BNSF boss says transport system nearing crisis

[nanaimo73]

MichaelSol-
During the mid 1970s there were 5 lines (6 if you count N&W) running between Chicago and Omaha. Are you saying all of them should have been kept, and there was enough traffic out there to warrant all of them ?

[MichaelSol]

QUOTE: Originally posted by nanaimo73
I say there was excess capacity in the mid-west, causing the Milwaukee, Rock Island and North Western to not earn the cost of capital.

I think this underscores how simplistic DOT's study was.

"Excess capacity" did not cause Milwaukee, et. al. to not earn their cost of capital.

It sure as hell isn't the reason railroads can't earn their cost of capital now, and it wasn't the reason then, either.

Cause and effect has been conclusively eliminated on that allegation.

If you look at a broad cross section of business in trouble, rarely, very rarely, is "excess capacity" even close to the fundamental underlying reason for the business weakness.

The temptation to abandon a realistic analysis of what happened to the rail industry in favor of a simplistic answer must be overwhelming, especially when viewed in the light of the provenance of the simplistic theory coming from a government agency with no one experienced in the industry and which was instead battling for political turf.

DOT had it backwards, and you people have it backwards.

"Excess capacity" is a symptom, it is not a cause, of financial weakness.

Treat the symptom, you leave the cause. That was the weakness of that argument then, and it hasn't gotten any better with age. In this case, it was so backwards that the alleged symptom was, in nearly all mainline cases, an asset, not a handicap. The more "treatment" the weaker the patient got.

[MP173]

BAck from the federally built, taxpayer supported O'Hare airport.

The maps are pretty difficult to determine the exact lines. Dave if you want...email me a fax number and I will copy and fax copies to you...assuming Trains doesnt have a problem with that.

Dave, you are pretty deep into some philosophical discussions here regarding the roles of our government.

Do I think the PCE, CNW, RI et al were candidates due to federal policy? Never thought of it in that sense. My feelings were (and still are) they were lousy businesses. Money coming in didnt support the money going out plus return to investors. That simple.

As interesting as the map is, it appears to be a bit flawed. For instance, the ex NYC mainline across Indiana is shown as "potential A line", as is the Santa Fe line to Kansas City from Chicago. Were things really that bad back then?

I would like to see these maps in a bit more workable form, with the ability to enlargen and disect.

ed

[nanaimo73]

Dave,
The PCE appears on the B main lines map, meaning between 20 and 5 gross ton-miles per mile per year, from the Twin Cities to Tacoma. The maps in Trains, and DPM's comments, are mostly about the 11 Potential A Main (excess capacity) corridors. The Milwaukee Road was one of 5 in the Chicago-Twin Cities corridor, 1 of 7 in the Chicago-Ohio River, 1 of 8 Chicago-KC and 1 of 5 Chicago-Omaha. Trains did not discuss the lines west of St. Paul-Cheyenne-Colorado Springs-Houston.
You said-

QUOTE: You all won't face up to the truth: THERE WAS NO "EXCESS CAPACITY" OF THE US RAIL SYSTEM. There was only fixed capital that wasn't being marketed correctly.

I say there was excess capacity in the mid-west, causing the Milwaukee, Rock Island and North Western to not earn the cost of capital. Will you agree there was excess capacity in the mid-west ?

[Anonymous]

nanaimo,

The 1970's was an era of homogenous politics. It really didn't matter who was in control of the beauracracy, Democrats or Republicans, the effects were essentially identical. Thanks to Nixon, we got the EPA, the 55 mph speed limit, et al. Ford didn't change anything one way or the other being basically impotent as President, and Carter basically topped the irrational policy sundae with the culmination of Staggers, yes to Conrail but no to Milwaukee, et al.

Ed - On that map, how does the Milwaukee, CNW, WP, D&RGW, SP, and RI lines appear? I do not have that copy of TRAINS, so please enlighten me. Is the PCE deemed "excess"? If so, knowing what we know today do you think that was a rational, educated, even sensical designation?

Let's face some facts here. The policy during the 1970's was that energy was scarce, hence the 55 mph speed limit, et al. Yet instead of applying that philosophy to the US railroad infrastructure (e.g. save national energy consumption by shifting as much freight as possible from trucks to rails), we did just the opposite, encouraging the loss of rail infrastructure.

Don't you think that is a classic case of counterintuitive policy application?

How many lines show up as being excess capacity just because of the temporary downturn in rail business during the two decades of self-inflicted collapse? How was it self-inflicted? We all discussed this before - 1. defered maintenance to sex up stock prices for potential mergers, 2. The introduction of the 100 ton car, 3. The lack of labor rationalization to keep up with modern times.

Are you going to sit there and tell us that the PCE, CNW, RI et al were all legitimate candidates for excessive existence just because the culture of the federal beauracracy at the time was imbided with a lack of foresight and common sense? Or will you take a look at that map and discern some obvious and gratuitous errors of judgement on the part of DOT? You and I would look at that same map and see two different things. You see it and unthinkingly agree with the premise because it was put out by the federales. I see it and think things like "why can't they add capacity to those branch lines to connect them into potential A mains? Instead of taking out the Cowboy Line, why don't we encourage CNW to finish what they started 100 years ago and punch that line to the West Coast? Why not aid Milwaukee in streamlining the PCE into a modern day high capacity corridor?" Stuff like that. Because during this same time period our nation was in the midst of nearing completion of the Interstate Highway System and the Columbia/Snake River Waterway system. What's good for one mode (federal aid) is good for the others, right?

What I will venture without having seen that map is this: Yes, most of those "excess" lines were lines which were not being (or allowed to be) marketed to take advantage of the inherent efficiencies of railroad technology.

[MichaelSol]

I have my original copy of that DOT study. Still use it as it has some good statistical references regarding capacity.

The rest of the study was garbage.

You might wonder how a government agency just up and started lecturing railroads on what their problems were. A little chutzpah there. Remember, DOT had no experience with railroading outside of its safety agency, FRA. I believe Tom Lamphier's comments earlier on this thread were directed to this study, the kind of "whoa, whoa, whoa" from a professional railroader to a bunch of bureaucrats who knew nothing about railroading on their "bright idea" which they clearly thought would solve everything.

And this generated the confrontation with Congress as well. The study was ostensibly designed to support FRA's tying of 4R rehab funds to "capacity rationalization," a new approach to national rail policy. Except, it wasn't national rail policy. Congress had intended no such thing.

Essentially, bureaucrats were substituting their "ideas" in place of those of both the rail industry and Congress -- which was the authentic source of national rail policy. Then, those same bureaucrats who were trying to lecture everyone else on railroading and efficient operation, botched the administration of their own 4-R program so badly it did almost no good for its intended beneficiaries.

The rail infrastructure was in a crisis because of declining investment during the 50s and 60s -- Dieselization and its economic effects were sucking away funds from maintenance -- but when Congress allocated money to help, less than 6% was distributed after 3 years, as FRA and DOT tried to muscle their "new" ideas in on top of authentic national rail policy. Help the railroads? Hell no, that study had nothing to do with helping railroads. It was more important for DOT and FRA to get control of the funding and the policy than it was to get the money out where it was supposed to do some good. That study was a mere prop.

It was designed to show that the ICC had failed in its mandate to regulate the U.S. rail industry, and by implication, that DOT should get the job.

It was classic government empire building.

DOT basically invented a crisis. A crisis of perception. This was part of a process of attempting to show that it, not the ICC, should have jurisdiction over railroads. This "report" was part of that process, and within a year, the term "Surface Transportation Board" first appeared [Brock Adams!], to be housed within the DOT of course.

Of course, there was more than a little government CYA. Government policy was more responsible for railroads' failure to earn a reasonable rate of return than anything, but here was a nice example of a government report that showed that-- surprise -- it wasn't the government's fault at all, it was really the fault of these stupid railroads for trying to maintain all this "capacity" -- even though they had done so profitably at other times. Indeed, they were more profitable because of that capacity, with higher speed trains, fast equipment cycle times, and premier services.

DOT did not have the expertise to develop that kind of study.

The ICC's Bureau of Economic Research did, and never supported these conclusions.

[MP173]

The December, 1976 Trains, pages 14 and 15 put the previous month's discussion into graphic form...3 US maps with depicting A Main lines and Potential A Main lines on one map, B Mains on a second map and Branch lines on the other.

Dave, regarding Brock Adams...cannot comment. Back in that era my needs did not include Brock Adams.

Ok, here goes on this. You and I agree on the Fed basically holding the purse strings and thus the power. I do remember certain things from the 70's including my senior thesis in college entitled "Can Conrail Succeed". (BTW...I said yes). There was not enough money to fix all rail lines which needed fixing Dave. The term "not enough tea in China" comes to mind and it is a bit ironic, now isnt it?

The Fed was very selective in who was going to get the $$$ and who wasnt. Their thinking was that they wanted out of the railroad business as quickly as possible, hence the best lines were going to get the cash. PC/Conrail in the east was essential. Without that system, GM would shut down quickly (more irony, huh? now it is UAW thru Delphi that can shut GM down).

There simply wasnt enough money at the Federal nipple for all.

Dave, take a look at the maps on pages 14/15 in the December, 1976 trains and decide if those lines were just "fixed assets that were not marketed correctly".

Where was the money going to come from to fund not only the rehabilitation of those lines, plus the five man crews?

Where is the growth on today's rail lines? Where are the bottlenecks?

I spent a morning at Flagstaff last week and watched BNSF attack gravity with a never ending stream of trains. Train after train after train. Lots of motive power. They kept the parade moving. That is a testiment to Rob Krebs philosophy of "if you build it, they will come." He was right on the money. Unfortunately, he didnt really get to realize much credit for it, as Wall Street demanded higher returns and questioned his common sense of investing (INVESTING) in a railroad.

Rob Krebs looks pretty darned smart right now.

Dave, it is really simple, when your rate of return does not exceed your cost of capital, it is extremely difficult to fund expansion. That has been the story for a long time in this industry.

The bottlenecks today are terminals. Choke points are LA, St. Louis, Chicago, etc. Why? All the motive power that Matthew Rose can tie to those 129 car grain trains battling the 1.42% grade at the Arizona Divide doesnt mean a hill of beans when you cannot move the train thru the terminals.

Personally, I dont believe the government has any business spending money (direct investment or tax credits) with rails. The rails must stand on their own. The Feds have a huge problem now with spending, but that is another topic...not only are we exporting our jobs, but also are debt.

To suggest that the railroads "saw it coming" in the 70's is pretty much a rear view mirror observation. Tisk, tisk, they should have invested back then. WITH WHAT? It was a game of survival back then, as it is now.

I dont look back on my life and say "what if" or "only if I would have..."

Finally, I finished reading Leaders Count, the look at the history of the BNSF. Lou Menk made a huge bet on coal in the 70's...it wasnt a sure bet. Looking back, even with the odds as good as they were, the investment took several years to yield results.

gotta go to the airport and pickup the lovely and talented girlfriend...back from Italy.

ed

[nanaimo73]

QUOTE: Originally posted by futuremodal

The DOT in the 1970's was the Brock Adams era, right? There's your explanation - stupid is as stupid does.

DOT published Preliminary Standards, Classification, and Designation of Lines of Class 1 Railroads in the United States in August 1976.
Why are you trying to blame the Democrats when Ford was President ?


ED (MP173)
Do you know anything about
http://www.newspaperarchive.com/DesktopDefault.aspx
Is it worth joining ?

[Anonymous]

Murphy,

Why? Because the insiders should have known, if indeed they didn't have an ulterior motive.

Ed,

The DOT in the 1970's was the Brock Adams era, right? There's your explanation - stupid is as stupid does.

You should ask yourself why a 1970's era government agency would come up with such conclusions ("railroads need to reduce capacity") when even then there was the perception that oil was running out and there would be a need to shift traffic from road to more efficient modes?

Also, don't those first two statements you relayed say it all?

"$1.6 billion in purse strings"
"....limited resources are being stretched too far."(!?!)

That first statement can lead to a conclusion of possible blackmail by the federales. Question: Why would the federal government be so insistent on reducing railroad capacity? Who gained by this capacity reduction, railroads or truckers/barge lines?

That second statement, if taken in the latter context, would lead one to believe that the "limited resources" were being pushed to the max, e.g. demand for railroads was exceeding demand. It doesn't matter whether you are a supply sider or a Keynesian, that section of statement #2 is counterintuitive to the first section of statement #2, e.g. "When one considers the declining financial condition of the industry together with the continuing deterioration of track,...". If trackage was deteriorating, how could putting current rail traffic on a single deteriorating track be a solution to keeping traffic on double and triple deteriorating track? Answer - it wouldn't, rather it would instead accelerate the deterioration of the remaining track.

But, of course if it was just a question of maintenance funding from the federales, it would have made more sense to fix all the relevent trackage, and with this balance extend the life expectancy of all trackage by sharing the loads, rather than fixing a single track and expecting it to shoulder all the load burden. All that did was increase the frequency of needed maintenance cycles.

[MP173]

It is good to be back from my trip to Arizona, glad to see you guys were able to keep things normal!

Significant quote from Trains, Nov, 1976 p 8

"The Department of Transportation, which is holding the purse strings on 1.6 billion dollars worth of Federal loans for rail rehabilitation, concludes from these figures:
1. "Many thousands of miles of rail line in the nations's system carry an almost imperceptible level of traffic" and
2. "When one considers the declining financial condition of the industry together with the continuingt deterioration of track, it becomes very apparent that limited resources are being stretched too far."

The then current figure of 193,500 route miles of US track are sub divided as follows:
A Main - 20 million or more gross ton miles per year.... 17.1% of trackage
Potential A Main - "through line in excess capacity corridor 11.6% of trackage
B Main - Less than 20 million GTMbut more than 5 21.7% of trackage
A Branch - Less than 5 million GTM but at least 1 21.9% of trackage
B Branch - less than 1 million GTN 25.6% of trackage
Defense Essential Branch 2.1% of trackage

Discussion then centers on Chicago - Twin Cities (main lines of BN, Milw, North Western, Rock, and Soo). "these carriers operate 2171 route miles. The traffic density is 111m GTM yet the line capacity of these five roads totals 272 million gross tons. Individual disparties range from a density of 38MGT vs capacity of 49MGT for BN to density of 20MGT vs capacity of 100MGT for Milw."

further..,."DOT argues that 2 or 3 routes would suffice; and that excess capacity should be pared by:
1. mergers
2. joint trackage rights
3. downgrading

Other corridors discussed:

Chi - Pitt 4 routes 1802 ttl miles, 438 short route, 163 MGT vs capacity of 427
Chi - Buff 4 routes 2077 ttl miles, 506 short route, 129 MGT vs capacity of 234
Chi -Ohio Rivr 7 rtes 2193ttl miles, 282 short route, 91MGT vs capacity of 227
Chi-KC 8 routes, 3934 ttl miles, 450 short route, 167 MGT vs capacity of 362
KC -Dall 6 routes, 3573 ttl miles, 506 short route, 120 MGT vs capacity of 189
Dall-Hous 5 routes, 1494 ttl miles, 266 short route, 81 MGT vs capacity of 157
Chi-Omaha 5 rts, 2365 ttl miles, 463 short route, 123 MGT vs capacity of 208
KC/Omaha to
Colorado, 6 rts, 3572 ttl miles, 561 short route, 127 MGT vs capacity of 280
Chi - St. L , 5 rts, 1402 ttl miles, 269 short route, 95 MGT vs capacity of 214
Chi- Detroit, 4 rts 1158 ttl miles, 264 short route, 85 MGT vs capacity of 171


further, the DOT addresses the need for a "certain level" of excess capacity to cope with traffic peaks, reroutings, etc but...."above that level, which DOT conservatively estimates at 50% "the costs of maintaining excess capacity exceed any potential benefits".

There you go...DOT's own statements, facts and figures.

Also, "At the current rate of 8.5%, the interest alone on that amount (to maintain a line at 60mph) would exceed the maintenance cost of the track for any line carrying less than 35 million gross tones.

Trains (I assume David Morgan) then assumes the DOT believes that a 163,000 mile or even a 93,000 mile system is in order.

That is a summary of the November 1976 article.

I am going to eat lunch think about the numbers and then read the December editoral.

Lots to chew on.

ed

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by futuremodal

THERE WAS NO "EXCESS CAPACITY" OF THE US RAIL SYSTEM.

Yes there was.
Dave, look at pages 7 to 12, November 1976 Trains, and pages 14 and 15, December 1976 Trains.

OK suppose my Trains library doesn't run that deep.[sigh] What does it say?[:p]

I think what nanaimo is refering to is what we all read (and therefore took as a basic tenet) in the railroad press during the 70's, 80's, and 90's - namely the economy was shifting from a manufacturing economy to a service economy, therefore there was no more need for carrying lots of heavy bulky things, ergo railroads had "excess" capacity. I believed it, we all believed it.

The problem is, no one cared to mention that a "service" based economy had just as much a need for adaquate mass transportation systems as the manufacturing economy, maybe more. Because even though there was an ostensible shift in the economy, the demand for manufactured things continued to grow with the ever expanding economy (the occassional recession not withstanding). Instead of railroads hauling most cars out of Detroit, they began hauling in foreign cars from US ports in great numbers. Instead of most consumer goods being hauled by railroads from the MIdwest to the cities, now railroads were hauling consumer goods from ports to cities. It should be noted that the average length of haul by rail for these products probably increased, e.g. instead of the bulk of auto hauls from Midwest to Northeast, now that haul came from Portland OR and LA/Long Beach to the Northeast.

In the meantime, there was still a continued increase in US ag production, and coal demand for the most part continued to increase incrementally as Clean Air requirements increased longer haul coal trains from the PRB. Housing demand has mostly been on an upward trend ever since WWII, so lumber demand has remained mostly constant, maybe more was coming out of Canada than the US but that still resulted in increased demand for railroad centerbeams.

Then of course, with a service economy, you have more demand for trucking services. I expect that trucking firms during this time period would have been glad to shift their medium to long haul truck routes to TOFC, but the railroads seemed to have a reluctance to fully embrace TOFC right up to today, after all isn't that aquiescing to the "enemy"? Railroads prefered (and continue to prefer) COFC to TOFC, while truckers prefer van trailers over domestic containers. Since the US rail system was and is closed access, if truckers wanted to shift to rail they had to play by the rules of the railroad or keep the trailers on the roads.

Bottom Line - Demand for rail services (explicit and implicit) has grown with the economy regardless of what kind of economy it is, yet the railroads ignored this demand (Remember John Kneiling's general quote of railroad marketing people? "That business does not exist. It doesn't show up on our traffic sheets anywhere"). Which is why the push for reducing capacity wasn't really related to a drop in railroad demand, it was instead the byproduct of rail industry consolidation for the purpose of increasing pricing power.

All Stagger's really accomplished was pushing this potential business onto the highways, where it remains to this day, if not actually shutting it down. Not that this business shouldn't be on rails, and demand for railroad services is as high as it['s ever been. But the capacity to handle this business (and thus push railroading's market share back to the 50 - 70% range) was let go..........

[nanaimo73]

QUOTE: Originally posted by futuremodal

THERE WAS NO "EXCESS CAPACITY" OF THE US RAIL SYSTEM.

Yes there was.
Dave, look at pages 7 to 12, November 1976 Trains, and pages 14 and 15, December 1976 Trains.

[TomDiehl]

QUOTE: Originally posted by futuremodal

Ed, ed, and mud,

You all won't face up to the truth: THERE WAS NO "EXCESS CAPACITY" OF THE US RAIL SYSTEM. There was only fixed capital that wasn't being marketed correctly.

Maybe there wasn't in the Pacific Northwest. Also, it doesn't address excess capacity in relation to where capacity is needed.

Almost like granting government land in Alaska for a midwest railroad.

[MichaelSol]

QUOTE: Originally posted by jeaton
Hear is my point. Posts on this thread have reported that some senior railroad managers strongly disagreed with with the reductions of routes and trackage prevalent in the 1980's. I don't know for sure, but I doubt that any of these people could have come close to predicting just where the capacity problems would be developing at the turn of the of this century. But suppose they were dead on. Could the railroads have afforded to carry excess capacity just to fill a need that wouldn't appear for 10 or 20 years? I seriously doubt it.

"Afforded to carry excess capacity ...?"

Capacity is what permitted premium service, fast cycle times, low load wear on mainlines.

Every study I have seen, with a few exceptions unique to geographical circumstances, found positive economic advanatages to the railroad company in maintaining its "excess capacity." Indeed, for mainlines -- again some geographical exceptions --it was never "excess," railroad company's enjoyed better rates of return than after the "excess" was trimmed.

Railroads got rid of excess capacity. They continued to struggle. Cost of operations went up, not down.

I have a specific recollection of the Milwaukee main, Chi-TC. Double track with 135 MGT capacity, operating at about 40 MGT. Now, that's excess capacity.

MILW wanted 4R money to repair it.

FRA said no way, we are not going to give you $101 million to maintain that much "wasted" capacity.

MILW produced an elegant engineering study which showed conclusively that there was no financial penalty to operating that "much excess capacity." That, to the contrary, the alternative proposed single line with long sidings was more expensive to operate, would generate excess costs to the company in increased transit times, increased equipment cycle times, and operating complexity. Sprints would not be competitive with highway traffic.

By abandoning "excess capacity" MILW would have been forced to purchase additional equipment, motive power, and since no cost savings could be identified, the cost of relocation and consolidation would become a sunk cost that could never be recovered.

Every dollar invested in reducing capacity generated a negative net rate of return.

Milwaukee got the money.

[jeaton]

No doubt in my mind that the invention of a metal with super conducting power would cause a rather dramatic in the location factor of new power generating stations. However, unless someone can also come along with a plan to divert the lower Mississippi river to flow somewhere around Gillette, WY, don't plan on seeing any big power plants going up around the PRB mines. OK, I suppose that if we are dreaming, we can invent an efficient electric generating system that uses a gas other than steam to turn the turbines.

So what if in a decade or two, this scheme becomes possible? Our what if, and perhaps more likely, nuclear powered electric generation becomes the method for new and replacement generation capacity? What would hindsight say about a multi-billion dollar investment in railroad track to increase capacity to haul coal?

Hear is my point. Posts on this thread have reported that some senior railroad managers strongly disagreed with with the reductions of routes and trackage prevalent in the 1980's. I don't know for sure, but I doubt that any of these people could have come close to predicting just where the capacity problems would be developing at the turn of the of this century. But suppose they were dead on. Could the railroads have afforded to carry excess capacity just to fill a need that wouldn't appear for 10 or 20 years? I seriously doubt it. In fact the carrying cost of the excess capacity may have precluded building any thing close to the infrastructure now in place to carry PRB coal. As I recall, at the time the PRB began to develop, track into that area was not much more than junk status.

Hindsight is wonderful. It works even better if one can ignore any possible negative consequences of a different course of action.

Jay Eaton

[CSSHEGEWISCH]

QUOTE: Originally posted by chicagorails

CHICAGO & LOS ANGELES RAIL ROAD .... chicago to los angeles main line

TRIPPLE TRACKS
ELECTRIFIED
HIGH SPEED

A WHOLE NEW RAILROAD NEEDS TO BE BUILT

And what would you use for money to acquire a right of way and build it?

[chicagorails]

CHICAGO & LOS ANGELES RAIL ROAD .... chicago to los angeles main line

TRIPPLE TRACKS
ELECTRIFIED
HIGH SPEED

A WHOLE NEW RAILROAD NEEDS TO BE BUILT

[zardoz]

QUOTE: Originally posted by MichaelSolty, we are talking about rail managements scrapping double track on BN, IC, CP/SOO/MILW, creating instant operating slowdowns at the time,

If one looks at the CP track between Chicago and Milwaukee, you will notice that track 1 is still jointed rail in many places, whereas track 2 is welded rail. This is because at some point in the recent past (early 80's; I do not know who owned the track then, SOO, Milw, or CP), the plan was to eliminate one of mains (track 1) and convert track 1 into controlled sidings. Fortunately, this plan was never carried out, because now the track is at capacity (according to CP).

In the late 90's, CP added a new set of crossovers to their main line between Milwaukee and Chicago (C&M Subdivision) at WEPCO, partially to give them flexible access to the Pleasant Prairie power plant (now served by UP), but also to add flexibility to daily operations. Another set of crossovers was recently added to the same main line, this set at Oakwood Avenue in Milwaukee near the new Amtrak station at Mitchell Field (which BTW, has greatly increased ridership in and out of Chicago).

A few years before the UP took over the CNW, the CNW proposed an agreement with whoever (CP? SOO?) owned the above mentioned trackage whereby the CNW could eliminate it's New Line (now Milwaukee) subdivision and run the trains on the CP/SOO tracks. The idea was shot down because CP/SOO claimed that their trackage was already at capacity.

Interesting how the pendulum swings. Imagine how successful a railroad like the North Shore would be today. Fast trains, all-electric operation, frequent stops, good running time, nice equipment. If only the North Shore had not been sold for scrap and much of the ROW been developed.....


I wonder if either BNSF or UP's crystal balls hint at the potential for the development of superconductivity. If a metal is ever developed that has superconductivity properties at 'normal' temperatures, the utilities will build their powerplants at or near the mine mouth, thus eliminating the need for coal transportation. The railroads will then have lots of capacity.

[bobwilcox]

QUOTE: Originally posted by edbenton

QUOTE: Originally posted by MichaelSol

Well, this thread went downhill fast. The usual suspects showed up ....

Michael I never have attacked you at all it is just certain people think what they learned in school applies here in the real world 99% of the time it does not.

Some think when they can't make an argument based on facts or reason they must then turn to a personal attack. Oh well, their statements are out there for the whole world to read.

[daveklepper]

I still fault basic USA transportation policy that did not include LAND USE in economic planning when it was decided that all highway taxes should support only highway expansion, maintenance, and repair.

Which means that freight railroading in the USA is the ONLY mode that really is self-suporting and that indeed helps support its competition.

[Anonymous]

Ed, ed, and mud,

You all won't face up to the truth: THERE WAS NO "EXCESS CAPACITY" OF THE US RAIL SYSTEM. There was only fixed capital that wasn't being marketed correctly.

Hmmmmm, ed, ed, and mud. Reminds me of the "locals" in those old Newhart sitcoms. "Hi, I'm Mudchicken, this is my brother ed, and this is my other brother ed."
[:D]

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

This idea that laymen need to offer excuses for professional rail managment is just not something I find useful. The very good managers on the one hand -- Lamphier, Downing, Krebs -- who argued one direction contrast dramatically with a bunch of misfits at high salaries who did the opposite.

I don't understand what you're trying to say here. Can you explain please?

I am looking at some of the posters above who gladly "excuse" railroad management on the basis of the "lack of the right crystal ball" -- like they've got one or ever used one -- as though failure to anticipate demand is a perfectly legitimate business excuse if you're a railroad company, and a reason to continue to collect bonuses and salaries, along the lines that "the company is always right," even when they screw up. It is the "admirable" quality addressed by Spencer Tracy in the movie referred to above by a retired BN official who watched the whole thing unfold before his eyes.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

This idea that laymen need to offer excuses for professional rail managment is just not something I find useful. The very good managers on the one hand -- Lamphier, Downing, Krebs -- who argued one direction contrast dramatically with a bunch of misfits at high salaries who did the opposite.

I don't understand what you're trying to say here. Can you explain please?

[MichaelSol]

QUOTE: Originally posted by Murphy Siding
MichaelSol: Hard to follow your numbers, when they change 75-90% of the time.[;)][:0][:-,][(-D]

I have a cold, and I always recheck my work in any case.

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

MichaelSol: The railroads may have been able to reasonably predict a continued increase of ton miles in 1980. I have some doubts about whether they would have been able to predict where those trains would be rolling. Did any of them have an idea of how much PRB coal and west to east container traffic there would be in 2006, based only on 1960 to 1980 statistics?

Railroads have been building new lines to meet new traffic for 170 years. Most of what I recall hearing about in the era 1970-1980 was nothing but coal, coal, coal, and intermodal too. As mentioned earilier, MILW and BN coal traffic from that region increased by over 250% prior to 1980.

Speaking of corporate planning, Milwaukee engaged Bechtel Corp. to jointly design special cars, and ordered covered hopper cars to control the fines in transit, BN didn't. James Schlesinger, the pipe-smoking Secretary of Energy in the late 1970s, informed railroad investors that the Powder River basin would account for nearly all railroad growth over the next twenty years.

It isn't that railroads missed the clues. The question is how could they have missed virtually every reasonable indicator that said that the traffic of today would exist in nearly the form that it does. Recall, we are not talking about too slow building of capacity, we are talking about rail managements scrapping double track on BN, IC, CP/SOO/MILW, creating instant operating slowdowns at the time, guaranteed to compel a crisis as rail traffic inevitably grew., even as wholly useful, profitable and viable single trackage was eliminated upon some theory which still escapes me today.

This idea that laymen need to offer excuses for professional rail managment is just not something I find useful. The very good managers on the one hand -- Lamphier, Downing, Krebs -- who argued one direction contrast dramatically with a bunch of misfits at high salaries who did the opposite.

[edbenton]

QUOTE: Originally posted by MichaelSol

Well, this thread went downhill fast. The usual suspects showed up ....

Michael I never have attacked you at all it is just certain people think what they learned in school applies here in the real world 99% of the time it does not.

[MichaelSol]

Well, this thread went downhill fast. The usual suspects showed up ....

Here's how good of a "crystal ball" was needed.

The net ton miles on Class I railways in the US increased between 1960 and 1980 approximately 160.57%.

The Staggers Act was supposed to improve the position of US Railways to be competitive with other forms of traffic, while at the same time permitting elimination of allegedly "redundant" rail lines.

What would Grayson et.al. have been entitled to assume from a simple trend line analysis that the requirements of railroads would be in the future? Contrary to myth, post War the trend was almost always up. That 160% increase in the 20 years pre-Staggers, during a period of relatively flat U.S. economic growth would have, at the minimum provided a basis for predicting capacity needs in the future. Staggers said the growth should get even better.

So, what would Grayson's corporate planning people have been telling him, had to have been telling him?

That by 2004, US railroads would be carrying 1,838,027,584 ton miles of freight. Get ready.

That's what the "crystal ball" had to have said, at a minimum.

The actual results: 1,660,535,032 ton miles.

Ironically, post-Staggers growth has been slightly slower than the pre-Staggers growth that occured during the "boom" times of the 50s and 60s. Tongue firmly in cheek. That the growth is not only slower, but during a time of unprecedented overall economic growth is one of the odd results of Staggers you don't see much comment on.

Current "congestion" results from traffic that is only 90% of any reasonable minimum prediction that would have made twenty years ago. There should have been no surprises.

The results reflect on both results of the Staggers Act and on what passed for corporate planning in some departments.

[edbenton]

Yeah we need to let Futremodal have his day. LOL

[edblysard]

Ya know, I think you hit the nail on the head!
Ed

[mudchicken]

Ed:

Maybe we ought to let the big brainwashed fool have his one day. Today appropriately.[:D]