OAT : Open Access Thread

[Murphy Siding]

FM: Feel free to hurl any Norweigan jokes my way.I can shrug them off with a smile.[:)]. To repeat myself, somewhat, I do have a problem with your idea of "degrees of captivity". From my experience, working in an industry that is all about competiveness ( I sell lumber to house builders ) the duopoly theory dosn't quite ring true. If I'm the only supplier in town, whether it be lumber,gasoline,or transportation, the prices are mine to set. Competition requires only 2 to tango. That third competitor *might* offer a lower price, but generally they are not able to sustain a lower price. The reason is, the duopoly fellows are bidding based on what their lowest, bearable profit margin is. #3 has to buy the business to get in the game, then hope #1 or #2 gets tired of losing money and leaves. Guess what #3 does at that time? He raises prices! He has to, because he can't afford to lose money on an ongoing basis. The PRB is the best place to see this happening now. Rates can only go so low on any railroad line before the profit is gone. After you lower the rates on the "captive customers", how will you uber-compete with the class 1's, who are doing what they are best at?

[greyhounds]

QUOTE: Originally posted by futuremodal

greyhounds - you're splitting hairs. Bitzan himself does not differentiate between what he calls "way and structure" costs and total capital costs, because his theory says it isn't kosher to do so, and admittedly I am not totally clear as to why he frames it that way. But whether the claim is that (a) track maintenance and associated costs would go up, (b) rolling stock and associated costs would go up, or (c) both a and b, there is no evidence of that claim. For one to claim that rolling stock costs would go up, you would have to assume that rolling stock would be functioning at underutilization under OA, but in fact we already know that current rolling stock is underutilized in the current closed access system due to slow transit speeds, yard dwell, and system congestion from long slow consists. If OA resulted in a return to the Milwaukee/D&RGW model of more expedient dispatching, then car utilization would improve, and costs relative to tonnage moved would go down.

No, I wasn't splitting hairs - I was pointing out that you were changing the meaning of a word to fit your purpose.

Equipment ownership costs are important - and you changed the meaing of the word 'capital' to only include RofW ownership. When you did this you tried to get around what is obvious to anyone - OA will:

1) Increase equipment dwell time in terminals because multiple trains will have to be aggregated seperately - instead of one railroad forwarding the blocks twice a day, for example, two railroads will each forward the equipment once a day adding 12 hours to the dwell time. There is no "magic" in OA that will make shorter trains more economical.

2) Increase the terminal investments required to hold the equipment that is going to be sitting around longer in those terminals.

Both these thing will logically drive up capital costs. But you don't go on logic, you go on an ideology.

[MichaelSol]

QUOTE: Originally posted by bobwilcox
Once again you say something and can not back it up. I assume just about everything you say can not be backed up.

Well, this is getting pretty childish, and pretty far off the point. As a matter of fact, you posted the following July 22:

QUOTE: The costs I was refering to were called long run varible costs. The hard part is determining the definition of long term. CSXT has several bridges in MD built before the Civil War! IMHO the proper treatment of these costs is a very important judgement and should be a decision reserved to senior management followed by a reveiw by the board.

To me, this was bizarre. I can imagine "long term variable costs," but I have never actually seen one. And bridges are hardly a variable cost, long term or otherwise.

Now, I didn't remark on it at the time, but, you're pushy and you're rude, so let's look at "just about everything" and what you pretend to know.

The fact that you were looking to include "long term variable costs" in a cost equation, by including something that was clearly a fixed cost and depreciated out more than a century ago tells the Forum all they need to know about your understanding of fixed and variable costs. And how depreciation works. And the fact that you think depreciation on a fixed asset is a decison that needs to be made by the Board of Directors because it "is a very important judgment" call. You don't have the faintest idea what you are talking about.

The fact that you refer to a lugubriously obsolete transportation textbook as your source of information about the world also tells me you don't understand the market share pricing policy of the Western railroads and the pressure this is putting on them to build high priced Class IV and Class V mainlines that they then need to fill because they continuously are running negative cash flows and they need cash and they are not going to get that cash in the intensely competitive intermodal market by raising rates, but by lowering them.

I typically state numbers or cite sources. This "habit" is noticeably lacking in your posts. Except for the ridiculous textbook, of course. At least my citations are to studies done after steam engines were gone.

You act like Queen Elizabeth, demanding answers in a rude and snide way, like some know-it-all, but when it comes down to it, you are the one who never seems to be able generate a number, or reference a study, or, in this case, provide an analysis to back up your contentions.

These threads are interesting psychologically from the standpoint that the guy who can't back anything up, ever, is the first one to accuse someone else. On a topic as generic as variable costs, it is illuminating that when finally pressed on it, you don't even know what they are.

Hint: They don't include Civil War bridges in Maryland.

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by futuremodal

greyhounds - you're splitting hairs. Bitzan himself does not differentiate between what he calls "way and structure" costs and total capital costs, because his theory says it isn't kosher to do so, and admittedly I am not totally clear as to why he frames it that way. But whether the claim is that (a) track maintenance and associated costs would go up, (b) rolling stock and associated costs would go up, or (c) both a and b, there is no evidence of that claim. For one to claim that rolling stock costs would go up, you would have to assume that rolling stock would be functioning at underutilization under OA, but in fact we already know that current rolling stock is underutilized in the current closed access system due to slow transit speeds, yard dwell, and system congestion from long slow consists. If OA resulted in a return to the Milwaukee/D&RGW model of more expedient dispatching, then car utilization would improve, and costs relative to tonnage moved would go down.

No, I wasn't splitting hairs - I was pointing out that you were changing the meaning of a word to fit your purpose.

Equipment ownership costs are important - and you changed the meaing of the word 'capital' to only include RofW ownership. When you did this you tried to get around what is obvious to anyone - OA will:

1) Increase equipment dwell time in terminals because multiple trains will have to be aggregated seperately - instead of one railroad forwarding the blocks twice a day, for example, two railroads will each forward the equipment once a day adding 12 hours to the dwell time. There is no "magic" in OA that will make shorter trains more economical.

2) Increase the terminal investments required to hold the equipment that is going to be sitting around longer in those terminals.

Both these thing will logically drive up capital costs. But you don't go on logic, you go on an ideology.

It is my understanding that it takes longer to put together a 100 loose car consist than a 50 loose car consist. If I understand what you're saying, you think it is quicker to put together a single 100 car consist than two 50 car consists, or four 25 car consists. Putting together shorter consists takes less time, not more, so if railroads started to run the shorter faster model (whether from OA or some other reason), time would be saved both at terminals and in transit. With shorter trains you don't need massive yards, you can do with smaller more dispersed yards. And if the intent is to go after time sensitive business, you're not going to go the carload method but the TOFC/COFC/Bi-modal method. In that case the need is not for classification yards but empty sidings, and there are still plenty of unused or underused sidings out there that would suffice. In the meantime, the faster transit speeds would make the mainlines more fluid, and would provide more revenue hauls per year for this equipment. This is logic, not ideology.

What Bitzan and you apparently assume is that under multi-user access of single user lines, a set number of carloads that currently move in the single-user's long slow consist would shift to a number of short slow consists split among the multiple users. Clearly this is not happening under current multi-use situations, rather each line is still maximzing their total consist carloads under the long slow model. So in essence, you have little if any change in actual numbers of long slow consists, it's just that instead of a single railroad running for example 20 long consists per day, you have two railroads running 7 and 13 long consists, or 10 and 10, etc. There is no evidence that those 20 long slow consists are being split up into 30 or 40 shorter slow consists.

Terminal investment, whether in yards, sidings, or intermodal transfer facilities, would only need to be increased if total freight movement also increases. If railroads are found having to increase this type of investment, it could only mean that they are getting a larger share of the transportation market. You are also wrong to allege that shorter faster consists would result in equipment "sitting around", because equipment sitting around is what is happening now under the longer slower model:

"For many years, substantial effort has been devoted to the reduction of empty car-miles. These efforts have focused on finding backhauls and establishing pools. As nearly as I can tell, the benefit of these efforts has been zero. The boxcar fleet, and most subsets of it, continues to produce only one load per car per month. And the costs of repositioning are bound to consume the modest savings from reducing empty miles." (Charles N. Marshall; Railway Age Magazine, August 2005)
(bold font mine)

As you can see, the equipment utilization problem you say would occur under OA is actully happening now under CA.

I ask this in all honesty, what would you do now to take care of this problem of poor car utilization? You constantly repeat the mantra of "it ain't broke, so don't fix it", yet the evidence clearly shows that massive, perhaps even radical improvements are needed. If anything, the mantra is itself an ideology, not a logical or objective analysis of reality.

[edblysard]

Dave writes,

"If I understand what you're saying, you think it is quicker to put together a single 100 car consist than two 50 car consists, or four 25 car consists"

Well, you understood correctly, it is.
because of the simple fact that I can fit a 120 train in track 62 at the north yard, and have the car dept work it all at once.
On the other hand, I have to waste 4 tracks in the yard for your "short" trains., which means thats I now have 4 less tracks to switch into, which means I have to hold off switching at least one train per shift...and I have to have four more car men to work the tracks.

I can double two 50 car trains up and shove them over there, stick the power on it, and be done.

Your version requires four tracks, and at least four locomotives as opposed to one track and two locomotives...

Ed

[Anonymous]

Who said anything about the four short trains needing to be made up at the same time? They can be made up and dispatched one after the other. Since they will exit the yard quicker than the long consist, the same space is available sooner. Track capacity increases with greater expediency.

You also forget the customer service aspects of running more direct trains. Just because you consider rail customers to be an unfortunate necessity doesn't mean you gain anything by deliberately slowing their orders.

[beaulieu]

I have been watching this topic with interest but I see that it is deteriorating.

In order to hopefully steer it back to more useful reasoned discussion let me raise the following points.

First, loose car railroading is dying, it isn't going to die tomorrow, and probably not five years from now. I think that ten years from now it will be possible to see the end even it it hasn't occured yet. It will die when the railroads fill up enough track capacity with other traffic and then the network falls apart from too few useful connections. If you don't think this is happening look at the carload figures reported by the AAR. They are barely rising and the largest gains are in Aggregates and Coal, with Grain in the middle, not much loose car railroading there. Why do you think that railroads went to RCO operations? Not to Spite RR workers. I have seen a statement somewhere attributed to Matt Rose that he would like to exit Loose Car Railroading, I can believe it. I think the Shortline
Renaisance isn't going to last too many years. Hook and Haul or trainload is where the Class I s are headed and unless the shortline can provide a complete trainload to one destination they are going to wither.

Second regarding who would enter the railroad operating business under OA the first and obvious answer is large industrial and Mining Companies. This is what has happened in Europe. BASF and Ruhrkohle (RAG) both own OA train companies in Germany along with Maersk Sealand. The hurdles to entry are much higher than with trucks so only players with access to significant capital will try. I could see Fedex, UPS, or JB Hunt giving it a try. In UPS' case not necessarily for their parcels business but more likely thier Logistics business
on behalf of any Automaker. This is one of the other main type of OA operators in Europe, Global Logistics companies.

As for the limitations of passing it is done now, it can be done under OA. I would be shocked if any OA operator would even consider Loose Car railroading. An operator , say for example UPS, wanting as faster than basic speed path would pay a premium for it, over and above the basic charge based upon train chracteristics.

[edblysard]

Made up and dispatched one at a time?
Ok, just for grins, how long do you think it takes to "make up" a train?
I will even let you assume everything is perfect, no BOs, train crews are just sitting around in a waiting room to be assigned a train...and a dispatcher is just dying to give you green boards from New York to LA.

And dont presume to think I consider customers an necessary evil, quite to opposite, I think one of the reason my railroad has survived in UP land is because we do serve our customers quite well, they are the very reason we are in business.
In fact, I know quite a few of the plants shipping managers on a first name basis, have their cell phone numbers, and they have mine and the yard masters cell numbers, we talk all the time.


Anyway..

So tell me, step by step, how a train is made up and dispatched...in the real world, that is, not in the made up world you espouse, but what it actually takes to build a train.
Consider that, even if this was a OA system, the basic mechanics of how a car works, air brakes function and a train has to be put together remains the same.
Follow the FRA rules too, please.

Ed

[Murphy Siding]

beaulieu: Do you see some of these mining and industrial companies getting into the Railroad business to serve their own needs more efficiently, or just as a logical expansion of their business? I can't help but think that a railroad, flush with cash from selling it's ROW system, wouln't be a candidate to purchase a TOC.

[Murphy Siding]

Geez, Dave don't get cranky with me, I didn't throw down any gauntlet ![:)]. So
I guess subtle references to "blond jokes" and the like don't count as any gauntlet, right?]


I didn't do a very good job of quoting this post, but I did go back and remove the subtle reference to "blond jokes" on the offending post [:)]

[Murphy Siding]

Our for what it's worth department notes that there is a recent thread that notes one of the reasons for Toyota coming to San Antonio is the presence of 2 major railroads..........paaaaaage........two !.......

[greyhounds]

QUOTE: Originally posted by futuremodal

Who said anything about the four short trains needing to be made up at the same time? They can be made up and dispatched one after the other. Since they will exit the yard quicker than the long consist, the same space is available sooner. Track capacity increases with greater expediency.

You also forget the customer service aspects of running more direct trains. Just because you consider rail customers to be an unfortunate necessity doesn't mean you gain anything by deliberately slowing their orders.

NO!

You don't understand the economics of railroading. They've got to aggregate. How much they aggregate depends on a trade off between customer service, capital costs, and operating expense.

You can't beat a truck for service, because they're basically one to one, for truckload it's one shipper and one receiver and the driver performs the service to meet the specific demands of the customers. Unless it's a unit train, a railroad can not do that.

So for general merchandise, autos, LTL, whatever, a railroad sells on a discount to the truck alternative. To do this they must produce the transportation as efficiently as possible. This means they must aggregate the sales units (trailers/cars/containers/whatever) into production units (trains) as quickly as possible. The quicker they are able to do this, the more they reduce their capital costs. And the larger the production units (trains), the better. There are costs per train mile that do not vary with the size of train. That crew gets paid the same if they're hauling 15 cars or 150.

Your fantasy is that four trains of 25 cars will be more efficient than one train of 100 cars. NO!

It will take four different operating companies just as long (or longer) to aggregate their sales units into their seperate smaller production units as it will for one operating company to aggregate into one larger production unit. And then their operating costs (four crews vs. one) will be much higher.

You don't understand railroading. So when things don't go your way you come up with conspiracy plots about the BNSF "Not Liking" bi-modal technology, etc.

It's not a dinner date, it's a business.

And rational decisions are made. They're not always right, but they're always rational.

The fact that you don't understand things does not make for a conspiracy.

[beaulieu]

Murphy Siding, I would expect that the new Operators would serve their own needs,
for example say Peabody Coal would operate unit trains from their mines in the PRB to Electric Power Plants and back. That doesn't preclude an independent operator biding for the business. I would expect different companies to make different choices. I could also see the big companies setting up rail operations but
later spinning them off. For example say Peabody Coal might choose to operate their own Trains but Arch Minerals, another big PRB coal miner, might prefer to contract out their rail haulage.

[Murphy Siding]

beaulieu: That makes sense. An interesting, side thought is that a coal company or a power plant could start it's own TOC for it's own use. They could effectively run the TOC " at cost" and take all the profit out of the equation.

[beaulieu]

QUOTE: Originally posted by edblysard

Made up and dispatched one at a time?
Ok, just for grins, how long do you think it takes to "make up" a train?
I will even let you assume everything is perfect, no BOs, train crews are just sitting around in a waiting room to be assigned a train...and a dispatcher is just dying to give you green boards from New York to LA.

And dont presume to think I consider customers an necessary evil, quite to opposite, I think one of the reason my railroad has survived in UP land is because we do serve our customers quite well, they are the very reason we are in business.
In fact, I know quite a few of the plants shipping managers on a first name basis, have their cell phone numbers, and they have mine and the yard masters cell numbers, we talk all the time.


Anyway..

So tell me, step by step, how a train is made up and dispatched...in the real world, that is, not in the made up world you espouse, but what it actually takes to build a train.
Consider that, even if this was a OA system, the basic mechanics of how a car works, air brakes function and a train has to be put together remains the same.
Follow the FRA rules too, please.

Ed

Ed, I am not sure if this is directed at me or not but I will answer it. I don't believe anything will change as far as the mechanics of making up or inspecting trains. The people who do the work will be just as skilled and will have to meet the same FRA requirements. What you seem to be seeing is something like owner-operator train companies. I cannot see anything like that being allowed.
I know that some of you don't like it, but I am going to go back to Europe for an example. There is Train Operating company based at Köln (Cologne) Germany
known as Häfen und Güterverkehr Köln (HGK for short) They were formed by the local port authority to provide independent switching service between the local
riverport and the many large Chemical and Industrial Companies that line the Rhine River on either side of Köln. Service provided by the local Closed Access
Operator, DB Cargo (Cargo Arm of the German National Railway)deteriorated over the years forcing many of HGK's customers to ship by truck or barge. Fortunately about 8 years ago Europe forced legislation requiring Open Access. HGK was the very first German Shortline to operate an Open Access freight in Germany. HGK is exactly a German counterpart to PTRA.

I think Chemical shippers will hang on to Carload shipping longer than anyone else just because of the relative value of each carload and because they can bear more transportation costs. But every day another small customer dribbles away from the carload network, its a death of the proverbial Thousand Cuts, one customer going away at some point makes it uneconomical to operate a local to some piece of trackage which leads to smaller manifests to the nearby terminal which then get consolidated into fewer but again larger trains causing service to deteriorate starting the cycle over again. Ed what you can see in Houston is the best and brightest, most of the rest of the country is more like the Third World when it comes to carload traffic. A Shortline or Terminal road can give its customers the best service in the world but if their Class I connections drop the ball it is all for naught.

I would expect under OA that products like Plastic Pellets would shift to some type of specialized container as would finished chemicals, Chemical Intermediates would continue to move in tankcars
but I would expect them to move in mini-trainload blocks. Not every train has to be 135 cars long. Heck this past winter BNSF ran a train out of Duluth, MN with just one revenue carload. Of course the car was a Schnabel and the loaded weight of the car was about one million pounds, with a value per pound about
the same as a Texas T-bone steak.

[beaulieu]

QUOTE: Originally posted by Murphy Siding

beaulieu: That makes sense. An interesting, side thought is that a coal company or a power plant could start it's own TOC for it's own use. They could effectively run the TOC " at cost" and take all the profit out of the equation.

And even more importantly they would control their own service, with some limitations due to pathing, they would set the times when the train would operate, and the power and cars would be there when needed.

Near OA has existed in the past in the US. For about 10 years Detroit Edison had complete trainsets to haul the coal to fuel their powerplants, not just cars like many utilities own today but locomotives as well. C&O and PC (later Conrail) provided the crews, and for a few years a caboose, but Detroit Edison provided everything else including fuel. As another example for many years US Steel moved the Iron Ore and Coal used to make steel over their own railroads, across the Great Lakes in their own Lakers, and up the rivers in their own barges. Of course this wasn't OA but the shipper did own his own rail transportation, and they were a "Common Carrier"

[edblysard]

Beaulie,
I know all about single carload worth; I put the locomotive on a SunCo Cat Cracker on a Schnable bound for Denver..
Horrible example of your concept, that thing ran at well below track speed, clogged up the system everywhere it went.
Perfect example of free enterprise at work though, the value of the product is so immense it was worth the special moves, spiked switches, extra crews, single, brand new locomotive, the cost of car lease, the traffic snarl it created, and all the rest, BNSF still made money.

The post wasn’t aimed at you, but a request towards Dave to see if he knows what it takes to build a train.

As you didn’t answer for him, and I would like to test his knowledge, not yours, the request still stands.

But I do this for a living, and I can promise you hands down it is faster and more efficient to build a 100 car train than four 25 car trains.
Every single time you move a car in a yard, it cost money.
Every minute a car sits in a switching yard, the shipper loses money on the car and its contents.

Chemical shippers, and the plastic industry already have specialized cars, they are the four bay covered hopper.
I would go on to explain how Phillips and Dow, Solvay and others actually use these cars and a SIT yard as mobile warehouses, but that doesn’t fit in your OA theory.
I would also go on to explain that the plastic producers do this on purpose, due to the turnaround time of re tooling their plants when they shift from making one product to another, but that wouldn’t fit either.
Point is, I need to know if Dave has a clue how trains are built.

Let’s say your 25 car train requires SHPX007, which is ten cars deep in a yard track.
Do you guys realize what it takes to get that one car out of there?
I assume you plan on building your 25 car train on a track, so there has to be a clear track to switch into.
Someone has to drag the ten car cut out, put SHPX007 in your clear track, and put the rest of the cars back, right?
Is that how you think it works, one car at a time?

Yes, I understand quite well the European model, but you’re comparing apples to oranges, it is a completely different system, about the only thing both American railroading and European railroading have in common are flanged wheels.

So, again, and to clarify, Dave, please give us, on a step by step procedure, what is required to build a train.
Use as a starting point the instant I, as an imagined shipping manager for, say, Phillips plastic, release a car(s) to a railroad switch crew to pull it from my plant.
All of the other freebies, crews waiting to run it, and dispatcher drooling to get in moving, are included.
I would like to see what you think is required to get the job done.

Again, FRA rules and practices apply.

I have noticed over and over that every time a question is asked that requires true knowledge of actual railroading, the nuts and bolts of it, no one ever seems to answer.
It is usually ignored and glossed over, or answered with a vague "OA will make that more efficient", but no real hands on answer is ever supplied.

MikeSol, I don’t care if your bridge buddies with every ex BN officer there is, if you don’t know how to pull pins, tie a hand brake and lace hoses, you don’t know a thing about how a railroad really works.
You might be a whiz kid with pie charts and a slide rule, but I wonder if you could get a train out of Houston and into Okalahoma by yourself.
If you can, show me, if you can’t....[

[MichaelSol]

QUOTE: Originally posted by edblysard

tYes, I understand quite well the European model, but you’re comparing apples to oranges, it is a completely different system, about the only thing both American railroading and European railroading have in common are flanged .

Other than having ridden it as a passenger, I know nothing about Europen railroading outside of electrification technology. Please, explain what you know about the European model, and why it is different.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by edblysard
MikeSol, I don’t care if your bridge buddies with every ex BN officer there is, if you don’t know how to pull pins, tie a hand brake and lace hoses, you don’t know a thing about how a railroad really works.
You might be a whiz kid with pie charts and a slide rule, but I wonder if you could get a train out of Houston and into Okalahoma by yourself.
If you can, show me, if you can’t....

Well, and if you can't generate a consolidated financial statement, or understand one, it doesn't matter how many pins you pulled. You can't run a railroad.

You remind me of one of the six blind men describing an elephant. And this is endemic in the rail industry. You think your job is the most important. So does everyone else. You will laugh at the accountant, the engineer will laugh at you, the agent will laugh at all of you, the dispatcher will mock you, because none of you "really know" how a railroad works.

Your post is revealing in that fashion. I don't think anyone suggests to the contrary that in the very narrow way you look at things, that a 100 car train is, all in all, more efficient in terms of yard work. It's more cost effective. It cuts crew costs. It cuts idle time.

BN and MILW both went in for coal unit trains in a big way in the 1970s, neither company having much real experience with them. Based on your kind of experience, they were the way to go. Contract rates were set based on the cost-effectiveness of the trains. Between 1972 and 1977, coal traffic was the biggest growth item on both roads, increasing between 240 and 270%.

By 1978, MILW was in receivership and BN's Operating Ratio was 97%.

Certainly not all due to coal, but the underlying problem was that the pin pulling mentality such as yours had driven both railroads to consider cost savings only.

People such as yourself couldn't see, crippled by their own experiences, the increase in costs elsewhere in the process. The pin puller types were so enthused about the cost savings, they didn't check with the gandy dancer types who would have said you're going to wreck the track with those trains, unless you put a lot more money into the track. Nobody counted the costs outside of their little area of expertise.

More importantly, and I think your post considerably underscores this weakness, and that is the exclusively cost-driven nature of your comments.

I was discussing matters like this with Marty Garelick, Milwaukee Road's VPO, and he said it took years for him to learn, and he finally learned it from a railroad lawyer, the concern over costs is killing the railroads, railroads need to worry more about the revenue component.

The big unit trains are great from your perspective. They also bring in less revenue per carload. It doesn't matter what the cost savings are, if those cost savings are not justified by revenue received. And this is what is interesting about your comments: no acknowledgment whatsoever that cost savings cost money.

But, that is consistent with your experience and your world view.

"Putting a train together." How much that has to do with "running a railroad" is an interesting perspective, I am sure, from the standpoint of the people who actually run the railroads at considerably higher pay grades than yours.

I know what at least a couple of them would say to you, "tell you what, we hire you to do that stuff, and you can leave your 'running the railroad' rhetoric to the people who actually run the railroad. And of course, if you don't do your job, you're fired, and the next guy gets a chance."

That's how important you are to running the railroad. I think it was Samuel Johnson that remarked that "the cemetaries are full of indispensible people."

However, your hostility to Open Access (and your willingness to distort the comments of others about it) does represent a conservatism within the rail industry long hostile to change. Mainly for the reasons you explicity state: you know how to do it, and if no else does, they have no business commenting on it because you're the expert.

As though a self-proclaimed expertise has something to do with running the railroad as a business enterprise. Yours is a mechanical function. You are a replaceable part. The financial operation of the railroad is a trickier matter. I have a feeling that's why you haven't been appointed president yet.

As to Open Access, its an interesting idea. I have no opinion on it in the rail industry, as I have mentioned before. However, I don't blame Futuremodal for getting testy about it. Grown men like yourselves start name-calling at the drop of a hat. However, I do consider the evolution of some comments as interesting.

Those of you who believed it could "never" work, were surprised to find that the USA has a huge, and hugely successful, Open Access freight system, right in front of your noses. Far larger and more pervasive than the US rail system. All of a sudden you are a sudden expert on that too, and particularly on its deficiencies, with all sorts of sarcastic opinions, even as you did not even know what it was four weeks ago.

Pretty sudden revelation in expertise there.

What is interesting is how certain retired (or active) railroaders develop this sudden expertise so much more rapidly than anyone else, particularly those who are actually studying it, and developing some plausible models, aside from the big one that actually exists.

I think that underscores the inherent insularity of the rail industry, an insularity which has hobbled this industry for over a century. You are the problem, not the solution.

On the other hand, when I have a question, I do go to "my bridge buddies" as you lightly characterize them, because their experience in railroading unequivocally is much vaster and more varied than yours. and, shall we suggest, their vision is substantially broader than yours.

They all knew how to run railroads.

None of them had ever put a train together.

None of them pretend to know how, and that distinguishes them certainly, from you, who professes to know how to run a railroad. Without ever having had the job.

Best regards, Michael Sol

[MP173]

I am really sorry I sat this one out.

This is a fascinating thread and fairly civil considering the varied viewpoints.

Ed, you give a very indepth view of the terminal operations of a railroad. Michael, sometimes it gets a bit hard to follow you, but for the most part your views are very macro oriented. I completely agree with what you said about the cost savings vs revenue enhancement of not only railroads but industry.

Cost cutting (severe) seems to work only (and correct me if I am wrong) in commodity based businesses. Companies which thrive are companies which grow. Growth is critical...without it, most companies will eventually fail.

So, from the sales standpoint of business...and that is all that I am in the business world...a humble, yet very successful sales professional, I understand that it is very critical for my success as a commission salesman to maximize profit on each and every order I write.

This, must be balanced of course, with the "open access" aspect of my business. Thus, I create moats to keep my customers separated from competitors. Now, before any of you go and accuse me of taking advantage of the poor customer ("maximizing profits") you must understand there is a point in which the business is retained or lost. Thus, a good supplier, normally has about a 10% play on margins, perhaps 15% before changes occur in vendors.

Where am I going with this? Great question.

Railroading is a tough industry. Growth is tough to come by. Carloadings are pretty stable, with low or no growth. The growth has had to come via intermodal. That is it....where else will it come from, other than normal GNP flucuations?

A railroad's tracks are it's moat. And that moat is not very deep these days. Growth is coming from the most competitive portion of the transportation field...boxes of 48 or 53 feet of highly mobile products. Shippers have choices and utilize that choice.

Without that moat, rails already thin returns will evaporate. Check out the airlines. That is exactly what will happen if open access occurs. That is the open access we enjoy today, which Michael no doubt is referring to. It is great for consumers, bad for investors, unless you bought in LUV early.

Even worse if you are an airline pilot in his or her late 50's and just found your pension flew away and your abilities to earn an income will come to an end in a couple of years.

What we have here are two very powerful groups, shippers and railroads which are looking out for their best interests. Shippers simply want to lower their costs to the point that the railroad squeals with pain, but continues to provide service. Rails which the same, squeal, but dont go away.

You can argue all you want about how and why it should or should not work, but the simple fact is...it is not going to change in the near future. Why? Railroads will "lawyer up" and fight this tooth and nail while the shippers will not devote the energy or resources needed to combat the rails since transportation costs are only 5% - 10% of the total costs of a product.

So there you have it...someone fighting for 100% vs someone interested in lowering 5-10% down by a couple of points. Who will fight harder, longer, and tougher?

Hope this made sense.

ed

[MichaelSol]

That's exactly true Ed.

Two things happened the changed railroading after 1980.

The Reagan economy, and the stable inflation rates combined with general economic growth that was sustained through the Clinton years and through the present, benefitted the railroads immensely.

The Staggers Act deregulated the industry, and this benefitted the shippers immensely.

I think the shippers, most of them, got the better end of the deal.

Will OA ever become a reasonable scenario?

The next crisis in the rail industry will, I suspect, be a big one, based on the current overall financial condition of the Western railroads, which is the inevitable result of their pricing policies. If the national economy goes south for any reason, I think that the big Class I's are going to be in deep, deep trouble. If the economy doesn't, well, things might be fine anyway. If inflation kicks up, ouch. There is too much negative cash overhead in this industry to successfully weather any negative economic scenarios.

Like Staggers, a crisis will compel a change.

Like Staggers, that change may not benefit the industry particularly. But Open Access will undoubtedly be part of the discussions if and when that happens.

Best regards, Michael Sol

[edblysard]

Funny,
I note neither Dave or Michael answered the question...
And yes Mike, my job is the most important one on the railroad...but then, the locomotive engineer feels the same way, as does the yardmaster, trainmaster chief clerk and the super...which is why we do our job to the best of our ability...
Each of us feels like what we do is so important that it has to be done right, or the railroad will shut down...how many other places do you find people so focused and proud of their jobs?

Openly hostile?
No, just very skeptical.

Yes, I knew all about the wonderful open access system just under my nose, long before you pointed it out...the system, that is, not my nose.

My bother in law helps build parts of it.

And, just for clarity’s sake, which railroad did you run?

But you did answer my other question, in a way, with the "you’re to stupid to understand" attitude you and Dave have....and your condescending and snide attitude explains quite a lot.

Funny, but you seem to think hinting that you are so important that railroad managers rub shoulders with you will make the rest of us assume some of their smarts rubbed off on you...intelligence by association....well, arrogance by association is all I see in most of your postings.

And, if your railroad manager buddies did such an in-depth study on open access, and it is such a wonderful concept, why didn’t they put it in practice?

All you have convinced me of is that you’re as rabid as a flat earther...

For the record, I don’t run a entire railroad, just one small part, and I don’t want to either, poor slobs have a cell phone glued to their ear all the time, and are on duty 24/7/365...us dummies get 16 hours between shifts, vacations with no one calling, and manage to live quite well, for being part of the uneducated masses that we are.

By the way, you would be surprised how many degrees are folded up in some of the grips...and how smart a lot of the T&E guys are...

So, ever plan on answering the question,,,,how do you put a train together…or is that to beneath you…or too hard?

Ed

[MichaelSol]

QUOTE: Originally posted by edblysard

Funny,
I note neither Dave or Michael answered the question...

Because its a dumb question that has nothing to do, insofar as I can tell, with the idea of Open Access.

Please tell me if you can put together a Consolidated Financial Statement, and then we can perhaps discuss the "important part" of railroading because I happen to think that the ability of a company, long term, to earn profit and return for the investors is the important part

The "long term" is the part that bothers me about the freight rail industry.

What "how to make up a train" has to do with that, I do not know.

I supposed I could pose a long list of things that you don't know anything about.. That might be interesting.

However, in my comments, I will suggest one thing. I do, in fact, consult with knowledgeable people when I don't have the background or experience to otherwise reach a conclusion. I do that on a regular basis. Sorry you see it in such a negative light.

Perhaps because it is something that you seem to admit that you do not do because you already know how to put a train together, and therefore know everything there is to know about railroading, or business for that matter.

I have a strong feeling that many things won't change under Open Access from Closed Access.

How a train is made up might well be one of them.

Since I am neither "for" nor "against" Open Access, I am sure that if it is relevant there will be discussions about it. Since I have no background in that particular area, I have offered zero opinions on how to construct a train, and in fact, I have offered no opinions whatsoever on rail Open Access, but you, having lied about that on another thread, are now on some little kick here about it. Now why is that?

I think it is because my attitude on that technical area is in marked contrast to yours, where because you know something, you are pleased to represent that you know everything. You are an instant authority on rail Open Access. You must be, you've offered far more opinions on the matter than I have, since, oddly considering the energy and enthusiasms of your misrepresentations, I have offered none.

Tell you what, if you can explain in detail the significance of Note 54 to the Auditor's Report of the BNSF Annual Report, -- the meaning of that -- then we can have a discussion. But I have a feeling that you don't know a thing about that sort of item.

Is it important? It's more important than your idea of what it takes to assemble trains, since, as near as I can tell, its pretty much the same as anyone else's.

Frankly, I could give a "rats" about train assembly. The mechanics of it are meaningless to me without a thorough accounting analysis of the cost function -- throughout the entire railroad system, including effect on congestion, effect on track costs, effect on crew costs incurred sitting on sidings due to longer trains.

When I see that analysis, I will tell you whether you are doing a good job or not. Telling me "how its done" does nothing; absolutely nothing, for me, and frankly, it tells you nothing either because your information is not useful from the standpoint of examining fully alllocated cost/revenue benefits. You can't tell me, from your experience, whether you are doing a "good job" or not with your ideas, because you wouldn't know it yourself.

And perhaps that says all that needs to be said about the difference of your view of railroading, and mine.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by edblysard
But you did answer my other question, in a way, with the "you’re to stupid to understand" attitude you and Dave have....and your condescending and snide attitude explains quite a lot. Ed

Well, I haven't seen anyone stoop to lying about other people's remarks, as you have done. And your attitude is entirely "you're too stupid to understand railroading," using of course the proper version of "too." Snide and condescending nicely sums up your posts, but I still fail to see how any of them actually relate to Open Access except that you have strong opinions about ... how to make up a train .... and few ethical constraints on how you express them.

Futuremodal has some interesting ideas. I think he has tried to present them fairly, but I see a hostility to the idea that translates, far too easily for some of you otherwise grown up people -- into personal hostility and name-calling.

In your case, Ed, you simply went out of your way to fabricate a comment about Open Access that I never made. Well, why would you do that? You represent that you are a responsible person on the railroad, but yet you behave irresponsibly in discussing it.

The first I saw the word "stupid" used was in reference to Futuremodal, not by him.

What makes this such an emotional issue that you, and several like you, personalize, demonize, and insult and ridicule, even fabricate, at every possible opportunity?

Stick to the topic, and I am sure you will not be treated in the same fashion as you have treated others.

Best regards, Michael Sol

[edblysard]

"Because its a dumb question that has nothing to do, insofar as I can tell, with the idea of Open Access.”

Exactly what I expected from you...a rude remark that really isn’t an answer at all.

You are evading the question, I suspect, because the actual answer is none.

To respond to your statement above; It has everything to do with the idea of open access.

If you don’t grasp that how you put a train together determines how it runs, and why it does what it does, and that this is what really determines where trains go and why they are going there, then you can’t run a train, or a railroad, no matter how many consolidated financial statements your have in you briefcase, or how big your portfolio is, or how many former company officers you golf with.

Oh, and yes, I can read a consolidated financial statement, but then again, that is what I pay my accountant for.
See, I am one of those dumb people, went to work at 16, worked my entire life, paid attention, made a few shrewd investments, and managed, at 46, to put myself in a position where I can afford not to work ever again, if I chose.

Before I went railroading, I worked for The Office of the Attorney General, State of Texas…I am sure you realize they have a huge demand for us sloped brow, knuckle dragging manual labor types there…

And yes, I already know, the only thing in Texas is ***s and steers….but us steers are beginning to wonder about you guys!

I railroad because I love it, its fun, I have wanted to do this since I was a kid, and they pay me to ride around on great big trains!

Anyway, enough about us lower class folks.

So you have no idea how to put together a train?
And you think knowing how to do that is not important to running a railroad?

I think many, if not all of the presidents of the Class 1 roads, and all of the regional roads, would find you fairly useless.

The very basic unit that the entire railroad is built upon and you don’t know how to put one together.

So all your pontification is worthless.

The rest of your knowledge is useless.

All of your posting, replies, comments and self serving statements are nothing but academics, because you don’t know how to build a train, or why it is built, or what it really does, and you have no idea, beyond your books, what railroad do or how they work...

Above all else, you’re an arrogant, rude, self important snob, not worth the sweat from a track workers brow, not that you are skilled enough to even swing a spike maul.

You are, next to the poster Missouri, the single most asinine elitist
here, bar none.

And you still haven’t answered the question, what railroad do you, or have you, ever run?
And, if you haven’t run one, which one have you worked for?
Or are you afraid of telling the truth and saying none?

If, as I suspect, that is the case, then what company do you work for, and what, besides being a smart aleck, actually qualifies you to even comment on railroading?

As for me calling Dave stupid, I don’t remember doing so, but it is possible, and if I did, then he has my apologies, because stupid he isn’t.

I agree, Dave has several interesting ideas, and is very dedicated to them.
I think that, as passionate as he is about all of this, it wouldn’t be a bad idea if he gathers a group of Montana wheat farmers together, and figures out a way to build, beg or buy their own railroad.
I have a feeling that he would succeed, and I also have a feeling that he would modify his open access ideas really quick when it was his money on the table, or rails, as the case may be.

As for you, what I, and I suspect many other would like, is to see your credentials, of which you have, so far, provided none, other that your claim to access to former BN officers.

And, to address your version of what constitutes a lie, well, I would guess you didn’t re read that post, nor see where I clarified what I had written.
I corrected my mistake, and acknowledged it was a, indeed, a mistake.
You, on the other hand...

Oh well, back to pounding rocks, while the smart fellow runs…ooops…which railroad do you work for again?

Ed

[MichaelSol]

Lots of emotion there Ed, lots of insults, lots of odd stuff. Get some help.

You were 11 years old when I first was privileged to work for a railroad. Milwaukee Road. So, I guess to me, you come across as kind of a young punk who has few manners and less sense.

You like these little challenges don't you.

Keeps you from having to discuss the issues, because it is, as your post demonstrates, much easier for you to simply call names. Well, you are good at something and you have proven that beyond a doubt..

Did any of that diatribe actually have anything really to do with Open Access?

I'd say, grow up a little, or take it off list. This is your very personal problem, not Open Access discussion.

Best regards, Michael Sol

[MP173]

Michael:

Cant find Note 54 in the BNSF report...the one I looked at went up to 15. I am probably looking in the wrong place tho. What page is it on?

ed

[edblysard]

Great...
And your position at the Milwaukee?
Ed

[Anonymous]

Just to humor Ed;

How to make up a train: Multiple consists roll into yard. Consists are broken up into carload blocks depending on eventual destination. New consists are then formed. Multiple consists roll out of yard.

It's not overly complex, but it can be overwhelming for some.

The more carload blocks a consist requires, the more time it takes to make up that consist, and the more time that consist spends in the yard, taking up capacity. The less carload blocks a consist requires, the less time it takes to make up that consist, and the less time that consists spends in the yard, freeing up capacity.

greyhounds - You're slipping into Ed territory. That being said, you said something that begs for objectivity. We all know about aggregation, glad to see that you do as well, so we can skip that primer.

You stated, "How much they aggregate depends on a trade off between customer service, capital costs, and operating expense."

What we've been discussing is that very trade off to which you refer. The railroad wants to aggregate to the max, because the bean counters say that's the best way. The merchandise customer wants his shipment at a decent price AND in an expedient manner, else he gets fed up and takes his shipping to the mode of last resort, trucking. Trucking is generally more expensive than carload, so the shipper is taking a hit if that expediency is not manifested by the railroad.

Thus there is a HUGE middle ground between the single 53' truckload and the 125 unit TOFC or 250 box COFC. The truckers are limited to the number of boxes they can haul per trip to 2 (and sometimes 3) trailers max, so they cannot touch this middle ground for opportunity. But the railroad can, and if they do as you implicitly suggest and find the minimum number of boxes it takes to beat the trucker's maximum efficiency, they can grab and own this middle market. The real subjective question then is how few boxes can a railroad haul and still make money. There are plenty of shortines out there that make good money hauling 20 to 25 carloads a day. The Class I's have it in them to do the same for the sake of expanding their market reach and getting back all that business they've lost to trucking. What they lose in maximum efficiency they make up for in an expanded customer base.

BTW, I never said four 25 car trains were "more efficient" than one 100 car train, what I said is that more expedient dispatching can free up capacity, and that capacity emancipation would have a positive effect on capital costs, contrary to Bitzan's theory. (BTW, did you read his study yourself"). When single cars are only averaging one carload per month, even you would have to admit that such is a waste of capital, and is inexcusable 'cept for the fact that that's just how it's done in railroading, and only status quo railroaders "know anything" about railroading.

You also missed the point about the 4 vs 1 dynamic, as there are two possible outcomes in the constant tonnage scenario: (1)The 4 smaller trains are just as slow as the one, so there is no customer service gain to buttress revenues but there is more capital cost (Bitzan's paraphrased view), and (2) the 4 smaller trains will be more expedient (from the customer's perspective) in transit, thus revenues from increased customer satisfaction will offset the reduced efficiencies of shorter consists.

Of course, real world examples show that current multi-user lines do aggregate into maximum consists, contrary to Bitzan's theory. The spector of the shorter faster consist under OA looms from the market entry of traditional non-rail transportation entities (trucking firms, intermodal firms) into the train running business. Again, it comes down to that HUGE middle ground which you refuse to acknowledge, but of which non-rail firms seem to have grasped. It is akin to the FastShip concept, where they see a middle ground between containership speeds and air freight speeds (and their respective rates). Will FastShip fly? None of us knows yet, but it is my view that the middle ground between truckload and "maximized" trainload has a greater market potential than the intercontinental middle ground FastShip is trying to exploit.

[edblysard]

Dave,
You skipped over the details of what I was asking, and I suspect you did so for a reason...and you have over simplified it, a lot.

No, I was not trying to say what a great job I do, in fact, what I do is only a small part of getting a train ready...I was looking for the details...what the actual job entails of building a train, out of the multiple consists you stated... (Why you just can’t say a train come in, is switched out and)...well, you know.

How do carmen do their job, what is that job, how long does it take if you use ground air for the Initial Terminal Brake test verses having a locomotive pump them up, how do you get a crew to the locomotive, when do you call the crew, and why.
The "who does what and why do they do it" part...that’s what I wanted you to explain...


But you did point out that the less time a consist spends in a yard, the more capacity that yard has...true, which is why a 100 car train in one track is better than 25 car length trains using 4 tracks.

Which leads me to wonder why you harp on the BNSF Grain shuttles, which require zero yard time...same for a PRB coal unit...no yard time because they are dedicated unit trains with fixed points of origin and destinations, uber efficient.

Again, in all seriousness, why don’t you see what it would take to buy, or form a Montana Wheat Growers Co-Op railroad, to gather and consolidate the smaller elevators cars into an interchange ready train, and drag it to a BNSF yard?

Here is a little example of how efficient it can be...

Amoung all the other jobs at Pasadena, we have two dedicated jobs on that
side of the channel...they have job numbers, but we just call them the picker and the spotter...
The Pickers locomotive is left at the far end of our railroad, in the Marshaling yard, they go on duty at 3:00pm.

Now, keep in mind several or our really large customers make several different petroleum products, and in a lot of instances, they make enough of one particular product, plastic or chemical, that it requires a large number of cars, 50 or 100 at a pop, daily.

Our shooter goes on duty at 11:00 pm, their locomotives and train are at the Pasadena yard.

Here’s what happens.

A lot of the industries have their own switch crews and yards, and several have dedicated tracks for pulls and spots, (not team tracks, but industry owned sidings and yards)the cars they want pulled by us are left there for us, we go no farther into the plants than theses tracks.

The picker crew cabs out to the south end of our railroad, gets the light locomotive left there early that morning by the spotter, and starts north, (railroad north and south, north being towards Pasadena yard) stopping at these industry tracks and sidings, pulling the outbounds left there by the plant switcher.

They get done fairly close to 10:00pm, ending up at Pasadena with a train, already put together, made up of nothing but outbounds for the class1s, and the cars that forward on to North yard and the local yards in Houston.

If the crew is good, they have blocked it out en-route, by pulling the industries in the order the cars are classified for each of our member lines, so all the UPs are in one block, all the TexMex in another...no need to do anything more than cut each block out to the appropriate outbound class 1 track, throw the forwards (North Yard) in the next train headed that way, and put the locomotive in the house for inspection and fuel, so it is ready for the spotter the next day.

The spotter leaves Pasadena late in the evening on purpose, the plants are running a little less at night, doing their maintenance, and there are less plant shifts going to and from work, less auto traffic, and no in plant switchers working....the spotter has a train, blocked out in the order they work the plants, from the north to the south, and they spot or deliver the cars to the plants, ending up at the Marshaling yard in the early morning, where they tie down their locomotive(s), and cab back to the yard.
Leaves the picker a locomotive to start their day, the industries have their cars delivered when they want them, and get them pulled when they want also.

This set up leaves a huge "hole" in the 24 hour time frame...which allows the other trains that work the plants that don’t have their own yards time to go out, do the in-plant switching and pulling, the intra-plant moves, and handle the "hot" moves that this these type of industries often need, those special cars that just have to get there today.
(think lose car and LCL railroading)

So apply this concept to, say, "Dave’s Montana Central" and pull all the grain elevators in a sweep, while the empties are staged at the interchange yard, then have a counterpoint crew deliver the empties?

Of course, you don’t have to have just two locomotives, you could have several crews do the pulling on a regular bass, park the loads in sidings, and have a "picker" do a tri weekly pull, and the spotter do the same, leaving the required number of empties in the assigned sidings for the local crews to spot their particular group of elevators...cheap, fast, and a lot less costly than having BNSF do it for you...
You take it to BNSF, drop off the loads, and any lose car business you can pick up, run around and get against the empty orders, and head home...
Like FedEx, you get it to them, they get it where you want it to go.

This is a simplified example, but it is feasable with todays infrastructure and equipment.

Your farmers get the service they want, at a cost they can pay, BNSF gets the loads where they go, and I bet they would love to have that traffic delivered to them.

Sound familiar?

That exactly how my railroad works, the Class 1s don’t have to mess with the hassle of switching all these places, or the cost of all the crews and locomotives, the maintenance of the tracks or yards….they get the long haul move with out the problems of the short haul and terminal cost…they win, we win, the industries win…

And no, this isn’t exclusive to Houston, look at the New Orleans Public Belt, LA Junction in the City of Industry, and several other class 3 roads, we are all over the place…we do give the shipper several choices, and we do offer “personalized” services at rates shipper are quite happy to pay.

Ed