basin coal rates, for example, are barely above long run variable costs.

Price discrimination is in the carriers interest, in the shippers interest and in the public interest. The reason is that not all commodities can afford to pay the same rate. Expensive manufactured articles can stand a higher rate per ton or per ton mile than can lumber or coal. Charging the one more and the other less is price discrimination, just like the airlines charging 10 different prices for identical seats on the same flight. If the carrier could get the high rate for all products, or seats, of course he would and there would be no price discrimination.

The carrier's problem is he can not get the high rates on the low value products so he takes a lower rate on them. So long as the lower rate makes some contribution to overhead and profit it is a good rate for the carrier. If is also good for the shipper of the low rated material, which can get to market now, but without the low rate it probably could not. It is also good for the high rated shipper as the low rated product is covering some of the carrier's overhead, or common costs. To the extent the low rated traffic has a contribution margin, the high rated traffic does not have make that contribution, and everyone comes out ahead.

Price discrimination becomes a problem when the high rate payer convinces his politician that he should have the lower rate because if the carrier can give that guy the lower rate, I deserve the lower rate. This political logic has been the cause of untold economic harm to the railroads.

As to flavor of open access you pick the one you like.

Mac

[jchnhtfd]

Oh dear. Here we go again...

First of all, on the Canada Southern line -- I expect that as traffic increases on the various parallel lines, trackage or haulage rights agreements will be executed for the use of that line. Junction's quite right -- it's a rather nice alignment, although I'm not sure it's in the best of shape just now. Which is relevant to the rest of the discussion.

Second, I'll buy Larry's definition of open access: assuming I have the resources to do so, I can go out and buy an engine (that would be fun!) and do a little advertising for freight, pick up a carload or two -- whatever I think can pay my way -- at East Overshoe Widget Works for delivery to a container ship at Long Beach, say, and be on my way -- just like a truck driver. It has an attractive sound. But let's think about it for a moment. Do I just trundle up to the siding switch, look both ways, throw the switch, and pull out on the main? If not, whom do I call for permission to enter the main? Hmm... ah... we have a central dispatcher, presumably the Federal Rail Authority (to parallel the FAA). A nice government agency which takes over dispatching all rail lines. But, of course, there are capacity limitations on the various lines; who is to decide who gets to run when? First come, first served? That's not the way it's done in the air, friends -- at any of the busier airports, there is a reservation system, and the airlines bid for slots -- so and so many planes per day, and no more. Is this a good system or a bad one? Hard to say, but it's the only one that works. And believe me, those slots aren't cheap. So we don't really have open access in the air, and we couldn't on the rails, either -- there are only just so many trains per day that can be run safely. OK. Back to square one. Now I also need the capital to bid for a slot on the line from East Overshoe to Long Beach. (maybe, one might say, the slots could be assigned by a lottery system, on a daily or monthly basis... so this day my two containers get the slot, and tomorrow the BNSF Maersk train, with two miles of containers, gets the slot (they sat in the yard today)). That might be fairer... but is it an efficient use of the resource (the track)?

OK, OK -- I've got my slot. Now I'm out on the main, trundling along in run 8. Oops. The second car of my two has a bearing problem. Do I call AAA? Where do I set it out? Does the CHAMP help truck come along and help me off to the shoulder of the track so the train behind me can get by without tying up traffic too much? Hmm... shoulder of the track? Uh... right.

Well, we get that problem solved, somehow. And I'm up and trundling again. Track's not too good, though -- pretty rough, in fact. Who is responsible for maintaining it? I'm not, for sure -- I just drive the train. Well, we have two possible models: a private authority is, and charges a toll for using the track (the toll road concept), or a public authority -- a State DOT. The toll road model works in this country because there is competition -- if the toll road is bad enough, truckers will go a different way. If the track is bad enough, then, I will go a different way? Can I? See dispatching, above. In many cases, probably not. The State DOTs are financed by... taxes. And, if you have the misfortune to live in a state where there are large urban areas, you will find that the roads which are maintained are the ones in the urban areas where the legislators have a majority.

In any event, we now have a Federal Rail Authority who dispatches, and the tracks are maintained by either a toll authority or a State DOT.

Now I'm trundling along, and I see a signal ahead -- red over red it is. How do I know just what it means? Oh yes, I've had to take an engine driver's license test. Who administers that? And who decides what rules I am to be examined on? I suppose the FRA, who would then have to come up with a one size fits all rule book for all rail lines, and all of the engine drivers would have to know all the rules (this gets interesting, since, of course, I can go anywhere hauling anything -- from two box cars in the shared territory around Newark, NJ, to a 10,000 ton container train coming down Cajon Pass -- and this ain't Train Simulator, folks).

OK, then -- we get around that one. But I'm in a hurry, and bust that red over red -- and get away with it (after all, a lot of folks do in traffic, don't they?). Who gives me a ticket, if anyone? A State Trooper in a hi-rail vehicle?

Please... we have a system which ain't broke. It fact, it works pretty doggone well. Leave it be.

[Junctionfan]

IMHO, the Canada Southern will likely be North America's only open access line if reconstructed. I can't see any other lines needing to be open access nor can I see others being in favour of open access by the railroads.

[dehusman]

Public roads were built with public money. Public roads are maintained with public money.

Railroads were built with private funds (for the most part). Railroads are maintained with private money.

Roads are public property, railroads are private property.

Open access would compell a private citizen of the US to allow a business competitor to use his property to compete with him. You would require a person to give up his competitive advantage.

Dave H.

[TH&B]

The CASO is a very straight and direct line from Buffalo NY to Detroit through Canada. It could be made as a high speed line or high tonnage line.

I know what little rail traffic there is for that route now uses the CN route or could use the CP and their lines go through Hamilton wich means these freights have to go DOWN the escartment and then BACK UP again.

There never realy used to be much on line traffic, although today you have the Nanticoke steel mills and huge oil refinery and near St Thomas the Talbotville Ford plant.

Through traffice would have to cross the boarder twice.

CN and CP rails together had a conspiracy to kill this line when there was some interest and money from other parties.

But alas would there be enough of a traffic base to reopen the CASO? New York state to Michigan ?

[Junctionfan]

Consider how much CSX and NS west/ east intermodals there are plus the automotive traffic. NS right now, runs a 327/ 328 which is an automotive run between St.Thomas and Buffalo Bison which currently uses CN's Stamford, Grimsby, and Dundas Subdivisions before heading down what I believe is the St.Thomas Sub at London. That's quite a scenic route for NS. Plus if CN and CP uses it for their few trains and VIA and Amtrak do something as well, the CASO has found it's traffic for sure.

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Dave,

I believe your sympathy for the shippers is misplaced. Remember it was the shippers that beat the railroads into rebates in the bad old days and then had the ICC hold rates down between 1906 and World War One. Read Enterprise Denied by Albro Martin for an excellent discussion of the failures of the ICC in that era.

Staggers was designed to allow the carriers pricing flexibility, something every other business has. Yes that allows the carrier to price discriminate. I would argue that the problem is that in some cases the carriers have been too competitive. Powder River Basin coal rates, for example, are barely above long run variable costs.

Price discrimination is in the carriers interest, in the shippers interest and in the public interest. The reason is that not all commodities can afford to pay the same rate. Expensive manufactured articles can stand a higher rate per ton or per ton mile than can lumber or coal. Charging the one more and the other less is price discrimination, just like the airlines charging 10 different prices for identical seats on the same flight. If the carrier could get the high rate for all products, or seats, of course he would and there would be no price discrimination.

The carrier's problem is he can not get the high rates on the low value products so he takes a lower rate on them. So long as the lower rate makes some contribution to overhead and profit it is a good rate for the carrier. If is also good for the shipper of the low rated material, which can get to market now, but without the low rate it probably could not. It is also good for the high rated shipper as the low rated product is covering some of the carrier's overhead, or common costs. To the extent the low rated traffic has a contribution margin, the high rated traffic does not have make that contribution, and everyone comes out ahead.

Price discrimination becomes a problem when the high rate payer convinces his politician that he should have the lower rate because if the carrier can give that guy the lower rate, I deserve the lower rate. This political logic has been the cause of untold economic harm to the railroads.

As to flavor of open access you pick the one you like.

Mac

Let's step back here for a moment and ask ourselves what justifies the existence of any business? It is to fill a customer's demand for a service or a product. If the customer is not being served to his satisfaction, then the business becomes subject to questions of why it should exists at all.

I do not understand this attitude railroaders have toward shippers. It's as if shippers are some kind of nuisance, like a fly that begs to be swatted, and if we could just get rid of these pests, railroading would ride the high line to glory.

Again, most rail shippers located on raillines at a time when rates were regulated, thus there was no thought toward site location of a plant in the vacinity of either two or more competing rail lines or a single line, the price differential was not that great. Then came along Staggers, which allowed extreme price discrimination without a corresponding pricing flexibility for shippers. That was followed by the mega-mergers, which went further to eliminate competitive rail access and created a whole new slew of captive shippers subject to a de facto monopoly setting. The effect has been twofold: Many shippers now have serious inflationary constraints to detract from their product competitiveness, and the monopolistic parameters have allowed service levels to suffer accordingly. The latter may be even more damaging than the former, since captive shippers and captive rail spinoffs have had a terrrible time trying to get the right cars ordered for thier needs in a timely fashion.

I think we will agree that it is better if rates are set by the market, not be government fiat. I would be opposed to any type of reregulation of railroads to facilitate the implementation of lower rates for captive shippers. However, if open access created a newly competitive rail rate setting based on market forces, why is that a bad thing?

As for which brand of open access, I prefer the separation of infrastructure from operations into separate private and private-public corporations, with a corresponding implementation of tax credits and other tax incentives to lower the capital costs, and a caveat that allows states and localities to invest in making capacity improvements to lines deemed vitatl by such authorities, and in allowing for new rail construction to meet future capcity demands. Under this scenario, I would even allow a portion of the highway trust fund to be used if it is based on a removal of trucks from highways to rails.

[dharmon]

QUOTE: Originally posted by jchnhtfd

..... But, of course, there are capacity limitations on the various lines; who is to decide who gets to run when? First come, first served? That's not the way it's done in the air, friends -- at any of the busier airports, there is a reservation system, and the airlines bid for slots -- so and so many planes per day, and no more. Is this a good system or a bad one? Hard to say, but it's the only one that works. And believe me, those slots aren't cheap. So we don't really have open access in the air, and we couldn't on the rails, either -- there are only just so many trains per day that can be run safely. OK. Back to square one. Now I also need the capital to bid for a slot on the line from East Overshoe to Long Beach. (maybe, one might say, the slots could be assigned by a lottery system, on a daily or monthly basis... so this day my two containers get the slot, and tomorrow the BNSF Maersk train, with two miles of containers, gets the slot (they sat in the yard today)).

So being the capitalist that I am, I set up Dan RR, LLC and though I have no locomotives or rolling stock, I bid for as many slots per month as I can, and then allow BNSF and UP et al, to use my slots for a tidy little profit to take advantage of this new openess.

[PNWRMNM]

Dave,

I can only tell you what my attitude toward shippers is. They are vital! They also, as a group constantly seek their "unfair advantage" and often expect the railroad to give it to them. The railroad, of course can not and should not, but that does nothing to stop the demands. They are not evil, just human.

Please expand on your private and public-private corporations. Also how do we get where you want to go from where we are? The fixed plant is the carrier's major asset remember.

Mac

[TH&B]

One real problem is how do we try open access? Someone will have to buy or build a rail coridor to do this.

[Anonymous]

QUOTE: Originally posted by dharmon

QUOTE: Originally posted by jchnhtfd

..... But, of course, there are capacity limitations on the various lines; who is to decide who gets to run when? First come, first served? That's not the way it's done in the air, friends -- at any of the busier airports, there is a reservation system, and the airlines bid for slots -- so and so many planes per day, and no more. Is this a good system or a bad one? Hard to say, but it's the only one that works. And believe me, those slots aren't cheap. So we don't really have open access in the air, and we couldn't on the rails, either -- there are only just so many trains per day that can be run safely. OK. Back to square one. Now I also need the capital to bid for a slot on the line from East Overshoe to Long Beach. (maybe, one might say, the slots could be assigned by a lottery system, on a daily or monthly basis... so this day my two containers get the slot, and tomorrow the BNSF Maersk train, with two miles of containers, gets the slot (they sat in the yard today)).

So being the capitalist that I am, I set up Dan RR, LLC and though I have no locomotives or rolling stock, I bid for as many slots per month as I can, and then allow BNSF and UP et al, to use my slots for a tidy little profit to take advantage of this new openess.

1. I believe there would have to be some sort of minimum requirements that would eliminate the jokers and speculators, that is a rather simple problem to fix. One simple caveat is to disallow transfer of slot rights for cash.

2. If a slot goes for a minimum of say $5,000, who in their right mind is going to put up that kind of money without making sure they have the carloads to cover it? The slot price would probably be based on prevailing train size and highest demand periods, in order to maximize the use of availbable capacity, e.g. no CargoSprinters here. Locals could be a problem, but then again not all capacity is being used all hours of the day, days of the week, etc. so they can be delegated time slots of low mainline usage One aspect of having local and state governments buying an interest in their local open access rails is to enable shortline access to those businesses that generate smaller numbers of carloads.

[Anonymous]

QUOTE: Originally posted by 440cuin

One real problem is how do we try open access? Someone will have to buy or build a rail coridor to do this.

You mean for experimental purposes? If so, I would nominate a current corridor which can interchange with more than one railroad on both ends (or has access to a deep water port), and currently has excess capacity.

UP's nee-SP's Modoc line would have been a good trial corridor. BCRail would have been ideal. MRL might work. Also, BNSF's Stampede Pass line, both BNSF and UP lines from Spokane to Pasco/Wallula (since the UP line is parallel to the BNSF line and has extra capacity), The I-15 corridor (UP from LA to Butte MT, BNSF/MRL to Sweet Grass via Great Falls).

There are also lines that are currently used by more than one railroad, e.g. Colorado's Front Range lines, Portland to Seattle, etc, which can serve as examples of slot cooperation.

[M636C]

Well, we do have open access in Australia, although how "open" it really is is a real question. First, some history is in order. Australia is a Federation of States, like the USA. Federation came well after railways, and rail infrastructure (and rolling stock and operation) was state owned. Even when we got the gauges to match at the state borders, the locomotives and crews changed.

In the 1990s privatisation began and operation of freight went to private operators. Initially the state operations were privatised and then we had a spate of take overs so that we ended up with one major operator, Pacific National (PN), and one slightly smaller, ARG. Except in Queensland where the gauge was different and so were the politics. Queensland Rail (QR) is still state owned and operated. PN have moved into Queensland after years of failed attempts to get the access that was supposedly open. The state gets millions of dollars from export coal traffic, and have so far stopped PN getting coal traffic contracts (and introducing price competition). Mean time QR have started their own competition with PN on the standard gauge, and have obtained some coal contracts with "QR National" in the other main export coal area, the NSW Hunter Valley. This is the big game now, and we are all watching. Through a loophole in a contract with a shipper, QR National ended up with some of PN's locomotives. This is a real record, because PN's locomotive disposals are worthy of Machiavelli, and nobody gets anything from PN.

National standard gauge infrastructure is being run by the Australian Rail Track Corporation, funded by the Federal government. This isn't a shock given that some government or other always owned it. Rail and the ARTC still don't get the sort of pork barrel funding roads have had for years, however.

There are, and have been small operators competing under "Open Access", but PN, as the successor to the Federal and State operations, is by a long way the strongest operator.

Peter

[Anonymous]

QUOTE: Originally posted by M636C

Well, we do have open access in Australia, although how "open" it really is is a real question. First, some history is in order. Australia is a Federation of States, like the USA. Federation came well after railways, and rail infrastructure (and rolling stock and operation) was state owned. Even when we got the gauges to match at the state borders, the locomotives and crews changed.

In the 1990s privatisation began and operation of freight went to private operators. Initially the state operations were privatised and then we had a spate of take overs so that we ended up with one major operator, Pacific National (PN), and one slightly smaller, ARG. Except in Queensland where the gauge was different and so were the politics. Queensland Rail (QR) is still state owned and operated. PN have moved into Queensland after years of failed attempts to get the access that was supposedly open. The state gets millions of dollars from export coal traffic, and have so far stopped PN getting coal traffic contracts (and introducing price competition). Mean time QR have started their own competition with PN on the standard gauge, and have obtained some coal contracts with "QR National" in the other main export coal area, the NSW Hunter Valley. This is the big game now, and we are all watching. Through a loophole in a contract with a shipper, QR National ended up with some of PN's locomotives. This is a real record, because PN's locomotive disposals are worthy of Machiavelli, and nobody gets anything from PN.

National standard gauge infrastructure is being run by the Australian Rail Track Corporation, funded by the Federal government. This isn't a shock given that some government or other always owned it. Rail and the ARTC still don't get the sort of pork barrel funding roads have had for years, however.

There are, and have been small operators competing under "Open Access", but PN, as the successor to the Federal and State operations, is by a long way the strongest operator.

Peter

Peter,

How is the transportation infrastructure funded in Australia? Do roads and rails have the same funding mechanisms such as fuel taxes, user fees, etc.? Does the ARTC assign slots to the various operators, or does it basically revolve around PN's operations? Is the new Darwin line an open access line?

[Anonymous]

Someone mentioned on another thread the idea of having the Corps of Engineers be in charge of constructing new rail links to supplement the current rail grid. Since the likelyhood of an expansion of the nation's waterways is highly unlikely, it would be logical for the Corps to supplement their waterways with an expansion into the rail spectrum.

One such logical rail link project would be a rail link from Lewiston ID to Missoula MT, connecting the easternmost point of the Columbia/Snake River waterway with direct eastern rail access. Since Corps transportation projects are all open access, they would have to incorporate this attitude into any new rail projects. The Lewiston-Missoula rail link would have UP and BNSF on the western end (via Watco's GNR), and MRL (along with trackage rights MRL has given BNSF) on the eastern end. The question then is if UP can (or would want to) access this rail link from Butte via the former Montana Western (now owned by BNSF), but other than that the open access caveat should be easily adhered to for this project.

It would represent the perfect trial concept for open access.

[Anonymous]

I’ve been told that transcontinental stack trains are, or were, operated by shipping companies so there’d be no delays in Chicago. Anyone know if this is true? I thought customers who regularly shipped full train loads could rent the right of way if it was worth it to them.

A shipper operated train would have to operate as a railroad operated train except at interchanges where it could run through. Would that be so bad?