Who Would Get To The MONEY First?

[croteaudd]

SUPPOSE somehow high profits COULD be had in railroading; in part, through deliberate logistics that built up the American economy and actually brought truckers more business. Lets say that a 60% or 50% operating ratio was possible. (Operating ratio is expenses divided by revenues. Currently, railroads do well obtaining an 80% ratio.) Hypothetically, WHO would have the insight to get to the big money FIRST? Would it be a management (in behalf of stockholders), stockholders (possibly a good or bad news scenario for a management), employees (to double or triple paycheck amounts), or a savvy, exclusive customer consortium (to dramatically reduce their own shipping costs)? WHO actually would get to the pot of gold first? WHO would even investigate to see with certainty if something like that was even possible or not? WHO has the ability to broaden their perceptive comprehension powers, and SEE what is BOTH obvious and not so obvious; things like a simple, fundamental, well known absolute truth, namely, that 6 and 9 is in fact 3?

[Anonymous]

Simple answer: stockholders. The execs get huge gobs of money, but compared to the full budget, even huge exec bonuses are puny compared to the dividends that shareholders can pull out in a short time.

Just look at UP+SP as the best example. It was share price that sealed the deal.

[croteaudd]

To Alexander:

Simple? If stockholders do not know of a potential’s availability, how could they ever hope to tap that potential? If a large consortium came up with a brilliant money saving idea, the railroad should just gracefully yield if they made the same profit margin. I don’t think a railroad would want to risk the consortium taking their business elsewhere.

[csxengineer98]

a consortium of what? who? and take railroad business where? need to spend less time in economics class and more time in the real world

[croteaudd]

Consortium of shippers. And customers are ALWAYS right. (In America, that IS the real world.)

[Anonymous]

Actually, not so. In America, (and frankly, in anywhere else,) the owner is king. If he want's to ignore the customer's will, and run his business into the ground, he can. Happens all the time.

Did the shippers have much say in BN+SF, or UP+SP? No. Almost none. Those mergers may or may not be wise, but it didn't matter, the owners, i.e. the shareholders, wanted them.

In a contest of wills, the shareholders always win. It maye stink, but, baring fraud by executive staff, (i.e. Enron,) that's the way it is.

If railroads became more profitable, the money would either go into infratructure or into dividends. With BNSF, they stopped the former and switched to the latter, before their present ho-hum performance came about. (Rob K. made the change after BNSF+CN went up in smoke.)

[croteaudd]

IF a consortium of customers figured out how to dramatically reduce their rail shipping costs, does anyone honestly think a railroad would not want to find out HOW it could be accomplished? Once the railroad saw for themselves how good things worked, and how wise the consortium’s ideas were, they could do the same magic for the rest of their customers at the normal prices, and reap great profits. (This meshes well with the big interlocked picture.)

[Anonymous]

If customers came, behind the scenes, with a plan like you outline, the RRs might listen. Maybe. It'll depend on who is at the reigns of what company is approached.