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BNSF shuttle grain trains, Does this mean that BNSF does not want to serve small elevators?

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BNSF shuttle grain trains, Does this mean that BNSF does not want to serve small elevators?
Posted by Anonymous on Thursday, June 23, 2005 10:58 AM
BNSF lists numerous Grain Train Shuttles on there scedules. I assume the BNSF wants to haul unit trains only. This was a problem in Canada were CN was cutting out service to small Silo operaters in Alberta. If someone wants two or 3 cars set out on there silo will BNSF serve them?. Right now there is 2 grain cars parked in Kennedy NY at Agway but they are served by a shortline.
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Posted by arbfbe on Thursday, June 23, 2005 11:06 AM
BNSF does not want to serve small anythings. The discount for shippers using the shuttle services is about $300 in many locations, that makes it hard for the smaller elevators to be competitive. Depending upon where BNSF supports construction of a shuttle elevator it can decimate all smaller elevators in quite an area. All that investment by smaller companies, co-ops and farmers wiped out by a couple of large American conglomerates.
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Posted by CSSHEGEWISCH on Thursday, June 23, 2005 11:40 AM
The expense of serving small elevators that generate only a handful of cars at a time only once or twice a week is proportionally higher than serving a larger elevator that generates 25+ cars at a time daily. Smaller elevators that are generating truck-size loads are probably better served by truck. BNSF is basically giving volume discounts similar to just about any business in any line of work.
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Posted by greyhounds on Thursday, June 23, 2005 11:51 AM
Increasingly, it seems the railroads are developing a business strategy that consists of running solid trains of containers, trailers, grain, whatever from point to point.

This is far more efficient than traditional carload railroading. It makes sense. Serving small country grain elevators has always been inefficient. Equipment utilization is terrible and the cost of terminal handling (locals, endless switching into blocks, etc.) drives expenses through the roof.

Railroads have to compete for capital in a world maket. Obtaining financing for grain cars has to compete with obtaining financing for a shirt factory in China. The investment will go to the most productive use. There is absolutely no way any corporate or government action can realistically change this.

It's not a question of the BNSF not "wanting" to do something. It doesn't matter what they "want" to do. It's a question of what they have to do to remain competitive for investment funding.

BNSF investors will get a better return on shuttle operations than they will on individual carload shipments. If BNSF would try to pay these investors less in order to serve the carload markets, the investors would go elsewhere. Would you rather see them invest in the US or China? If the government tries to force the BNSF to serve the inefficient small grain elevator market, they'll drive the railroad into the ground. It won't be able to attract investment and China will get a new shirt factory.

You can't take pain out of the economy. Trying to do so will just make things worse over time. It's a sad thing that some people will loose money on investments they made in inefficent grain terminal facilities. But making business investments is no guarantee of success. Profit is a reward for risk, and sometimes the risk goes against the investor. And there is absolutely no way to change that. None.
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Posted by Anonymous on Thursday, June 23, 2005 12:24 PM
But is this legal? Under Common carrier obligations the railroad has to traet everyone the same. Its just that the farmers dont knwo this and cant afford to hire a law firm to figure this out. Effeciant? What about all those trucks going all over the place to pick up grain from the small elevaters
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Posted by gabe on Thursday, June 23, 2005 12:41 PM
QUOTE: Originally posted by greyhounds

Increasingly, it seems the railroads are developing a business strategy that consists of running solid trains of containers, trailers, grain, whatever from point to point.

This is far more efficient than traditional carload railroading. It makes sense. Serving small country grain elevators has always been inefficient. Equipment utilization is terrible and the cost of terminal handling (locals, endless switching into blocks, etc.) drives expenses through the roof.

Railroads have to compete for capital in a world maket. Obtaining financing for grain cars has to compete with obtaining financing for a shirt factory in China. The investment will go to the most productive use. There is absolutely no way any corporate or government action can realistically change this.

It's not a question of the BNSF not "wanting" to do something. It doesn't matter what they "want" to do. It's a question of what they have to do to remain competitive for investment funding.

BNSF investors will get a better return on shuttle operations than they will on individual carload shipments. If BNSF would try to pay these investors less in order to serve the carload markets, the investors would go elsewhere. Would you rather see them invest in the US or China? If the government tries to force the BNSF to serve the inefficient small grain elevator market, they'll drive the railroad into the ground. It won't be able to attract investment and China will get a new shirt factory.

You can't take pain out of the economy. Trying to do so will just make things worse over time. It's a sad thing that some people will loose money on investments they made in inefficent grain terminal facilities. But making business investments is no guarantee of success. Profit is a reward for risk, and sometimes the risk goes against the investor. And there is absolutely no way to change that. None.


Greyhounds,

Interesting analysis; I certainly can't disagree with it.

However, I think the "pain" of the current economic trend of "super sizing" is even more painful than most realize. In the past, it took a lot less money to put one's energy and resources into a small business venture—like a 10-car grain elevator. The percentage of Americans with that much money was fairly broad and the avenue from middle class to bourgeois was attainable to those with luck, skill, dedication, and intellect. Under the consolidated super sized paradigm, the amount of people who have enough money to start a grain elevator capable of handling 110 BNSF shuttle car elevator—or other consolidated industries—are considerably less than it took to start such a business in the past.

Because American industry in general seems to be following this trend, avenues toward wealth are being constricted. It is not simply a scenario of the rich getting richer. It is a scenario of the extinction of American upward mobility, which is the hallmark of the American economy and is why the American economy is renowned for reinventing itself. I think this will not only lead to permanent class divisions but will hinder the ability of the American economy to apply its entrepreneurialism in an effective manner.

Nonetheless, I think you are right. It just kills me to know that you are.

Gabe
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Posted by gabe on Thursday, June 23, 2005 12:54 PM
On a related side note, did anyone happen to notice the Supreme Court holding today saying that cities may condem property to attract private industry? Yet another blow against the little guy. This one is going to be bad.

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Posted by MP173 on Thursday, June 23, 2005 1:14 PM
Gabe:

DIdnt see the Supreme Court ruling, but in my opinion, it is really a bad ruling. I had a customer in Des Plaines, Il which was not a glamorous company. They are a leasing company of trailers. In fact, they are HUGE. One day I stopped in and they said they were moving. It seems as if Des Plaines condemned their property to build a hotel.

Granted, this property was adjacent to I 90 and close to O'Hare and was no doubt valuable...but what gives them the right to do so? BTW...the trailer leasing company is no poor small company, it is owned by Warren Buffet's Berkshire Hathaway.

Now, regarding the small elevator issue....Greyhound and Gabe, you will appreciate this one. Back in the day, I recall the IC line thru town would stop and switch boxcars of grain at the next town north (West Liberty, Il).

Imagine how far we have progressed...BOX CARS of grain!

ed
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Posted by Mookie on Thursday, June 23, 2005 1:16 PM
Gabe - I heard it on the news and just shook my head.

One bright spot - that muddy feathers can probably explain better - City of Lincoln vs a lumber company for what would have amounted to eminent domain.

City 0 lumber company - 1

Moo

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Posted by gabe on Thursday, June 23, 2005 1:53 PM
Mookie:

That is really encouraging to see it doesn't all go that way. But, my heart really goes out to all of those people who are going to lose their homes--not businesses--not for the direct public good, but another Mega store can move in. Some of the homes had been in the family for quite some time. I can't imagine how hard it would be to lose your home in such a circumstance. I am geniunely sad for them.

MP-173:

I do like the boxcar bit. My father worked at a grain elevator in his youth and described how much he preferred actual grain cars to box cars, as sometimes they would actually have to shovel the grain inside the box car to create more room for the grain.

Thanks,

Gabe
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Posted by greyhounds on Thursday, June 23, 2005 2:02 PM
QUOTE: Originally posted by Peterson6868

But is this legal? Under Common carrier obligations the railroad has to traet everyone the same. Its just that the farmers dont knwo this and cant afford to hire a law firm to figure this out. Effeciant? What about all those trucks going all over the place to pick up grain from the small elevaters


Of course it's legal. And farmers aren't ignorant. And they have lawyers. And farmers are going through this same process. My father worked 160 acers in central Illinois. That was what one man could handle. Today, that would be a "hobby farm". (disclaimer: I did not grow up on a farm, he was evicted the year I was born and I grew up in a small town.) The farms have gotten much larger, along with the equipment. The government can not pass a law that changes economics, just as they can not pass a law that water will run up hill.

As for the trucks, the economics of truckload transporation are very different from carload transportation. With trucks the unit of sale equals the unit of production. There is no need to aggregate sale units into production units. With carload there is an absolute need to aggregate the units of sale (carloads) into units of production (trainloads). There is also a need to break down trainloads of empties and distribute the cars for loading. As I said, this just destroys equipment utilization and drives up costs. These factors are not present in truckload.

So smaller facilities are more efficiently served by trucks.

And yes, I remember the C&IM spotting boxcars for grain loading at the elevators in Manito, IL. It's where I received my first lesson in just how inefficient that sort of thing is. The agent was muttering to himself about the grain company not ordering any cars for six months, then wanting "everthing" right away.

I actaully saw this guy get on the phone with the dispatcher, get the OK, then flag down a southbound extra. I mean he was out there waving a red flag. They stopped and switched out every empty boxcar on the train. Just grabbed 'em off the train. So much for equipment utilization planning.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by SALfan on Thursday, June 23, 2005 4:03 PM
QUOTE: Originally posted by greyhounds



Of course it's legal. And farmers aren't ignorant. And they have lawyers. And farmers are going through this same process. My father worked 160 acers in central Illinois. That was what one man could handle. Today, that would be a "hobby farm". (disclaimer: I did not grow up on a farm, he was evicted the year I was born and I grew up in a small town.) The farms have gotten much larger, along with the equipment. The government can not pass a law that changes economics, just as they can not pass a law that water will run up hill.



My brother put it very well last week, and I believe his quantities are about right. In the 1910's a farmer could make a decent living for his family on 40 acres. In the 1970's it took 400 acres to provide a decent living for a family. Now it takes 4000.

To put it another way (I may be slightly off with these figures, but you get the idea): In 1948, Yazoo County Mississippi had 48,000 people; in 1990, it had 21,000 people. Most farmers didn't get tractors until just before or after World War II, so the vast decrease in the number of field hands and tenant farmers didn't really hit until after WWII. You can see the effect in the population changes in Yazoo County.
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Posted by bobwilcox on Thursday, June 23, 2005 4:46 PM
QUOTE: Originally posted by Peterson6868

But is this legal? Under Common carrier obligations the railroad has to traet everyone the same. Its just that the farmers dont knwo this and cant afford to hire a law firm to figure this out. Effeciant? What about all those trucks going all over the place to pick up grain from the small elevaters


Railroads still have a common carrier obligation. If I call the Buckingham Branch today and say I want to ship a car of grain from Crozet to East Budda, TX they and their conections must move the car. Although they can not refuse to provide service I must pay them the rate they want for their service. In addition they will expect me to supply the covered hopper.
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Posted by Anonymous on Thursday, June 23, 2005 7:51 PM
RE: The recent Supreme Court Ruling - Don't forget your railroad history. When the railroads were building West in the late 1800's and early 1900's, they were granted the right of Eminent Domain to allow the ROW across established private property.

This is nothing new.

RE: Unit vs carload shipments - Everything Greyhounds says is true, but in the larger picture it is possible to have a reverse macro effect. We've already hashed out the question of whether it is more "efficient" to move grain from a country elevator to a unit train terminal via truck or whether it would be more efficient to move that grain from country elevator to unit train terminal by shortline railroad. There are real world examples of shortlines being able to beat trucker's shorthaul rates in this scenario (aka Watco's opertations in the PNW). So in that vein the Class I's will participate in carload grain movements vicariously via their shortline "partners" (or shortline "slaves" depending on your particular POV).

Depending on the infrastructure characteristics of a certain grain moving corridor, it is probable that shorthaul railroad companies could easily compete with truckers for carload quantities IF they could access the Class I property to get to those smaller elevators. This was one of the points made in the open access discussions, that smaller players would go after the business rejected by the Class I's if they had access to the property.

Unit train dynamics are more efficient than carload dynamics, yet carload dynamics are (usually) more efficient than truckload dynamics. Thus, it is possible to have situations in which the combination of truckload hauls plus unit train hauls would be LESS efficient than carload hauls that come in 10's, 5's, or sometimes even single lots over the same corridors (from farm to port). So when Gabe bemoans the loss of individualized services, he's not just being nostalgic.
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Posted by broncoman on Thursday, June 23, 2005 9:05 PM
I am born and raised in the central valley of CA, so I am curious as to the "stranded" grain elevators of the midwest. There are some fairly large farms still left in the greater sacramento area but it seems that they truck the grain to a siding where it is transferred to anywhere from 2-6 cars. There are still bigger elevators around I would say you wouldn't have to go more than 60-80 mi to go from one to another from Redding almost all the way down to Los Angeles. Is this scenerio different from the midwest? I am just curious as to the scope. I am sure the distances between "train load" elevators is substantial. And out of curiosity what is the standard "train load", 30-50 cars?

Thanks for the info.
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Posted by gabe on Friday, June 24, 2005 9:07 AM
QUOTE: Originally posted by futuremodal

RE: The recent Supreme Court Ruling - Don't forget your railroad history. When the railroads were building West in the late 1800's and early 1900's, they were granted the right of Eminent Domain to allow the ROW across established private property.

This is nothing new.


I wish you were right; but you are not. This is a substantial departure from previous practice.

Yes, railroads have used the power of eminent domain for centuries in this country. However, there is a fundamental difference between railroads and the cases now allowed by our Supreme Court.

One, of course, may argue that there is no difference between the public interest served by Wal-Mart and the public purpose served by Union Pacific. Legally, at least, it is recognized that railroads serve a direct public benefit and would not be possible to run without the use of eminent domain. In any event, the restriction to things like reservoirs, railroads, highways, etc. substantially limited the power of eminent domain in the past. No more.

Now, the sanctity of the property is el finito. If Wal-Mart wants to move into a suburban neighborhood, all they have to do is say sell to us, or we will show the municipality that we have a larger tax base and will supply more votes. Trust me, your property rights have really been diminished because of this holding.

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Posted by MichaelSol on Friday, June 24, 2005 4:42 PM
QUOTE: Originally posted by arbfbe

BNSF does not want to serve small anythings. The discount for shippers using the shuttle services is about $300 in many locations, that makes it hard for the smaller elevators to be competitive. Depending upon where BNSF supports construction of a shuttle elevator it can decimate all smaller elevators in quite an area. All that investment by smaller companies, co-ops and farmers wiped out by a couple of large American conglomerates.

Hi Alan, Montana shippers receive a $350 carload discount at 9 of the 10 shuttle elevators located in Montana, over single carload rates. That's about $250 over multi-carload rates. At the same time, however, they pay an average $861 above the average BNSF system rate for identical shipping services elsewhere on the system, that is, same distance, export. If a shipper shipped by the carload, from Shelby to Portland, for instance, the cost of shipping would be 18.25% of the total price received at Portland for HRSpring wheat, based on 4/15 prices, or 16.34% of the total price received at shuttle rates. A relatively small difference, 1.91% of the gross profit.

In dollar terms, by shipping 110 carloads HR Spring through the enormous shuttle facility at Shelby (3.2 million bu. capacity, 162 car track capacity) the shipper saves $38,500 over single carload rates, or $27,500 over multiple carload rates on a shipment that will bring total revenue of $1.85 million in Portland. These "savings" are little more than 1% of the revenue received and are just not that significant in the overall scheme of things. Other factors are far more important to the shipper.

On the other hand, in order to take advantage of shuttle rates, shippers have to construct shuttle facilities. I checked with one of the big elevator contractors today, and they confirmed that typically a new shuttle facility costs between $8 and $10 per bushel.

So, for instance, to duplicate a typical Montana facility, say the Billings Peavey operation at 1.7 million bushels, the shipper must invest appoximately $15 million dollars, and probably also pay for the longer siding to be installed. On a 15 year loan, that's a $1.6 million financing obligation to handle annually, aside from increased operating costs.

To justify the cost, the shipper would have to have a minimum of 58 shuttle trains per year. That's 22 million bushels of wheat from a single elevator. That would be very "unusual" (That would be one third of Montana's entire export wheat crop in Year 2001).

From the railroad perspective, is it clear that the railroad is "saving" the costs of carload level handling? Well, many of the patrols that formerly picked up carloads of wheat are still out there, operating the same shifts on the same branches or the same areas. Some aren't. Exactly what is the railroad "saving"?

Is there added cost due to increased wear on the track and structure? We know the answer to that is yes. Is that offset by savings elsewhere? That's just not as clear as it should be. Further, the trend to unit trains has not shown up in the bottom line at all, to the contrary, last year on BNSF, operating expenses increased faster than revenues. If there are savings in increased unit train operations, it is difficult to find them in the place they are supposed to be: operating expenses. Arguably, filtering carloads and smaller carload units into existing traffic patterns has a different effect on railroad operations than fully dedicated trains. Is the effect positive or negative? There can be an argument both ways on that.

Is there an explicit downside for the railroad? According to the contractor that built the facility, the Co-op at Enderlin, ND built its new 50 car shuttle on CP, rather than BNSF partly as a response to BNSF "attitudes" on rates available to 50 car facilities. The RR suffered a net loss of the traffic and the loss of the entire amount of the revenue. It will never get it back.

So, to promote shuttle service, the BNSF takes a 12% loss of revenue. It's restrictive policies which anger most of the industry involved, results in a loss of customers, on top of a 12% reduction in revenue. Operating expenses continue to increase faster than revenue. What this all suggests is that the operating efficiencies obtained are smaller than the revenue lost. The magic word "efficiency" is meaningless if there is no net return.

The current satisfaction expressed by certain observers as to the perceived "efficiency" of shuttle operations is simply not justified by either the overall operating results of the railroads, nor by any discernible savings over regular operations. "Efficiency" as used by some of the Posters seems to be a "theoretical" construct that they should be more efficient, and therefore in our infinite wisdom we will just assume that in actual fact they are.

One of the problems with unit train operations since their inception with coal, is the inability to properly estimate the cost of the operation. And I don't mean that operating costs were ever overestimated. Hardly. At each refinement of the cost model, unit trains have typically been more costly to the railroad than the experts initially predicted. And each refinement continues to underestimate the cost.

Well, as with many assumptions, reality and theory can be quite different. There are not many specific facts offered in support of shuttle operations to show that they are, in fact, as "efficient" for the railroad from an economic perspective as the theory offered by the gentlemen suggests.

Best regards, Michael Sol
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Posted by Anonymous on Friday, June 24, 2005 8:39 PM
Gabe, I'll grant you that there is a fundamental difference between the public needs of a railroad/pipeline/transmission line et al and the public needs of a big box store or new multi family dwellings. However, in spirit (and from a legal perspective) a new private development is a new private development regardless of function or intent. In other words, I'm not sure the law sees a difference between local/regional juristiction that supports UP and local/regional juristicition that supports WalMart. The Supreme Court recognized that it would be discriminatory to allow Corporation A the right to eminent domain but not allow Corporation B the same right, regardless of what it is those corporations are involved. It is up to Congress to make the distinction between those corporations which absolutely need to access certain private property to function, and those which could effectively "shop around" for the right location.

Of course, I have argued in other topic lines that railroads are not the same as other private ventures, therefore it is ridiculous to allow railroads the same levels of "hands off" government approach, especially given the importance of preserving and expanding transportation infrastructure to meet the demands of an ever growing economy. If I remember correctly, even you Gabe presented the "McDonalds" analogy in defending the current railroad closed access status quo system. So therefore, if railroads are no different from McDonalds when it comes to what governments allow in terms of price or access regulation, then it can also be argued that McDonalds is no different from railroads in what governments allow when it comes to eminent domain.

For the record, I am all for allowing railroads the right of eminent domain, but with that right comes the necessary oversight of regulation to assure optimal citizen access to that ROW that utilized the right of eminent domain. Otherwise, we are just granting fiefdoms to discriminatory entities.
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Posted by ericsp on Friday, June 24, 2005 11:02 PM
QUOTE: Originally posted by broncoman

I am born and raised in the central valley of CA, so I am curious as to the "stranded" grain elevators of the midwest. There are some fairly large farms still left in the greater sacramento area but it seems that they truck the grain to a siding where it is transferred to anywhere from 2-6 cars. There are still bigger elevators around I would say you wouldn't have to go more than 60-80 mi to go from one to another from Redding almost all the way down to Los Angeles. Is this scenerio different from the midwest? I am just curious as to the scope. I am sure the distances between "train load" elevators is substantial. And out of curiosity what is the standard "train load", 30-50 cars?

Thanks for the info.

The grain trains I see are probably about 75 to 100 cars. All of the grain elevators around here are receivers. Do they load any grains besides rice up there?

"No soup for you!" - Yev Kassem (from Seinfeld)

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Posted by greyhounds on Saturday, June 25, 2005 12:30 AM
No offense to Gabe but,

"Lawyers are like nuclear weapons, I got 'em because the other side's got 'em; but once you use 'em, they screw everything up."

By Danny DiVito in "Other People's Money" - a really great (or "Greyt" as we fast dog folks say) movie.
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by gabe on Saturday, June 25, 2005 11:04 AM
Greyhounds,

None taken. Most of my best friends are lawyers and are great people that truly entered the profession to serve the public good. That having been said, as a group, most of us can't stand lawyers.

Gabe
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Posted by gabe on Saturday, June 25, 2005 11:12 AM
QUOTE: Originally posted by futuremodal

Gabe, I'll grant you that there is a fundamental difference between the public needs of a railroad/pipeline/transmission line et al and the public needs of a big box store or new multi family dwellings. However, in spirit (and from a legal perspective) a new private development is a new private development regardless of function or intent. In other words, I'm not sure the law sees a difference between local/regional juristiction that supports UP and local/regional juristicition that supports WalMart. The Supreme Court recognized that it would be discriminatory to allow Corporation A the right to eminent domain but not allow Corporation B the same right, regardless of what it is those corporations are involved. It is up to Congress to make the distinction between those corporations which absolutely need to access certain private property to function, and those which could effectively "shop around" for the right location.

Of course, I have argued in other topic lines that railroads are not the same as other private ventures, therefore it is ridiculous to allow railroads the same levels of "hands off" government approach, especially given the importance of preserving and expanding transportation infrastructure to meet the demands of an ever growing economy. If I remember correctly, even you Gabe presented the "McDonalds" analogy in defending the current railroad closed access status quo system. So therefore, if railroads are no different from McDonalds when it comes to what governments allow in terms of price or access regulation, then it can also be argued that McDonalds is no different from railroads in what governments allow when it comes to eminent domain.

For the record, I am all for allowing railroads the right of eminent domain, but with that right comes the necessary oversight of regulation to assure optimal citizen access to that ROW that utilized the right of eminent domain. Otherwise, we are just granting fiefdoms to discriminatory entities.


Dave,

I am not trying to be contumacious, but to quote the Court in its reference to the new land use "Nor will the private lessees of the land in any sense be required to operate like common carriers, making their services available to all comers."

The Court just kicked out one of the chief restrictions on the use of the doctrine. This will not only allow the greatly expanded view of public benefit to be used as a sword by the rich; it will also allow the doctrine to be used CONSIDERABLY more than it is now.

Gabe
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Posted by Anonymous on Saturday, June 25, 2005 11:48 AM
QUOTE: Originally posted by gabe

QUOTE: Originally posted by futuremodal

Gabe, I'll grant you that there is a fundamental difference between the public needs of a railroad/pipeline/transmission line et al and the public needs of a big box store or new multi family dwellings. However, in spirit (and from a legal perspective) a new private development is a new private development regardless of function or intent. In other words, I'm not sure the law sees a difference between local/regional juristiction that supports UP and local/regional juristicition that supports WalMart. The Supreme Court recognized that it would be discriminatory to allow Corporation A the right to eminent domain but not allow Corporation B the same right, regardless of what it is those corporations are involved. It is up to Congress to make the distinction between those corporations which absolutely need to access certain private property to function, and those which could effectively "shop around" for the right location.

Of course, I have argued in other topic lines that railroads are not the same as other private ventures, therefore it is ridiculous to allow railroads the same levels of "hands off" government approach, especially given the importance of preserving and expanding transportation infrastructure to meet the demands of an ever growing economy. If I remember correctly, even you Gabe presented the "McDonalds" analogy in defending the current railroad closed access status quo system. So therefore, if railroads are no different from McDonalds when it comes to what governments allow in terms of price or access regulation, then it can also be argued that McDonalds is no different from railroads in what governments allow when it comes to eminent domain.

For the record, I am all for allowing railroads the right of eminent domain, but with that right comes the necessary oversight of regulation to assure optimal citizen access to that ROW that utilized the right of eminent domain. Otherwise, we are just granting fiefdoms to discriminatory entities.


Dave,

I am not trying to be contumacious, but to quote the Court in its reference to the new land use "Nor will the private lessees of the land in any sense be required to operate like common carriers, making their services available to all comers."

The Court just kicked out one of the chief restrictions on the use of the doctrine. This will not only allow the greatly expanded view of public benefit to be used as a sword by the rich; it will also allow the doctrine to be used CONSIDERABLY more than it is now.

Gabe


Well, I'm okay with you being contumacious, as long as you don't become contumelious.

I admit, I am a little bit perplexed by the Court statement regarding lessees absolvency from "common carrier" assimilation, since the particular case pertained to a developer whose end product would ostensibly be made available to the public marketplace. If this interpretation is taken at face value, then a private individual with influence could convince governments to bestow the act of eminent domain to remove another private citizen from their property, soley for the purpose of the former building their own private residence on the latter's site.

Perhaps this is why the reaction from both the left and the right has been so vocal, and it begs the question as to why the Court would so drastically extend this right of eminent domain beyond the auspices of the original case. It's one thing to grant eminent domain for a project that would be made available to the public, it's entirely beyond reason to grant eminent domain for a project that is intended for private use.
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Posted by gabe on Saturday, June 25, 2005 12:51 PM
Exactly—and I suppose contumelious would be a better term in the context I was using.

As Dan said, in a recent post, what this will really come down to is the ability of the state courts to police properly this action. As somebody who works for a state appellate court, I am not at all convinced that there will be a uniform application of this oversight. Furthermore, in order for the State courts to properly oversee this, there is going to have to be litigation.

Who do you think is going to be able to hire the better lawyer, Wal-Mart or some family farmer? Furthermore, the type of litigation involved will be complex—where the better lawyer makes even more of a difference. I am truly worried about this one.

Gabe
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Posted by Chris30 on Saturday, June 25, 2005 7:08 PM
One thing to add to the small grain elevators that are disappearing. A lot of small elevators are/were located on old, lightweight rail that is/was maintenance deffered branch trackage. As the weight of a loaded grain car continues to get heavier, the lightweight, maintenance deffered track can no longer support the weight of those cars. To continue serving these small elevators the railroads would have to continue using smaller/lighter cars, or the branch trackage would have to be completely rebuilt at a great cost that would never be repaid to support the newer, heavier grain cars. Don't foreget about the cost of crew and equipment to serve the lightweight branches that might only produce a few cars a week for one season of the year. It just makes more sense for the small elevators take the discount offered and truck their product to a large elevator on the main line. The railroads are more than willing to give a discount to the small elevator vs. the expense of the branch lines.

CC
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Posted by broncoman on Saturday, June 25, 2005 7:29 PM
QUOTE: Originally posted by ericsp


The grain trains I see are probably about 75 to 100 cars. All of the grain elevators around here are receivers. Do they load any grains besides rice up there?


Eric rice is a big export, but I am not sure what the other grain is that is shipped. I know I have seen a lot of cars at the elevators up highway 99 above Yuba City. The cars were being loaded outside of rice season, but I didn't know with what.
Anyone else care to venture a guess.
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Posted by Anonymous on Saturday, June 25, 2005 9:27 PM
QUOTE: Originally posted by Chris30

One thing to add to the small grain elevators that are disappearing. A lot of small elevators are/were located on old, lightweight rail that is/was maintenance deffered branch trackage. As the weight of a loaded grain car continues to get heavier, the lightweight, maintenance deffered track can no longer support the weight of those cars. To continue serving these small elevators the railroads would have to continue using smaller/lighter cars, or the branch trackage would have to be completely rebuilt at a great cost that would never be repaid to support the newer, heavier grain cars. Don't foreget about the cost of crew and equipment to serve the lightweight branches that might only produce a few cars a week for one season of the year. It just makes more sense for the small elevators take the discount offered and truck their product to a large elevator on the main line. The railroads are more than willing to give a discount to the small elevator vs. the expense of the branch lines.

CC


This all goes back to argument of whether it is more effective to deliver grain from country elevator to unit train terminal via a 105k truck (129k in some states) over country roads, or whether it might be better to make that same short haul using old 264k (or even older 220k) hoppers over a still intact branch line. There are some shortline guys who even claim they can haul 286k cars over lightweight trackage if they just keep it under 10 mph. So it comes down to the idea that branchlines can continue to remain functional (and thus profitable) if the branchline owner can (1) carry grain from the elevators on his line to the unit train facility in the lighter weight 220k and 264k hoppers (which probably requires access to mainline rails to get to the unit train facility), or (2) fill up 286k hoppers with branchline grain and then go real slow over the branchline rails until the shortline can reach mainlline rails wherein they can speed it up to get to the unit train facility, wherein the 286k cars are added to the unit train consist. The former could be a problem if the older cars are no longer FRA compliant off the home rails, and the whole enterprise is dependent on the shortline operator being able to gain access to the unit train facility, often over mainline rails. When the Class I's owned and operated the the branchlines, this was no problem, but if they've spun off the branchline they are probably less accomodating of the branchline consists occupying the mainline rails.

The bottom line is that it is still more efficient to move grain via 220k hoppers than it is to move grain in 105k truck trailers, and unless the rail move is no more than a few hoppers per year, it should still pay to move this product via rail rather than truck. For the most part the branchline is already paid for, only maintenance required to keep it minimally functional. With diesel fuel prices looking like they'll stay high for the time being, and the truck driver shortage means current drivers will begin to earn higher wages to stop loss for trucking firms, the idea of running lightweight freight trains over the lightweight rails could make a comeback. But it will still depend on the access issue to make it work.
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Posted by greyhounds on Sunday, June 26, 2005 4:33 AM
Yes, but.

The grain isn't originating at a country elevator. It's originating in a farm field.

I remember watching a Wisconsin farmer harvest his corn. It was dark and the John Deere combine just went back and forth, it's headlights showing the way through the corn field.

The hopper on the combine would get full, then he'd ( or she'd, I don't know which gender was driving) unload into a semi in the field. Semi's can go into farm fields where the freight originates. Trains can't. When the semi got full, it drove off.

Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by kenneo on Sunday, June 26, 2005 5:39 AM
In a certain aspect, the BN in Montana is simply reacting to basic economics. As Greyhounds just stated, once the farmer has the product loaded in an OTR truck, you don't want to take it out and then reload it into a covered hopper unless the cost of that transload and two transportation charges will be less than keeping it in the truck all the may to the POE.

And Futuremodel is correct about the effeciencies of grain loading on branchlines. My last RR position was as a Station Agent and we had several single farmer and small grain consolidator elevators in my district. The export terminal was less than 100 miles distant (mostly between 60 and 85 miles) from the elevators, yet I could compete on single car-load rates with the EXEMPT (ie farmer owned and operated) trucker who could haul directly from the field 60-85 miles to the POE. The exempt trucker could eat my lunch and dinner getting from the field to the export elevator, but one there, he started charging "delay fees" for waiting to unload.

And then, about 1/2 the time, the truckers load was rejected because of "junk" in the grain that the branchline elevator filtered out. So the truckers had to locate a new sale for the grain. $$$$$$$$$$$$$$

Some things, while seeming to be non-cost effective, perform hidden functions that create greater economies further down the production chain. The farmer and the exporter were both better served by the small local elevator and the extra cost he inserted into the system was eliminated later in the production chain as illustrated above and the net result was a better operating system costing equal or less than any alternative. Consistancy and regularly fullfilled expections sell big time.
Eric
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Posted by MichaelSol on Sunday, June 26, 2005 9:07 AM
QUOTE: Originally posted by greyhounds
[Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.

No.

Equipment cycle times are as crucial to the farmer as to the railroad. The truck has to be back in time to transload from the Combine to the truck, or else the Combine operator just sits there waiting. On smaller farms, the Combine operator often IS the truck driver and he is not going to get his crop in if he spends his time in the truck driving cross country somewhere with a load of wheat.

Time is of the essence on a grain operation. The Combines operate as near to 24/7 as operator availabilty and fatigue will permit. The trucks are by and large used only during harvest, and there are neither excess trucks nor excess teenagers sitting around to drive them. And these are NOT 105k trucks that are out working between the elevator and the Combine. Those trucks don't load from Combines. They load at elevators.

This is hot and dusty work and to preserve the crop against rain, hail and insects, the crop has to get in as quickly as possible. Custom cutters make their money harvesting as quickly as possible in order to follow the crop ripening north.

Ideally, the trucks and Combine operate as a unit, one Combine, two trucks, two truck drivers. Small operators don't have the luxury so time is even more critical. A truck wants to be there by the time the bin is full on the Combine. The requirement for a truck at the Combine can be as short as 45 minutes. The farther the elevator, the more trucks and the more drivers needed to keep the Combine operating continuously.

The closer the elevator is to the farm, the better. There is no efficiency whatsoever in long distance driving of grain trucks off the farm to an elevator many miles distant just because it is larger.

Best regards, Michael Sol

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