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Blackstone Group Launches Takeover Bid Of KCS

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Posted by azrail on Sunday, September 6, 2020 10:06 PM

The government does'nt have enough money to buy the National rail syste, and they didn't do so well during WW I 

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Posted by Overmod on Sunday, September 6, 2020 1:23 PM

charlie hebdo
I proposed payment, not just compensation.  Then we might get better ROWs and electrification where traffic is sufficient. 

The far likelier scenario, all the way back to the mid-'20s, has been something like a transfer of either running infrastructure or full lease-like operating rights as a kind of analogue of PILOT in real estate: a substantial and 'guaranteed as far as possible' reduction of taxes -- here Federal taxes, perhaps including also various current requirements on railroad contribution to Federally-mandated special agencies like RRB -- equivalent to the TVM fair market value of that infrastructure.

This would not necessarily include more than the track and easements to access it (including drainage arrangements); it would in particular leave the fiber-optic, pipeline collocation, etc. rights in private hands if desired.  Note that it leaves actual "government" money involvement minimized, so all actual 'cost to the government' goes into improvement, not acquisition.

Electrification plans as progressive buildout in conjunction with private 'grid' distribution improvement has been thoroughly hashed out at EPRI alone; any expansion as a targeted 'stimulus' or 'employment creation' incentive could easily be developed with a minimum of expensive new 'consultant fees'.

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Posted by charlie hebdo on Sunday, September 6, 2020 1:08 PM

I proposed payment, not just compensation.  Then we might get better ROWs and electrification where traffic is sufficient.  The railroads would have a ton of money to use on new equipment.  Any agreement would require that,  not declare huge dividends to stockholders. Time to move into the 1980s at least,  if not into the future. 

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Posted by Overmod on Sunday, September 6, 2020 12:56 PM

PNWRMNM
blue streak 1

How about this for open access ?  RR ABC transfers track and ROW to govt entity at no cost. 

How 'bout we call that what it is - outright theft of billions of dollars worth of private property?

How could that possibly be 'what it is'?  He called for a voluntary donation of that billions of dollars of property.

I'll grant you it's as improbable as the pretext for Bellamy's Looking Backward, and no railroad board of directors would sanction such a thing without considerable additional concessions or compensation... but wait until someone proposes something like "nationalization" before gearing up the ire.

Even the government 'takeover' to Federal Control didn't involve confiscation of the real estate!  Think of the compensation amounts if they had ... not that it couldn't have been arranged with a more protracted abusive 'liberty bond' campaign into the horror of a war in 1919.

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Posted by alphas on Sunday, September 6, 2020 12:03 PM

Rather than first going the government ownership route, I'd change the laws to exempt RR right-of-ways and whatever is attached to it such as signals, protective fencing, bridges, tunnels, etc. from all property taxes.    Tell the states and local governments that if they don't go along with this, they'll lose the tax revenue anyway as the Federal government will assume ownership of what RR property exists.   I know in PA that tax exemption is the major component for the RR's owned by local Government established Authorities under PA law.   Then I'd also change Federal Tax law to let the RR's immediately expense all construction & maintenance to their physical plants.

I would only consider having the Federal Government assume ownership of the physical plant if the RR's still couldn't make it work after doing those 2 things.


 

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Posted by Los Angeles Rams Guy on Sunday, September 6, 2020 11:26 AM

jeffhergert

The truly "tragic" thing (I guess) about the UP fiasco is that, when I was a kid, UP was the kind of RR that one truly looked up to when it came to excellence and how a RR should be run.  Remember my very first time when I was on the UP's portion of the Overland Route in Nebby as a 14-year old kid and I was just blown away.  It's no wonder that UP was CNW's exemplar for so many years.  It's just sad when I see what's happening now and I hope you guys can ride this storm out without too much damage being done.

But I don't want to veer too far off topic here and get back to KCS.  I won't lie to you.  The one thing that I want to see more than anything is a CPRS - KCS combination simply because it makes the most sense and it would finally give CPRS an even footing with arch-rival CN.  The other thing is that I think that a combination like CPRS + KCS wouldn't necessarily have to trigger the final round of mergers amongst the Class Is.  Now, there may be some concessions that would have to be made and I'm not exactly sure how the Meridian Speedway partnershipt that KCS and NS have would factor in but I think that if you're CPRS, there may not be another opportunity that's as golden as this to make that big move and I also think that Keith Creel wants to find a way to cement his legacy at CPRS as well.       

 

 

 
SD70Dude

Jeff, is it true that they fired a whole bunch of Dispatchers yesterday?

 

 

 

I couldn't say, I've been on vacation the last few weeks.  Go back on Monday.

On UP, dispatchers are management.  They have been consolidating dispr's territories over the system and they are supposed to be rolling out some new CAD on steriods system.  They probably think they won't need so many dispatchers in the future.

Jeff 

 

 

 

The Trains' newswire says 60 dispatchers were let go.  A source on a Facebook group said 107 have gotten the axe.  For now.   

Being management, they weren't let go by seniority.  One who posted on that FB group had 24 years in as a dispatcher. (I'm not sure, but he may have been one that dispatched a portion of my work area.)  Another had 8 years in.

One hump at North Platte is going to be shut down.  All this is PSR and the goal of a 55% OR.  

Forget how the KCS might be divided up.  Let's decide how the UP might be divided up when the bubble eventually bursts and the house of cards falls. 

Jeff 

 

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Posted by zugmann on Sunday, September 6, 2020 9:22 AM

BaltACD
Nobody on Wall Street is going to let any railroad that trades stock to 'give' their physical plant to any entity, government or others without those getting the plant paying real money for it.

I think they'd jump at it.  They're already trying to get rid of everything physical - think of the operating ratio if all they had to do was run trains and let someone else do the boring infrastructure part?  

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by PNWRMNM on Sunday, September 6, 2020 8:04 AM

blue streak 1

How about this for open access ?  RR ABC transferes track and ROW to govt entity at no cost. 

How bout we call that what it is - outright theft of billions of dollars worth of private property.

Mac

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Posted by BaltACD on Saturday, September 5, 2020 11:21 PM

jeffhergert
 
jeffhergert 
SD70Dude

Jeff, is it true that they fired a whole bunch of Dispatchers yesterday? 

I couldn't say, I've been on vacation the last few weeks.  Go back on Monday.

On UP, dispatchers are management.  They have been consolidating dispr's territories over the system and they are supposed to be rolling out some new CAD on steriods system.  They probably think they won't need so many dispatchers in the future.

Jeff 

The Trains' newswire says 60 dispatchers were let go.  A source on a Facebook group said 107 have gotten the axe.  For now.   

Being management, they weren't let go by seniority.  One who posted on that FB group had 24 years in as a dispatcher. (I'm not sure, but he may have been one that dispatched a portion of my work area.)  Another had 8 years in.

One hump at North Platte is going to be shut down.  All this is PSR and the goal of a 55% OR.  

Forget how the KCS might be divided up.  Let's decide how the UP might be divided up when the bubble eventually bursts and the house of cards falls. 

Jeff 

I wonder if or how 'New York Dock' guarantees will work for those let go?

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Posted by tree68 on Saturday, September 5, 2020 10:29 PM

blue streak 1
  RR ABC transferes track and ROW to govt entity at no cost.

Probably the single biggest sticking point in previous discussions.

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Posted by jeffhergert on Saturday, September 5, 2020 10:17 PM

jeffhergert

 

 
SD70Dude

Jeff, is it true that they fired a whole bunch of Dispatchers yesterday?

 

 

 

I couldn't say, I've been on vacation the last few weeks.  Go back on Monday.

On UP, dispatchers are management.  They have been consolidating dispr's territories over the system and they are supposed to be rolling out some new CAD on steriods system.  They probably think they won't need so many dispatchers in the future.

Jeff 

 

The Trains' newswire says 60 dispatchers were let go.  A source on a Facebook group said 107 have gotten the axe.  For now.   

Being management, they weren't let go by seniority.  One who posted on that FB group had 24 years in as a dispatcher. (I'm not sure, but he may have been one that dispatched a portion of my work area.)  Another had 8 years in.

One hump at North Platte is going to be shut down.  All this is PSR and the goal of a 55% OR.  

Forget how the KCS might be divided up.  Let's decide how the UP might be divided up when the bubble eventually bursts and the house of cards falls. 

Jeff 

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Posted by kgbw49 on Saturday, September 5, 2020 10:11 PM

If I recall correctly KCS received a 50-year concession to operate the KCS de Mexico that started in 1997 or so. That would mean it has 27 years to go unless they received an extension.

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Posted by JPS1 on Saturday, September 5, 2020 10:08 PM
If the government owns it, politics frequently trumps sound economics and finance.  One need look no further than the highway system to see the pervasive impact of politics.  The annual highway bill is laced with pork barrel spending and politically influenced projects.    
 
A better option would be to have an independent, private entity own the infrastructure and regulate it as a public utility like the poles and wires of an electric utility.  In Texas, as well as 14 other states and D.C., electric generation and retail services are open to competition and choice, but the transmission and distribution systems are regulated by the Public Utility Commission.  Although the commissioners in Texas, at least, are political appointees, the regulatory process is relatively free of political tinkering.   
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Posted by BaltACD on Saturday, September 5, 2020 10:00 PM

blue streak 1
How about this for open access ?  RR ABC transferes track and ROW to govt entity at no cost.  ABC pays no toll but each trip is billed by ton miles, load conditions, flat wheels, etc.  That billing is used to reduce the cost of acquisition.  Once evened out then ABC pays normal toll.  Any other RR that wants to operate on the previous ABC track will have to pay toll amounts + some  additional preminum.  That includes any reroutes for other RRs.operatin on that track.  Govt would maintain track to whatever class that is desired for passenger travel.  

Track charges and restrictions could be each cars weight, limit train length to siding capacity, any breakdown time tying up RR ( applies to both Amtrak failures, broken drawbars/knuckls, etc ).  Any shutdowns to RR due to grade crossing accidents charged to culprit payable directly to govt entity and damaged  equipment owner not to federal treasury as is now.  If track capacity starts to be exceeded govt adds capacity quickly with pre EISs.  Other  RRs that wants to operate on ABCs track have to pay some premimum and will have to pay for expansion if present capacity will be exceeded.

Nobody on Wall Street is going to let any railroad that trades stock to 'give' their physical plant to any entity, government or others without those getting the plant paying real money for it.

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Posted by blue streak 1 on Saturday, September 5, 2020 9:52 PM

How about this for open access ?  RR ABC transferes track and ROW to govt entity at no cost.  ABC pays no toll but each trip is billed by ton miles, load conditions, flat wheels, etc.  That billing is used to reduce the cost of acquisition.  Once evened out then ABC pays normal toll.  Any other RR that wants to operate on the previous ABC track will have to pay toll amounts + some  additional preminum.  That includes any reroutes for other RRs.operatin on that track.  Govt would maintain track to whatever class that is desired for passenger travel.  

Track charges and restrictions could be each cars weight, limit train length to siding capacity, any breakdown time tying up RR ( applies to both Amtrak failures, broken drawbars/knuckls, etc ).  Any shutdowns to RR due to grade crossing accidents charged to culprit payable directly to govt entity and damaged  equipment owner not to federal treasury as is now.  If track capacity starts to be exceeded govt adds capacity quickly with pre EISs.  Other  RRs that wants to operate on ABCs track have to pay some premimum and will have to pay for expansion if present capacity will be exceeded.

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Posted by JPS1 on Saturday, September 5, 2020 9:24 PM
Amtrak owns 80 percent of the 457-mile NEC or approximately 366 miles of the total distance.  New York State, the Connecticut Department of Transportation and the Massachusetts Bay Transportation Authority own the remaining parts.
 
Amtrak pays rents to use the portion of the NEC that it does not own.  The commuter railroads pay rents to use the portion of the NEC Amtrak owns.  If I remember correctly, the NEC hosts more commuter trains than Amtrak trains.  In any case, due in part to the shared ownership, figuring out who owes who and how much is a workfare program for accounting clerks.
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Posted by BaltACD on Saturday, September 5, 2020 7:41 PM

Gramp
Isn't the NEC somewhat open access already?  All govt. ROW ownership in one form or another. Different passenger entities. Some freight, different operators. Resulting in lots of contention over what should be done, who should pay for it. 

The NEC is Amtrak owned.  Amtrak, despite the subsidies, is not the government.  Amtrak operates as a private entity and according to its creating and sustaining legislation is supposed to be profitable as a private entity.

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Posted by Gramp on Saturday, September 5, 2020 6:06 PM

Isn't the NEC somewhat open access already?  All govt. ROW ownership in one form or another. Different passenger entities. Some freight, different operators. Resulting in lots of contention over what should be done, who should pay for it. 

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Posted by tree68 on Saturday, September 5, 2020 4:50 PM

charlie hebdo
As I said,  I never saw his posts but at least some responsibility for that acrimony must reside with those who disagreed with him. 

Absolutely.

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Posted by charlie hebdo on Saturday, September 5, 2020 4:10 PM

tree68

 

 
charlie hebdo
Tree: I  never saw anything from Futuremod,  but invoking his name doesn't mean an idea is wrong. 

 

FM became something of a lightning rod.  He was very adamant that open access was the way to go, almost to a fault.  Actually, to a fault, as it eventually got him booted off the forum.  There basically developed three sides, pro (mostly FM), con (his most vocal opponents on the concept), and those who basically took the middle road.

Invoking his name only applies to the acrimony that developed, not the concept.  

 

As I said,  I never saw his posts but at least some responsibility for that acrimony must reside with those who disagreed with him. 

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Posted by tree68 on Saturday, September 5, 2020 2:37 PM

charlie hebdo
Tree: I  never saw anything from Futuremod,  but invoking his name doesn't mean an idea is wrong. 

FM became something of a lightning rod.  He was very adamant that open access was the way to go, almost to a fault.  Actually, to a fault, as it eventually got him booted off the forum.  There basically developed three sides, pro (mostly FM), con (his most vocal opponents on the concept), and those who basically took the middle road.

Invoking his name only applies to the acrimony that developed, not the concept.  

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Posted by charlie hebdo on Saturday, September 5, 2020 2:17 PM

jeffhergert

 

 
charlie hebdo

Jeff: Perhaps I wasn't clear.  By operating only,  I am proposing that the rails become verically integrated transportation companies (rail, truck,  etc.) along the lines of what greyhounds has suggested they should have been allowed to  do many years ago.  They would not be just hauling cars around on rails.  They could go anywhere in the US,  by whatever routes,  door to door.  More efficient  and more profitable. 

 

 

 

They had that years ago.  Many had trucking subsidiaries to extend their reach and/or serve branch lines by road instead of rail.  They all got out of it.  They don't need government right of ways or open access to do this. 

And I agree that they should become integrated transportation companies, too.  They should have their own, not contracted or a partnership, trucking arms to get traffic.  Not very likely in this PSR era.  They want the business to come to them.

Jeff 

 

Yes,  they had trucking and got out of it because their rates were not competitive,  or so greyhounds has said and he should know. 

Tree: I  never saw anything from Futuremod,  but invoking his name doesn't mean an idea is wrong. 

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Posted by tree68 on Saturday, September 5, 2020 12:14 PM

Psychot

I would think open access has the potential to increase carload traffic. Freed from the responsibility of maintaining infrastructure, smaller operators could go out and solicit carload business on the national network to fill niches the bigger companies don't want to touch. This could propagate the "shortline mentality" across the broader rail network.

You're getting into FutureModal terrritory there.

That said, I agree that open access could work.  The usual sticking point in that discussion has almost alway been acquisition of the ROWs and fair compensation therefore.

The network would become a collection of toll roads - pay by the axle/mile.

Control would be akin to air traffic control - really no different than what is used now.  Access would be via time slots, similar to flight plans.  

Operators would be akin to the trucking industry, ranging from mega-outfits (J.B. Hunt, etc, the  current Class 1's.  There might be regional outfits, catering to specific needs (like a short-haul rock train, f'rinstance).  And you might have "gypsies" - independent operators willing to take any road.

Just like truck drivers and airline pilots, the crews would have to be somehow certified.  This would be greatly helped by the standardization of the signal system.  Hate to see those old CPLs go on the former B&O, but...  

At this point, however, it's all a pipe dream, and such a huge paradigm shift that may can't wrap their heads around it.

I doubt I'll ever see it.

 

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Posted by jeffhergert on Saturday, September 5, 2020 12:05 PM

Psychot

I would think open access has the potential to increase carload traffic. Freed from the responsibility of maintaining infrastructure, smaller operators could go out and solicit carload business on the national network to fill niches the bigger companies don't want to touch. This could propagate the "shortline mentality" across the broader rail network.

 

There's only going to be so many slots on the main routes available.  You will have no trouble finding small operators for places the big guys don't want, but you might have trouble connecting between them.  

Public ownership is also different from open access.  Of course, public ownership will have open access to routes and customers.  Operating companies will have access slots, just like airlines have at airports. 

Open access means BNSF can access customers on UP and vice-versa.  Either by direct access or the track owner providing the actual pull/spot and turn the car over at the first interchange for a flat fee.

Open access would probably be better for retaining what car load traffic remains.  Public ownership would favor large volume routes running intermodal and bulk unit trains.  If public ownership only pertains to the trunk routes and short lines and branches are allowed to be privately owned, it may be possible for car load to survive.  It depends if an operating only company wants to handle manifest trains between A and Z.  They won't want to operate switching yards to aggregate traffic brought to them from short lines, but may be willing to take a train made up by someone else.  It could lead to private switch yards at A and Z, but I think it's still going to short change a lot of traffic that is between A and Z.

I have thought that to save the industry, the class ones should become mostly line haul companies.  Keeping their main routes and selling or leasing their branches to short lines/regionals who want to serve customers.  (It's what CSX seems to be doing.)  You don't need Open Access or Public Ownership for that.

Jeff

  

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Posted by jeffhergert on Saturday, September 5, 2020 11:37 AM

charlie hebdo

Jeff: Perhaps I wasn't clear.  By operating only,  I am proposing that the rails become verically integrated transportation companies (rail, truck,  etc.) along the lines of what greyhounds has suggested they should have been allowed to  do many years ago.  They would not be just hauling cars around on rails.  They could go anywhere in the US,  by whatever routes,  door to door.  More efficient  and more profitable. 

 

They had that years ago.  Many had trucking subsidiaries to extend their reach and/or serve branch lines by road instead of rail.  They all got out of it.  They don't need government right of ways or open access to do this. 

And I agree that they should become integrated transportation companies, too.  They should have their own, not contracted or a partnership, trucking arms to get traffic.  Not very likely in this PSR era.  They want the business to come to them.

Jeff 

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Posted by Psychot on Saturday, September 5, 2020 11:19 AM

I would think open access has the potential to increase carload traffic. Freed from the responsibility of maintaining infrastructure, smaller operators could go out and solicit carload business on the national network to fill niches the bigger companies don't want to touch. This could propagate the "shortline mentality" across the broader rail network.

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Posted by Gramp on Saturday, September 5, 2020 8:04 AM

There are plenty of "public utilities" that are privately owned. Far more effective to have government be a referee rather than a player. 

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Posted by charlie hebdo on Saturday, September 5, 2020 8:00 AM

Jeff: Perhaps I wasn't clear.  By operating only,  I am proposing that the rails become verically integrated transportation companies (rail, truck,  etc.) along the lines of what greyhounds has suggested they should have been allowed to  do many years ago.  They would not be just hauling cars around on rails.  They could go anywhere in the US,  by whatever routes,  door to door.  More efficient  and more profitable. 

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Posted by Juniata Man on Saturday, September 5, 2020 7:50 AM

To address Jeff's concerns regarding open access, I offer the example of Canadian interswitching.

Under interswitching, each interchange point lies at the center of three concentric interswitching zones that radiate out to 35 kilometers (analogous to a shooting target). A shipper located within one of those zones, may contract with a railroad other than the one physically serving his plant site.

The carrier physically serving the site is paid a zone switching charge by the carrier handling the linehaul. The zone switching charge is set by the Canadian Transport Agency.  

The shipper can negotiate linehaul rates with both the carrier physically serving his site and the second more distant carrier then contract with the carrier he chooses.  If the distant carrier is selected, their rate includes the applicable zone interswitching charge.

This option has been available to about 70% of Canadian rail shippers since 1986 and has not resulted in the death of the Canadian Class 1's. In fact, despite having to compete for a substantial portion of their traffic, both CN and CP have been darlings of Wall Street. 

I used interswitching extensively at two of our three Canadian production sites and found it to be a valuable tool to keep your railroad partners focused on your business.  

Curt

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Posted by zugmann on Friday, September 4, 2020 10:01 PM

jeffhergert
The origin/destination points for SEDA-COGJRA and PNRRA freight in a open access world may have carriers that don't want that business.  In a public ownership world, those points may not have any rail service at all.     

They have contracted operators (some may be owned wholly/partially by the relevant authorities).  PA gov't stuff is not for the faint of heart. 

But in the private ownership world, the lines were slated for abandonment by Conrail when they went private. At least on the SEDA-COG side. So I think they fared better with some gov't interference.   

 

Nobody is saying gov't ownership is going to be 100% perfect.  But hell, neither is private ownership.   Accirding to plenty of news reports there are a whole lot of pretty ticked off shippers keeping lawyers' boats and mistresses paid off by penning letters to the STB lately. 

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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