What happen to Milwaukee Road?

[MichaelSol]

And, as I have stated three times now, I do not have, in front of me, rail rate numbers for 1974. I have them back to 1980. That was the last year that Milwaukee Road served the PNW and is therefore relevant data. to the contention that rates are lower without the Milwaukee than with it. However, indexing shows that is patently untrue. Compared to ag and general rail rates elsewhere over the same period of time, Montana grain rail rates have increased significantly compared to the index, which demonstrates, I think conclusively, that the absence of the Milwaukee Road caused a rise in grain rates compared to the shipping price index for the commodity over the past 25 years.

For 1974, the only thing to "explain" is that that a rail rate in 1974 expressed in terms of 2005 dollars also needs the commodity expressed in those same dollar terms. And all that does is place that rate into 2005 dollars, not into a comparable 2005 rate index.

Now, for 1980 and later, there is an available rate index. Those have been discussed.

[greyhounds]

QUOTE: Originally posted by MichaelSol

And, as I have stated three times now, I do not have, in front of me, rail rate numbers for 1974. I have them back to 1980. That was the last year that Milwaukee Road served the PNW and is therefore relevant data. to the contention that rates are lower without the Milwaukee than with it. However, indexing shows that is patently untrue. Compared to ag and general rail rates elsewhere over the same period of time, Montana grain rail rates have increased significantly compared to the index, which demonstrates, I think conclusively, that the absence of the Milwaukee Road caused a rise in grain rates compared to the shipping price index for the commodity over the past 25 years.

For 1974, the only thing to "explain" is that that a rail rate in 1974 expressed in terms of 2005 dollars also needs the commodity expressed in those same dollar terms. And all that does is place that rate into 2005 dollars, not into a comparable 2005 rate index.

Now, for 1980 and later, there is an available rate index. Those have been discussed.

Well you sure had the 1974 figures available on May 25 --

QUOTE: Originally posted by MichaelSol



"a carload would bring $15,750, with a shipping cost to Seattle of $1,550 [1974 dollars]. Just about 10% of the gross revenue went to transportation. Yes, that is $6500 in 2005 dollars, but --"

Where did they go? Delete Key or Wastebasket? They clearly showed that the cost of moving wheat by rail from Montana has gone down significantly from 1974 to 2005 - which is not supportive of your political agenda - and now they're "gone".

Since the 2005 rate ($3,300) was 51% of that $6,500 figure, which you had a week ago, it means in no uncertain terms that the real cost to the farmers of moving thier low value wheat to the export terminal via the BNSF has gone down significantly.

Now you seem to want to link the rail rates to the value of the wheat. Why? The railroad has nothing to do with the world price of wheat. It seems that the real value of the wheat in 2005 is 1/4th what it was in 1974. So is your contention that the BNSF rate should be 1/4th what it was in 1974 so that it takes the same percentage of the the farmers' gross revenues? That's a novel approach - the relative size of cost components can't change?

You're doing this song and dance trying to find a number that supports your false claims. "Oh, we can't compare the rate to this number, use that number for comparison."

No. The real costs of the rail rates on grain from Montana have down big time. You can not escape that fact. They didn't go down as much as the value of the wheat - but that's a big so what. The BNSF doesn't set the world price for the wheat and it certainly isn't obligated to bail out the farmers - nobody should bail out the farmers. Year after year after year they keep growing this wheat, which has lost 75% of its value over the past 32 years, relying on government subsidies and screaching at the BNSF for even lower rates. What indication is there that this will ever turn around? None. Is it their intention to live on the government dole forever?

Ken Strawbridge

Ken Strawbridge

[Murphy Siding]

MichaelSol: It is not my intention to argue over the price of rice in China, or the price of wheat in Montana. You win....whatever. What I do find humor in, is the fact that you keep throwing numbers around to prove your point. When questioned on those numbers, (for the simple reason that some posters-me included thought they looked suspect), you explain that the numbers can't be used the way you used them. Once again-I agree with you.[;)] You seem to be correct, that you can't use those numbers the way you used them. I accept your explanation of why they wouldn't be valid.[(-D][(-D]
Now, you wi***o use the *Boy-are you stupid, Charlie Brown* technique again, because no one here understands what you're trying to say?[(-D][(-D] You can disagree with me, but the fuzziness of the information seems to be a sending error not a receiving error.

For full disclosure, I don't own any wheat farms, but I did eat a sandwich for lunch today-so I got that going for me.[:)]

[chad thomas]

[Murphy Siding]

Dang! Chad. I thought maybe you were going to explain some math to me.[:P]

[chad thomas]

QUOTE: Originally posted by Murphy Siding

Dang! Chad. I thought maybe you were going to explain some math to me.[:P]

Marvin from Pulp Fiction voice, "Hey man, I don't EVEN have an opinion"[;)][8D]

[MichaelSol]

Well, we disagree. I used the numbers for a specific purpose, and I stand by the purpose. Trying to apply them to a different purpose, to reach a different conclusion, is what I object to.

The 1974 grain rate expressed in 2005 dollars is still the 1974 grain rate expressed in 2005 dollars. And it still has nothing to do with a 2005 grain rate because the grain rate changes according to a different specific index than does the overall measured value of the dollar which is the result of a basket of such indexes. That may or may not be hard to see.

There is nothing condescending about pointing out that lacking specific rate data for 1974 makes a thorough discussion of that year less useful than 1980, for which a more complete data set exists. Why you might then decided to fasten on 1974 is a puzzler if a legitimate discussion is what you seek.

And yes, it is true that a $1,550 carload wheat rate in 1974 is a $3,300 wheat carload rate to certain shippers in 2005, but a $1,700 rate to other wheat shippers in 2005. And yes, the price of wheat at $4.50 a bushel in 1974 is still $4.50 in 2005. The inflation index is a statistical average that measures the overall value of a dollar in the economy, it does not measure the value of a rate or service notwithstanding that those are expressed in dollar terms.

[chad thomas]

[MichaelSol]

QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by MichaelSol

And, as I have stated three times now, I do not have, in front of me, rail rate numbers for 1974. I have them back to 1980. That was the last year that Milwaukee Road served the PNW and is therefore relevant data. to the contention that rates are lower without the Milwaukee than with it. However, indexing shows that is patently untrue. Compared to ag and general rail rates elsewhere over the same period of time, Montana grain rail rates have increased significantly compared to the index, which demonstrates, I think conclusively, that the absence of the Milwaukee Road caused a rise in grain rates compared to the shipping price index for the commodity over the past 25 years.

For 1974, the only thing to "explain" is that that a rail rate in 1974 expressed in terms of 2005 dollars also needs the commodity expressed in those same dollar terms. And all that does is place that rate into 2005 dollars, not into a comparable 2005 rate index.

Now, for 1980 and later, there is an available rate index. Those have been discussed.

Well you sure had the 1974 figures available on May 25 --

QUOTE: Originally posted by MichaelSol



"a carload would bring $15,750, with a shipping cost to Seattle of $1,550 [1974 dollars]. Just about 10% of the gross revenue went to transportation. Yes, that is $6500 in 2005 dollars, but --"

Where did they go? Delete Key or Wastebasket? They clearly showed that the cost of moving wheat by rail from Montana has gone down significantly from 1974 to 2005 - which is not supportive of your political agenda - and now they're "gone".

Well, this is just simply dishonest. The rail rate study I cited puts rail rates into an overall context. A rate, by itself, is fairly meaningless without an index value. The study goes back to 1980. They don't go back to 1974. So while the 1974 rate expressed in 2005 dollars offers limited probative value regarding changes in rate, a full rate data set as presented in the study does.

Rail rates, measured using an index propelled primarily by housing costs, is absurd. That's what you are doing because you think you've discovered a "gotcha" after your fiasco with gateways, etc.

And that's the essence of your argument: compared to housing costs, rail rates have gone down, but that is the result of using the CPI as your sole index reference.

Compared to an ag index, rail rates have gone up. Compared to an electric energy cost index, rail rates have gone up. Compared to oil they've gone down. Compared to a rail cost index, some rates have gone down, and some have gone up.

You're using the wrong index.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

Well, we disagree. I used the numbers for a specific purpose, and I stand by the purpose. Trying to apply them to a different purpose, to reach a different conclusion, is what I object to.

Fair enough.(shrugs) Then you should have no objections to me, as I still don't understand what you are trying to say.[:)] Carry on.

[n012944]

QUOTE: Originally posted by Murphy Siding

MichaelSol: It is not my intention to argue over the price of rice in China, or the price of wheat in Montana. You win....whatever. What I do find humor in, is the fact that you keep throwing numbers around to prove your point. When questioned on those numbers, (for the simple reason that some posters-me included thought they looked suspect), you explain that the numbers can't be used the way you used them. Once again-I agree with you.[;)] You seem to be correct, that you can't use those numbers the way you used them. I accept your explanation of why they wouldn't be valid.[(-D][(-D]
Now, you wi***o use the *Boy-are you stupid, Charlie Brown* technique again, because no one here understands what you're trying to say?[(-D][(-D] You can disagree with me, but the fuzziness of the information seems to be a sending error not a receiving error.

I agree

[MP173]

Murph:

I am with you. I dont get it. It must be that we are sales guys and our math is pretty simple...

Cost is x.

Selling price is y(x) whereas y is to be a number greater than 1 if salesman wants to make a buck.

That math has always worked for me.

Michael, I have really tried to follow you...really, I have. But, you have completely lost me. But, it has been fun.

ed

[MichaelSol]

Perhaps it is just best to agree to disagree.

An inflation index is a highly artificial construct. There are many such indexes. The common one happens to have been driven by housing cost increases in recent years.

Does that have anything to do with rail rates?

Not much, but using that as the reference does , in fact, tell you that rail rates have fallen by reference to an index driven by consumer housing costs, plus a basket of other consumer related items.

Comparing changes in rail rates to changes in housing costs ... shows ... what? You tell me. I will agree that it shows that rail rates declined compared to housing costs. So what? They increased compared to other costs. So what again?

There is nothing sacred about this or that index, especially if they have nothing to do with rail rates. Only a rail rate index is relevant to rail rates specifically. That seems to be the point strenuously avoided.

While this seems to be a new idea to members of the thread, in fact, if you examine how these indexes are put together, you will see that comparing unrelated indexes is an opportunity for both confusion and mischief -- literally apples and oranges.

However, since the concept cannot be discussed; there is no point in discussing it further. We simply disagree.

[Anonymous]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944
The artical then quotes MILW trustee Stanley Hillman as saying "Seldom since the Pacific Coast Extension was completed in 1909 has the Milwaukee been able to attract sufficient business to the rout to justify the hundreds of miles of totally unproductive line that are included in it; and never in recent years has it been able to do so." The 1561 route miles west of Butte, Mont., particularly upset the trustee. "Close to 40 per cent of the MILW's route mileage west of Butte gererates only 6 per cent of its revenues west of Butte."

Well, stop, take a deep breath, and consider how much of UP's route mileage between Omaha and Salt Lake generates revenues. You can take close to 40% of any transcontinental, leave out the revenue generated at the terminals, and come up with a ridiculous figure.

Hillman resigned after he saw the real meaning of what he had been talking about.

Trains didn't report that part of the story.

Does this mean that 6% of the freight originated west of Butte or does it mean that the density of traffic on the line was such that the revenue per track mile x the number of track miles west of Butte was only 6% of the total? A railroad propbably operates most efficiently when there are large numbers of miles between origins and destinations as long as the revenue per track mile is sufficient to support the trackage. That is why railroads concentrate on the long haul freight and often neglect the freight inbetween origins and destinations if the volume or price is low.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Well, we disagree. I used the numbers for a specific purpose, and I stand by the purpose. Trying to apply them to a different purpose, to reach a different conclusion, is what I object to.

Fair enough.(shrugs) Then you should have no objections to me, as I still don't understand what you are trying to say.[:)] Carry on.

Murph,

Just out of curiousity, are you using an abacus to derive your lumber sales figures?[;)]

I understand what Michael is saying, as should anyone who has at least a college education. What Ken is alleging is simply untrue, aka his contention that real rail rates for hauling grain out of Montana have gone down, when in fact the real rate has gone up since the consolidation of the Hill Lines into BN and the departure of the Milwaukee. This even you can comprehend, if not be in agreement with, because even you understand the basic economic principles of "competition = lower rates; lack of competition = higher rates". Ken's allegation goes contrary to this basic economic tenet.

The proof is in the percentage of farmers' gross income going to transportation costs to get the grain from farm to market.
In 1980 the percentage of gross income going to pay for transporation was 10%.
In 2000 the percentage of gross income going to pay for transportation was something like 40% or 50%.

From 10% to 40% is what we in fly over country call a rate increase. Ken calls it a rate reduction. Hmmmm........

[MichaelSol]

QUOTE: Originally posted by idhull

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944
The artical then quotes MILW trustee Stanley Hillman as saying "Seldom since the Pacific Coast Extension was completed in 1909 has the Milwaukee been able to attract sufficient business to the rout to justify the hundreds of miles of totally unproductive line that are included in it; and never in recent years has it been able to do so." The 1561 route miles west of Butte, Mont., particularly upset the trustee. "Close to 40 per cent of the MILW's route mileage west of Butte gererates only 6 per cent of its revenues west of Butte."

Well, stop, take a deep breath, and consider how much of UP's route mileage between Omaha and Salt Lake generates revenues. You can take close to 40% of any transcontinental, leave out the revenue generated at the terminals, and come up with a ridiculous figure.

Hillman resigned after he saw the real meaning of what he had been talking about.

Trains didn't report that part of the story.

Does this mean that 6% of the freight originated west of Butte or does it mean that the density of traffic on the line was such that the revenue per track mile x the number of track miles west of Butte was only 6% of the total? A railroad propbably operates most efficiently when there are large numbers of miles between origins and destinations as long as the revenue per track mile is sufficient to support the trackage. That is why railroads concentrate on the long haul freight and often neglect the freight inbetween origins and destinations if the volume or price is low.

There were a good number of bizarre statements made in those days, and that was one of them. When I heard the statement, my reaction was, "well, good, the more traffic that originates and terminates at the ports, the better." NP carried more traffic than either the GN or MILW but made less money, because as the first carrier built, NP served everything and everybody all along the way and wandered all over the place trying to do it.

Montana, for instance, was portrayed as a "bridge" state. This was suggested as a negative. W.L. Smith offered that MILW only originated 8% of its traffic in Montana. Why was that odd? Well, Milwaukee served 15 states. The average would be only 6% originating in each state. Montana would have been above the statistical average for any railroad that served 15 states.

Yet, 8% was somehow offered as a negative. I saw it as a positive because the railroad was paid for mileage, and it really racked up miles on those long tangents in Montana, South Dakota and Eastern Washington. Where else would the Company earn 42% of its gross income from 24% of the total carloadings with only 20% of the total company employees on 18% of the track mileage?

To me, it symbolized a terrific economic efficiency of revenue production, compared to Lines East, that 40% of the line generated only 6% of the revenue.

I spoke with Bob Schnoes, Hillman's successor at IC Industries about Hillman and he explained some background, perhaps, behind Hillman's odd remark. "Stanley was a financial guy. He was not an operating man. He didn't understand operations. He could read a balance sheet with the best of them, and arrange stock ratios for a merger, but operations just wasn't his strong suit."

To me, Hillman seemed like he would have been more comfortable with an NP-type operation, where he could see every station "pulling its weight" instead of all these places where the train never stops, just to get to some traffic 1700 miles down the line. I think that is why ICG went downhill under Hillman's management after he fired Allan Boyd. Hillman's background was in the tobacco industry. He saw railroading from a manufacturing process perspective with no background or understanding of the long haul/short haul dilemma of regulated era railroading.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Murph,

Just out of curiousity, are you using an abacus to derive your lumber sales figures?[;)]

I just do the math in my head-doesn't everybody?[;)]

[n012944]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Well, we disagree. I used the numbers for a specific purpose, and I stand by the purpose. Trying to apply them to a different purpose, to reach a different conclusion, is what I object to.

Fair enough.(shrugs) Then you should have no objections to me, as I still don't understand what you are trying to say.[:)] Carry on.

Murph,

Just out of curiousity, are you using an abacus to derive your lumber sales figures?[;)]

I understand what Michael is saying, as should anyone who has at least a college education. What Ken is alleging is simply untrue, aka his contention that real rail rates for hauling grain out of Montana have gone down, when in fact the real rate has gone up since the consolidation of the Hill Lines into BN and the departure of the Milwaukee. This even you can comprehend, if not be in agreement with, because even you understand the basic economic principles of "competition = lower rates; lack of competition = higher rates". Ken's allegation goes contrary to this basic economic tenet.

The proof is in the percentage of farmers' gross income going to transportation costs to get the grain from farm to market.
In 1980 the percentage of gross income going to pay for transporation was 10%.
In 2000 the percentage of gross income going to pay for transportation was something like 40% or 50%.

From 10% to 40% is what we in fly over country call a rate increase. Ken calls it a rate reduction. Hmmmm........

That argument works...unless the amout of the farmers gross income went down, then of course the percentage would go up.


Bert

[MichaelSol]

Looking at Ed's quaery:

Montana
1974: $4.24/bu, 26.5 bu per acre yield (5 year aver), $493,000,000 total winter wheat crop value (4 year aver), 4,795,000 acres planted (4 year average). Cost to ship to Portland, $1550.

2005: $3.60/bu, 28.9 bu per acre, $616,000,000 total winter wheat crop value, 5,417,000 acres planted. Cost to ship to Portland, $3,300.

[greyhounds]

QUOTE: Originally posted by MichaelSol

Looking at Ed's quaery:

Montana
1974: $4.24/bu, 26.5 bu per acre yield (5 year aver), $493,000,000 total winter wheat crop value (4 year aver), 4,795,000 acres planted (4 year average). Cost to ship to Portland, $1550.

2005: $3.60/bu, 28.9 bu per acre, $616,000,000 total winter wheat crop value, 5,417,000 acres planted. Cost to ship to Portland, $3,300.

Well, that pretty much says it all. For anyone wanting to check my math and the following inflation adjustments, here's a good site to use. -
www1.jsc.nasa.gov/bu2/inflateGDP.html

According to NASA the inflation index from 1974 to 2005 was 326.36. This means that it took $3.2636 in 2005 to buy what it only took $1.00 to buy in 1974. Now some goods and services went up more than that, some went up less than that.

The rail rates from Montana to Portland actually went down in constant dollar terms. They would have had to be $5,059 to keep up with inflation. Instead they were only $3,300, which respresents a decline in constatnt 1974 dollars from $1,550 to only $1,011. (previously, Sol had given an inflation index of 415 for the period. I'll take the NASA number over Sol's number.)

So what is the fuss all about? Why is FM making his silly statements that the rates went up because they take a greater percentage of the farmers' income? Well, look what happened to the price of wheat. Similarly adjusted to 1974 dollars it fell in value from $4.24/bu to $1.10/bu. Even with a slight increase in yield per acre, a farmer with 6,000 acres saw his inflation adjusted annual gross fall drastically from $674,160 in 1974 to only $191,273 in 2005. (1974 dollars)

The fact that his gross revenue fell at a faster rate than the rail charges went down caused the rail charges to become a larger percentage of his gross But that doesn't change the fact that the rail charges went down significantly.

The collapse of wheat prices is causing the problem. There's nothing anyone can do about the price of wheat. The farmers are behaving pecularly in the face of this price collapse. According to Sol they brought another 622,000 acres into production in response to a price collapse. Why would they do such a strange thing?

Well, it's my guess that those farm subsidies encourage the farmers to grow more unneeded wheat. The government takes money from the rest of us and pays them to loose money growing wheat that nobody needs.

Anyway, the rail rates did go down in constant dollar terms. That's all anyone can realistically expect the railraod to do? Of course, some people are not realistic.

Ken Strawbridge

[MichaelSol]

NASA, eh?

The index of inflation specifically applicable to rail rates shows deflation of approximately 50%. Why you wi***o tie rail rates to a CPI index of housing costs, price of autos and tea from China is beyond me.

The CPI is an average of specific rates of increase and decline in purchasing power of a dollar for specific items.

It is not some magical assessment of everything as you seem to believe. Rail rates aren't even included in the CPI, let alone bear any resemblence to it. The specific rate of inflation (deflation) is different for rail rates, markedly so, than for any of a number of indexes you might refer to: CPI, ECI, GDP Deflator, MPI, PPI, as these cumulative indexes themselves are only composed of individual indexes for appropriate commodities, goods, or services.

However, since you like NASA, here's what the results are from their calculator using a GDP Deflator:

1980: $1550.
2004 (est) $3130.30

During that year, actual rail rates at the point discussed ranged from $3,066 to $3,250, averaged $3,158.

Rates went up for Montana wheat shippers according to your choice of NASA's GDP Deflator calculator.

You probably want to stick with the CPI, because it would show that the inflation rate for consumer goods --houses, cars and french fries -- if applied to rail rates, would mean a freight charge in 2004 of $3552.00. Almost $400 more than your GDP index. Why the difference? It's $3771 using the ECI. Why don't you pick that one? It's only $1889 if you use the MPI; you wouldn't want that one, would you? NASA's "new start" inflation index would give you $3862. That's probably more up your alley.

The Producer Price Index, which probably more accurately reflects railroading costs (they are included in that index) -- closer than the french fry index, anyway -- shows that a carload of wheat should cost $2,523 to ship in 2004. Wow, that actual cost of $3,158 seems to show that Montana wheat shippers are really getting screwed, if you refer to a genuine, recognized, industrial price inflation index.

Cherry picking an irrelevant index will give you what you want, if you are interested in houses, cars, or french fries, or in fooling people with the price of french fries and how that really means rail rates, if that is your objective, which I think it is.

For rail rates, I'll stick with a rail rate index .

[greyhounds]

Now hold on there Mr. Sol.

First you said the rail charge was $1,550 in 1974.

Then you said the rail charge was $1,550 in 1980.

Well, which one was it? Or are you saying there was no change in the rail charge for that six year period? That would seem odd - given the high inflation of the time.

[MichaelSol]

Didn't change much between 1974 and 1977. By 1980, the last year the Milwaukee was in place, started inching up to about $1600 per carload, but that is just recollection. I seem to be the only one here who even attempts to offer data. There were huge volume increases, however, in those years. Fleet utilization alone was much higher.

In order for a carload cost in 1980 to equal the equivalent cost in 2003 (the general PPI index with the handy calculator stops there) according to the PPI, the rate in 1980 would have to be $2,026.2. A 1980 figure less than that means that rates have gone up since 1980, not down.

Several of the inflation indexes don't go back beyond 1980 so, for reasons I again reiterate, I am picking a 1980 figure as that represents the last year of Milwaukee in Montana, and fits with available rail rate data as well as available index data.

Rail rates for shippers in Montana, as a special case, have increased significantly over the past 25 years in real terms, in constant terms, in actual terms, however you want to phrase it, using either a rail rate index, a GDP Deflator Index, or the most closely related PPI index.

Rates of other wheat shippers have, in fact declined by those indexes.

[MichaelSol]

The actual producer price index for railroads is at:

http://data.bls.gov/cgi-bin/surveymost?pc

It is obviously a surprise to Ken Strawbridge that such a thing exists, but it does.

[MP173]

Michael:

You used 1974 rates for your response to me and then used the same rates for 1980 comparison. Six years are missing.

During those six years I remember wearing a WIN button (Whip Inflation Now). Remember those? What a bad time.

Thanks for the 1974 and the 2005 comparison. Those number really tell the story here. Montana farmers must complain about the BNSF, because they cannot complain about who purchases the wheat, they cannot complain about the increased fuel charges for running equipment, cannot complain about the fertilizer costs, cannot complain about the increased labor rates, etc. That leaves BNSF as the target.

Revenue per acre 1974 = $112.36 (before subsidy)
Revenue per acre 2005 = $104.04 (before subsidy)


Refresh my memory, how many bushels are in a covered hopper car?

ed

[rrandb]

After 21 pages the answer is the Milwaukee road disappeared because it was not economicaly sustainable. [2c] As always ENJOY

[kenneo]

Ed---------depends on the moisture content of the grain.

The railroad structure is built on weight standards (a 100 ton car grosses out at 263,000 lbs) so the actual number of bushels per car depends on 1) the weight of the wheat and 2) the capacity of the car in LBS, not cubic feet (which would be a bushel measure).

The figure, I think, that you are looking for is the design capacity for a particular product in a particular car design. This will not be the cubic capacity of the car since covered hoppers are built with a bit of excess cubic capacity to permit the "fluff" generated in loading to not limit a cubic full load (LFVC) should one be possible.

Just like in your cereal box "contents may settle", the cubic volume at loading for a given weight is higher than the cubic volume required for that same weight after settling of contents during transit .

[greyhounds]

QUOTE: Originally posted by MichaelSol

Didn't change much between 1974 and 1977. By 1980, the last year the Milwaukee was in place, started inching up to about $1600 per carload, but that is just recollection. I seem to be the only one here who even attempts to offer data. There were huge volume increases, however, in those years. Fleet utilization alone was much higher.

In order for a carload cost in 1980 to equal the equivalent cost in 2003 (the general PPI index with the handy calculator stops there) according to the PPI, the rate in 1980 would have to be $2,026.2. A 1980 figure less than that means that rates have gone up since 1980, not down.

Several of the inflation indexes don't go back beyond 1980 so, for reasons I again reiterate, I am picking a 1980 figure as that represents the last year of Milwaukee in Montana, and fits with available rail rate data as well as available index data.

Rail rates for shippers in Montana, as a special case, have increased significantly over the past 25 years in real terms, in constant terms, in actual terms, however you want to phrase it, using either a rail rate index, a GDP Deflator Index, or the most closely related PPI index.

Rates of other wheat shippers have, in fact declined by those indexes.

OK, I don't believe you. Leaving a rate unchanged from 1974 to 1980 would have ben suicide. But then the Milwaukee Road did die, didn't it. Maybe they laid off all the people working in grain pricing, who knows?

But while trying to find the real 1980 rate ( it was a slow day at work ), I found this:

rscc.mt.gov/docs/White_Paper_Meeting_10_05.pdf

That's on a Montana State Government website, and it's the "White Paper & Briefing Paper For Governor's (sic) Schweitzer's Meeting With Vice Chairman Doug Buttery, STB. (that's the Surface Transportation Board for those of you who live in Missoula.)
This analysis was prepared by the consulting firm of Whiteside & Associates of Billings, MT.

Go to page 16 and you will SEE that the BNSF is being wonderfully magnificent to the obsolete Montana wheat farmers. Now the rates per car mile from Montana to the export terminals in the Pacific Northwest should be higher than the per car mile rates from more distant origins. That's because there are far fewer line haul miles to spread the terminal costs over. (Terminal costs are the same regardles of length of haul.) But they're not!

Montana has a distinct advantage in rail rates according to the study.. Look at the column with $$ per mile. Great Falls to the PNW port is only $0.27/car mile, as is Ft. Benton. Heck, Bilings is but $0.30/mile. The highest charge in the state is only $0.34/mile from a place named "Moccasin".

In contrast, the report to the Governor's (sic) shows a price from Omaha of $0.43 per mile. Boy, how many competing railroads does Omaha have? And that wheat doesn't have to move through a PNW port. It can go out the Gulf, Great Lakes, or East Coast. Let's see, there's the CN, Iowa Interstate, BNSF, UP, and I recall KCS gets in there somehow

And let's not be forgetin' the Missouri River. Maintained at taxpayer expense to a navigable depth of 9 feet. Those barges are in there at Omaha lookin' for those grain loads.

All that, and yet the per mile rail rate from Omaha is far greater than the per mile rate from Great Falls, MT to a PNW port. What gives here?

It's a mistake. Whiteside & Associates flipped the numbers. They divided the miles by the dollars instead of the dollars by the miles. OK, everybody makes mistakes.

To show you what a decent guy I am, I called Whiteside & Associates this afternoon and told "The Lady That Answered The Phone" about their mistake.

But Crimeny! This thing has been out there since October, 2005 and nobody's caught this blatant error?. Aparently Governor Schweitzer (Dope-Montana) doesn't scutinize the information fed to him all that well, and neither do his aids. Heck! Fire!, this thing's been out their for seven monts at least and nobody in the Government of Montana has caught the error! They gotta' work on their public education system!

The real info comes on page 14 of the "White Paper" The graph of rates from 1981 though 2003 shows that the rates on Montana export wheat fell dramatically compared to the rate of inflation. In real, constant dollar terms, the rates went down dramaticlly.

The rates also are shown track very well with the rail cost index. BNSF just followed its cost. I'd like to be able to cite specifics, but Whiteside & Assoicates again screwed up. They did present a data table below the graph, but they did not format it right. Cost are show in 1/10ths of a dollar instead of cents. So we have rates shown as $0.7, $0.8, etc instead of $0.74 or $0.89

What the farmers of Montana, and their politicians, want is for the Federal Government to order the diversion of money from te BNSF to them. Well, Heck! Fire!, I'd like the government to divert some money to me, instead of from me. But that would be bad economic policy. As would the diversion of money to the obsolete Montana wheat farmers..

All in all, the Whiteside & Associates "study" is propaganda aimed at diverting income from people who have invested int the BNSF to peeple who have invested in Montana farmland. They don't present one valid reson, economically or ethically, for doing such a vile thing.
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Read it and weep. People in Montana used to be the embodiment of America. Now they seek government handouts. Read it and wep indeed.

Ken Strawbridge

[MichaelSol]

From three pages ago:

"The misunderstanding is now piled on top of greyhound's misunderstandings of what the gateway conditions were, and his misunderstanding of their effectiveness in the face of a documented record, compounded by his confusion that the Port of Seattle was the same thing as the entire Pacific Northwest. Added to that his assertion than intermodal trains of the era rarely exceeded 50 cars, even though Milwaukee’s routinely exceeded 100. That a reporting mark was the same thing as a railroad corporation. Then asserting that grain cars were easy to lease, oblivious to the fact that there was a well-known and well-documented grain car shortage due to the well-known and well-documented Russian wheat sales of the era. This is quite a record of outright mischief.

Today's misunderstanding involves the use of inflation indicators."

Three pages later, we have confirmed he has no idea what inflation even means in the freight rail industry and that he actually believed there was a Holy Inflation Rate, and that the rate used for french fries should apply to rail rates.

This thread represents a constant pattern with Strawbridge: uninformed, deceitful, and constantly talking about things the evidence shows he knows nothing about.

Well, this has turned from a Milwaukee thread into Strawbridge's usual Montana-bashing, farmer bashing, politican bashing and while he's at it, Whiteside & Associates gets their's too. Whatever they had to do with this thread. This crap happens over and over. The man's obsessed. There are better things to do. Good day.

[greyhounds]

Well, here's another insteresting thing from the Whiteside & Assoicates study.

"The Montana 52 car PNW Wheat Rates would be 39 cents/bushel lower today than they are if the BNSF had shared (emphasis added) the productivity gains adjustments with Montana farm producers." - p14, graph caption.

Well, that isn't what the graph shows. It shows that the rates would be $0.39/bushel lower if the BNSF gave the entire productivity gain to the farmers. Every last bit of it. And make no mistake, that's what the politicians and farmers of Montana want, every last bit of it.

The railroad had to improve its financial performance. It wasn't that it just "wanted" too, it had to. It could do this in two ways: 1) just raise its rates in real dollar terms and stick the farmers with the higher real dollar costs, or 2) make itself more efficient and reduce its costs while lowering the rates in real constant dollar terms.

The BNSF responsibly chose the 2nd way. It went to work and found more efficient ways to move the grain. (Unit trains, larger cars, larger and more efficient locomotives, better utilization of equipment through planning, etc.)
There's absolutely no reason for them to share their productivity gains with anyone here - the railroad did the work and made the investments. They should keep the rewards. Those farmers wouldn't willingly "share" their own productivity gains with the railroad, now would they?

As to Sol's aparent decision to quit the field - I think it's because decent public data, that everyone can see, has been located. We can all look at the Whiteside & Associates report and see the facts. (and correct obvious mistakes.) He can't move rates and years around to suite his arguments any more. So he's gone.

Ken Strawbridge