July TRAINS takes on the captive shipper debate - Best Issue Ever?

[Anonymous]

Here's a link to a mileage based grain rate system, courtesy DM&E:

http://www.dmerail.com/PDF/DME%204000-B%2020000-SERIES-GRAIN%20MILEAGE.pdf

I looked on the BNSF website but could not find any such mileage based rate offerings. Why is that?

[MP173]

It appears, tho I certainly might be wrong, that a couple of things occured that resulted in the inverse rates:

1. Up to that point markets considered "traditional" (Montana & Dakota) had been supplying a large amount of wheat to PNW for export.
2. At some point "traditional" markets either could not supply or would not supply wheat for export markets.
3. Since the grain was not moving (the comment was made to wait for higher prices) BNSF's cars were not being utilized.
4. Obviously, some sharp operator, either being on the supply side or demand side put together a rate to move the wheat to PNW to meet the contracts.
5. BNSF with assets idle moved the wheat.

Otherwise, why would they pass on the higher rate from Montana? If the grain was moving from Montana, then the higher rates would have resulted in higher revenue and possibly higher profits. The grain wasnt moving and someone stepped in and took advantage of the situation.

Further, the use of contract rates on the Minnesota shuttle trains confirms this. Contract rates are between two parties and are not subject to being open. But, the most important aspect of the contract (at least in my mind) would have been as time limit...in other words the contract rates moved the grain for a specific contract.

Also, it indicates that the inverse pricing has been eliminated but Mr. Rose reserves the right to re-instate those rates. Obviously, if the situation warrents, then Mr. Rose will utilize his assets, rather than sit by.

Reading between the lines...that is my take on the subject.

ed

[bobwilcox]

QUOTE: Originally posted by futuremodal

I looked on the BNSF website but could not find any such mileage based rate offerings. Why is that?

Dave-why don't use the BNSF website to ask them?

[MichaelSol]

QUOTE: Originally posted by MP173
Also, it indicates that the inverse pricing has been eliminated but Mr. Rose reserves the right to re-instate those rates. Obviously, if the situation warrents, then Mr. Rose will utilize his assets, rather than sit by.

Reading between the lines...that is my take on the subject.

Drought didn't have much to do with anything on a price received basis. Ordinarily an actual shortage of grain results in higher prices. That wasn't the case, which throws greyhounds whole theory into the crock.

Indeed, the opposite was true. It was a very sluggish market. More so at Duluth -- the traditional destination for Minnesota export wheat, generally receiving between $3.44/bu and $3.59.

Portland wasn't any great shakes either compared to its historical range, and that year varied between $3.97-$4.51 (HRS)/bu. Those are simply not "shortage" prices.

But, the disparity compared to Duluth was signficant. BNSF's "claim" that there was demand in Portland doesn't match with the prices being received.

None of these prices suggest a drought-provoked shortage of wheat. Rather, and especially in Minnesota, you can see famers holding onto their wheat hoping for a better price, all across the Nortthern Tier.

I have to laugh because In competitive days, when this happened, BN was adamant about not dropping rates to get equipment utilized. The policy was, outwait the farmers, let the equipment sit. The Milwaukee would step in, drop the rate 15% for a week, get all the orders it needed to keep its fleet up to full utilization, and BN would scream, then grudgingly go along.

No secret contracts, everyone was treated fairly and equally, the market responded rationally, and everyone was happy.

The problem in 2001 was (if this was greyhounds talking) no one wanted that crappy Midwest wheat, and so nothing was moving back there. So, secret contracts were entered into for cheap rates, to upset a completely different wheat market, put a quality of wheat that the buyers werent' expecting into the supply chain, but there's more.

The whole idea of efficient "markets" is transparency. There is no "market" if there are secret contracts.

Now, how "efficient" is consuming energy and equipment and resources to move wheat 1600-2000 miles -- at half the profit to the railroad -- when there is plenty of wheat at a third the distance, at twice the profit to the railroad. Energy efficiency in all this? Hah! Equipment efficiency -- can you imagine the cycle time stretch on that Minnesota wheat? Think about that one for a minute.

The cycle time increase is perhaps about between 2 and 4:1 compared to Montana wheat.

Fleet utilization? You bet it goes up -- it has to. If a Railroad wants to spend money and wear and tear and fuel, just double, triple, quadruple the cycle time.

Yeah, equipment utilization goes up -- in a very twisted, economically inefficient sort of way. I think this underscores how captive pricing distorts the economic efficiency of the market process, and specifically produces inefficient production costs and specifically creates inefficient use of essential resources. No better example than this one.

Look at an inverse rate on that to Portland.

Today's rates:
Shelby, 781 miles, $2681.
Alberta, MN, 1640 miles, $3863.

To be "inverse" the Alberta rate would have to be less than Shelby's. So, 1640 miles for $2680. Yet the cycle time at Shelby is about 8 days, from Alberta, about 20.

You can put together an interesting R/VC study from earlier posts as to what the railroad might really be earning from charging a much lower rate while incurring hugely extended cycle times, and significanty increased equipment, fuel, and crew costs.

I wouldn't hand the "Order of Lenin" to Matt Rose just yet ....

[n012944]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by TomDiehl

So what you're saying is the links you offered here refute a link you offered on an earlier post.

Talking in circles again, I see.

More evidence you're not even looking at the links you offer as "proof" of your position.

[(-D]

This is so simple even you should be able to get it.[sigh]

The AAR and CABT links were provided as proof the rail industry has played a major role in lobbying for stricter GVW limits. As part and parcel of this lobbying effort, both AAR and CABT will naturally claim that the trucking industry also supports stricter GVW limits. This refutes Bert's claim that the railroad industry had nothing to do with efforts to enact stricter GVW limits.

However, the ATA refutes this false claim by the AAR and CABT, since the ATA has come out in favor of higher GVW limits. This refutes Bert's subsequent claim that the trucking industry supports stricter GVW limits.

And in conformity with predictable double digit IQ responses, Tom then goes on to claim circular reasoning on my part.

Tom, it is the AAR, not myself, who claims trucking industry support for stricter GVW limits. The ATA site refutes this, ergo it is the AAR that has published a false premise. I am aware of this tendency to falsify information on the part of the AAR, I have commented on it several times in the past.

Let's make a deal: We'll let the AAR speak for the rail industry, and we'll let the ATA speak for the trucking industry. Okay?

The AAR and the ATA had an agreement about there being no increase in the GVW limits right? Then the ATA SUPPORTED that there was to be no increase of the GVW limits.[banghead][banghead][banghead][banghead][banghead][banghead] Let me say this one more time, by entering in an agreement with the AAR, the ATA opposed an increase in GVW limits, just as the AAR oppossed an decrease in GVW limits.[banghead][banghead][banghead][banghead][banghead][banghead][censored]

[MichaelSol]

Well, I am not following this thread within a thread about trucking too well. I guess my impression is that the ATA wants to increase weight limits, and remove other restrictions as well, on federal highways. I do recall that the AAR was opposed.

Before the
SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE
COMMERCE, SCIENCE AND TRANSPORTATION COMMITTEE
and
SUBCOMMITTEE ON TRANSPORTATION, INFRASTRUCTURE AND NUCLEAR SAFETY ENVIRONMENT AND PUBLIC WORKS COMMITTEE
UNITED STATES SENATE

Statement of
AMERICAN TRUCKING ASSOCIATION, INC.
On FREIGHT TRANSPORTATION
Michael W. Wickham
Chairman and CEO, Roadway Corporation
Akron, OH
September 9, 2002

An effective approach to saving lives, relieving congestion and improving air quality is to reduce the number of trucks on American roads. Given a fixed amount of freight for America’s trucks to move, the only way to reduce the number of trucks is to improve the productivity of the trucks themselves, and of their drivers. This is analogous to carpooling – it increases capacity without increasing the road lane-miles. To improve truck productivity, federal size and weight regulations must be reformed.

Federal law currently limits States’ ability to control size and weight on their own highways. The limits imposed are lower than those mandated by other nations’ governments, including our northern and southern neighbors, who are major trade partners and business competitors. This creates an economic disadvantage for American businesses and it causes additional costs and administrative problems when it comes to moving international freight, including intermodal containers.

There has been no legislative relief to these laws in 20 years, despite considerable improvements in truck safety and better driver training. Decades of experience and volumes of research indicate that more productive vehicles can be safely operated without a detrimental effect on safety or the condition of highways and bridges.[23]

At the request of Congress, the Transportation Research Board (TRB) recently issued a new report on the impacts of federal truck size and weight regulations.[24] Among the report’s conclusions was that the largely static and inflexible system of federal regulation that currently exists “…discourages private- and public-sector innovation aimed at improving highway efficiency and reducing the costs of truck traffic…,” including costs related to accidents involving trucks.[25]

In a nutshell, the TRB report concludes that states should be given greater authority, with strong federal oversight, to make decisions with regard to the size and weight limits of trucks on highways under their jurisdiction. This reflects ATA’s own policy. TRB further recommends that federal regulatory oversight of weight limits should not be extended to the NHS, as H.R. 3132, the Safe Highways and Infrastructure Preservation Act (SHIPA) seeks to do.[26]

There is no doubt that continuing or further restricting current federal size and weight limits will cost lives. While it would not make sense from a safety or economic standpoint to allow larger or heavier trucks to operate on every highway or in every state, Congress cannot continue to ignore the growing body of evidence that supports the fact that opportunities to prevent accidents through size and weight reform are available. Those states that identify these opportunities should be allowed to take advantage of them.

Allowing the expanded operation of more productive trucks would have two safety benefits. First, carriers would need fewer trucks to haul a given amount of freight, reducing accident exposure. Second, studies have consistently found that certain trucks with greater carrying capacity have a much better safety record than trucks that are in common use today. A study sponsored by the Federal Highway Administration found that the accident rate for longer combination vehicles (LCVs) is half that of other trucks.[27]

A recent Canadian study found that LCVs have an accident rate that is five times lower than the rate for tractor-semitrailers.[28] This study also found that during the 10-year period after LCVs were authorized to operate on a large scale in Alberta Province, the number of registered trucks dropped by 19 percent, even though the economy grew and non-truck vehicle registrations grew by 23 percent. The report concluded that increased truck productivity due to expanded LCV use was the most likely reason for this reduction in truck registrations.

In Nevada last year, just .02 percent of vehicles involved in an accident were triples.[29] Of the more than 36,000 accidents in Montana, including 1,326 accidents involving trucks, just one accident involved a triple. The year before, there were two triples accidents in Montana, in 1999 there was one, and in 1998 there were none. [30] In Colorado, of the 4,226 accidents involving trucks in 2000, just nine involved triples; none of the triples accidents involved a fatality.[31]

This data reflects Roadway Corporation’s experience with triple-trailer trucks. Since 1990, Roadway triples have been involved in exactly one fatal accident. That is one fatal accident in over 155 million miles of travel. Last year, there were just five accidents involving Roadway triples, one accident every 2.5 million miles. By comparison, on average, all vehicles nationwide are involved in an accident every 430,000 miles.[32] Triples are by far the safest trucks in our fleet and among the safest vehicles on the highway.

Furthermore, Congress and the States can avoid large investments in pavement maintenance and rehabilitation, as well as capacity expansion, by allowing States to make common-sense changes to their size and weight regulations. Gross weight can increase exponentially and not cause additional pavement damage so long as axle-weight is controlled. This is why, for example, a turnpike double that weighs 126,000 pounds causes half the damage of an 80,000 pound tractor-semitrailer on a ton-mile basis. In addition, if trucks are able to ship the same amount of freight in fewer trucks, the need for capacity expansion could be avoided, fuel use and emissions could be lowered, and costs to American manufacturers and consumers could come down.

[n012944]

From ATA's website:





"As veteran Members of Congress know, truck size and weight is a perennial issue of controversy during highway reauthorization debates. Last year, ATA and the Association of American Railroads (AAR) put our differences on this issue aside and agreed to oppose wholesale changes to size and weight law so that Congress can attend to other important reauthorization matters without the distraction of a size and weight controversy. ATA urges Members to join with the trucking and railroad industries in rejecting SHIPA or any other efforts to roll back current size and weight regulations.
Sincerely,
Jim Whittinghill
Senior Vice President
Legislative Affairs"



Bert

[MichaelSol]

Interesting. I am wondering what ATA "gets" out of an agreement with AAR, or vice-versa .... Comparing that to ATA's comments previously, does that mean ATA is coming down on the side of more dangerous, rather than less dangerous, trucking regulations? On the other hand, there is nothing there about removing weight restrictions, only that they agree "to join with the trucking and railroad industries in rejecting SHIPA or any other efforts to roll back current size and weight regulations".

Does that mean they have only agreed not to "reduce" weight limits? Well, why would they?

I don't follow trucking so pardon my ignorance here, but is there "less than meets the eye" to that statement?

[n012944]

QUOTE: Originally posted by MichaelSol

Interesting. I am wondering what ATA "gets" out of an agreement with AAR, or vice-versa .... Comparing that to ATA's comments previously, does that mean ATA is coming down on the side of more dangerous, rather than less dangerous, trucking regulations? On the other hand, there is nothing there about removing weight restrictions, only that they agree "to join with the trucking and railroad industries in rejecting SHIPA or any other efforts to roll back current size and weight regulations".

Does that mean they have only agreed not to "reduce" weight limits? Well, why would they?

I don't follow trucking so pardon my ignorance here, but is there "less than meets the eye" to that statement?

They oppose wholesale changes to size and weight law, meaning they don't want it raised or lowered.


Bert

[MichaelSol]

QUOTE: Originally posted by n012944

They oppose wholesale changes to size and weight law, meaning they don't want it raised or lowered.

Agreeing not to make it an issue for the time being and saying they "don't want it" raised is probably stretching the meaning a bit.

[n012944]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944

They oppose wholesale changes to size and weight law, meaning they don't want it raised or lowered.

Agreeing not to make it an issue for the time being and saying they "don't want it" raised is probably stretching the meaning a bit.

op·pose
v. op·posed, op·pos·ing, op·pos·es
v. tr.
To be in contention or conflict with: oppose the enemy force.
To be resistant to: opposes new ideas.
To place opposite in contrast or counterbalance.
To place so as to be opposite something else.

v. intr.
To act or be in opposition.

Bert

[MichaelSol]

Getting pretty technical there about a small point ...

[n012944]

QUOTE: Originally posted by MichaelSol

Interesting. I am wondering what ATA "gets" out of an agreement with AAR, or vice-versa .... Comparing that to ATA's comments previously, does that mean ATA is coming down on the side of more dangerous, rather than less dangerous, trucking regulations?

I did find that interesting, the post that had from the ATA seemed to say that the current way of doing trucking is dangerous. Seemed like an odd argument. Also with trucks interacting with people that are not all that great of drivers, do you really want to see a triple do a panic stop?

Bert

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Well, I am not reciting definitions.

The point was that ATA pretty clearly expressed it's "wants." "Agreements"on the other hand usually represent a delayed gratification or sacrifice of such "wants" in return for achieving a short term goal, receipt of satisfaction of a different "want" or some other strategic advantage.

That's the nature of "agreements."

Agreeing to forego temporarily a prior "want" is, in my experience, not the same thing as saying "they don't want it."

Indeed, I note that the quote from ATA above is dated February 10, 2004.

More recently, ATA was stating the following:

"If the industry doesn’t become more productive, if we can’t substantially reduce our empty miles or wait times at loading docks, and if we don’t have more rational size-and-weight regulations, the number of trucks on the road and the number of miles trucks drive will double in the next two decades."
Bill Graves, President and CEO, American Trucking Associations
Appeared in November-December 2005 issue of Transportation Builder

A "small point" about the difference between "wants" and "agreements" and that one is not always the other.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Oh, Murphy. Shame on you! Must you always degrade these topics with your subtle misplaced insolence. You're better than that.[V][V][V][V][V][V][V][V][V][V]













[:p]

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Oh, Murphy. Shame on you! Must you always degrade these topics with your subtle misplaced insolence. You're better than that.[V][V][V][V][V][V][V][V][V][V]
[:p]

[(-D][(-D][(-D] Fair enough, I guess you owe me that one.[;)] I'll have to research the meaning of misplaced insolence,though.[:)]

[greyhounds]

QUOTE: Originally posted by MichaelSol

[I have to laugh because In competitive days, when this happened, BN was adamant about not dropping rates to get equipment utilized. The policy was, outwait the farmers, let the equipment sit. The Milwaukee would step in, drop the rate 15% for a week, get all the orders it needed to keep its fleet up to full utilization, and BN would scream, then grudgingly go along.


Yeah, equipment utilization goes up -- in a very twisted, economically inefficient sort of way. I think this underscores how captive pricing distorts the economic efficiency of the market process, and specifically produces inefficient production costs and specifically creates inefficient use of essential resources. No better example than this one.

Look at an inverse rate on that to Portland.

Today's rates:
Shelby, 781 miles, $2681.
Alberta, MN, 1640 miles, $3863.

To be "inverse" the Alberta rate would have to be less than Shelby's. So, 1640 miles for $2680. Yet the cycle time at Shelby is about 8 days, from Alberta, about 20.

You can put together an interesting R/VC study from earlier posts as to what the railroad might really be earning from charging a much lower rate while incurring hugely extended cycle times, and significanty increased equipment, fuel, and crew costs.

I wouldn't hand the "Order of Lenin" to Matt Rose just yet ....

Well, I don't think Mr. Rose would accept the "Order of Lenin".

And I have significant doubts as to as if the Milwaukee Road could run "specials" on its wheat pricing for a week at a time in the regulated days. The barges would have protested, the truckers would have protested and the BN would have protested before the ICC. And those regulators took a dim view of messing with the 'rate structure', especially on a weekly basis.

But, as ususal, Sol has provided no specifics to support his story, so we can all make our own individual deceisions as to if we take his word for it or not.

As to the inverse rates, which were a shrewd and ethical response on the part of the BNSF to diminished grain business due to a drought, I don't think Sol "gets it".

Variable costs do not come into play. When your back is against a wall, as the BNSF's was in this situation, you go for cash. And most of the "costs" he cites were definitely not cash costs in this specific situation. For example, there were no equipment costs.

Normally, equipment costs are considered variable and must be covered in full by a rate. But if your olnly aternative is to store the equipment, as it was here, its ownership costs are no longer important. The railroad was going to incur those costs whether it hauled the wheat out of Minnesota or not. Cycle times meant nothing, as stored equipment has an infinte cycle time. Anything you get is an improvement.

Laid off crews aren't free either.

It's better to get some money flowing in, even if it's not enough to cover what would normally be considered variable costs. As long as the trains produced a positive cash flow, they were the best possible temporary soluntion to the drought crisis. (Fuel would have been an out of pocket cash cost that could have been avoided by not running the trains.)

Sol's attempt to ladden these trains with equipment costs, etc. is, to me, just another example of his own inablility to process information in a meaningful way.

Ken Strawbridge

[bobwilcox]

Michaiel-What are the tariff references for the MILW putting this reduction into effect and then cancelling the rates one week later? Perhaps this is just a fantasy by someone that does not understand the world of railroad rates before Staggers.

QUOTE: Originally posted by MichaelSol
The Milwaukee would step in, drop the rate 15% for a week, get all the orders it needed to keep its fleet up to full utilization, and BN would scream, then grudgingly go along.

[MichaelSol]

"We were able to aboli***he helper districts in 1974. Your note reminds me that we did put some power on some hills for a few days in 1977, or possibly 1978. I think it was 1978. It was summer, and for some reason there wasn't much grain moving, but we knew there was quite a bit of storage overhang out in the elevators. The harvest season was coming up and of course that's when all of a sudden the new crop doesn't have anywhere to go because there is old grain sitting there. Then all of sudden, the railroads don't have enough cars, of course. Well, we had some empty cars sitting around, and there was a lot of grain out there. It made sense for us to anticipate the upcoming season and help everyone by getting that grain out. We dropped our rate by 15% for a very short period, a week or so. Just to fill up those empty grain cars. Make some money." WL Smith to Sol, 8.14.2002

Now, BN almost always put out a press-release decrying these actions, bringing as much attention to them as possible. I recall them well, as I thought they were a form of free advertising for their competitor and wondered what the strategy was.

Maybe neither railroad understood the "world of railroad rates" prior to Staggers. In that instance, "all I know is what I read in the newspaper." Apologies to Will Rogers

[MichaelSol]

QUOTE: Originally posted by greyhounds
As to the inverse rates, which were a shrewd and ethical response on the part of the BNSF to diminished grain business due to a drought, I don't think Sol "gets it".

Of course, dropping rates for existing grain stocks normally part of that particular wheat market, a wheat quality for which buyers were prepared, makes no sense when you can increase your operating costs instead.

QUOTE: Variable costs do not come into play. When your back is against a wall, as the BNSF's was in this situation, you go for cash. And most of the "costs" he cites were definitely not cash costs in this specific situation. For example, there were no equipment costs.

Fuel, wear and tear, no crew costs, this just gets more and more bizarre -- "variable costs do not come into play" on a tripled cycle time. Of course, in 2004 and 2005, when terminal time at Pasco was exceeding 30 hours, it made tons of sense to run a few more grain trains through there. Fleet turns were down to 1.4 and 1.3 per month-- no congestion costs either?

QUOTE: Cycle times meant nothing, as stored equipment has an infinte cycle time. Anything you get is an improvement.

This assumes the equipment was idle at the time. There actually is no proof for this, at the times and places discussed, at all. The entire hypothetical that Strawbridge offered for this "reasoning" is entirely hypothetical in the first place.

QUOTE: As long as the trains produced a positive cash flow, they were the best possible temporary soluntion to the drought crisis.

Could have made more money with lower costs by a rate reduction in the normal market area. The argument makes no sense.

Further, Strawbridge stubbornly ignores the key evidence here: the market. The prices offered don't fit his theory in the slightest. Prices in Portland were demonstrably not "drought" prices. There were tons of wheat sitting in Montana. Prices in Duluth simply stunk, and nobody in Minnesota was selling. Strawbrige ignores the key published evidence that demolishes his whole theory. Something about "processing information ..."

QUOTE:
Sol's attempt to ladden these trains with equipment costs, etc. is, to me, just another example of his own inablility to process information in a meaningful way.

I am sure you have by now really ticked off BobWilcox and he will weigh in with his usual, "when you don't have the facts, attack the person" caveat. Oh wait, he's pretty selective on that ....

[n012944]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Well, I am not reciting definitions.

Indeed, I note that the quote from ATA above is dated February 10, 2004.

Just as the quote you used was from September 9, 2002

Bert

[MichaelSol]

QUOTE: Originally posted by n012944

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Well, I am not reciting definitions.

Indeed, I note that the quote from ATA above is dated February 10, 2004.

Just as the quote you used was from September 9, 2002

Bert

It is absolutely true that I put the date on my citation. Guilty as charged.

It absolutely true that you did not put a date on your citation, only that it was from the "ATA" website. I think my initial assumption by your post was to assume that it was a current statement.

It is absolutely also true that the most recent citation I used was issued nearly two and one half years after the citation you quoted, and yes, I also specifically cited that date as well.

I think we are in total agreement as to the timeline of these statements. What's the problem?

[bobwilcox]

QUOTE: Originally posted by MichaelSol

"We were able to aboli***he helper districts in 1974. Your note reminds me that we did put some power on some hills for a few days in 1977, or possibly 1978. I think it was 1978. It was summer, and for some reason there wasn't much grain moving, but we knew there was quite a bit of storage overhang out in the elevators. The harvest season was coming up and of course that's when all of a sudden the new crop doesn't have anywhere to go because there is old grain sitting there. Then all of sudden, the railroads don't have enough cars, of course. Well, we had some empty cars sitting around, and there was a lot of grain out there. It made sense for us to anticipate the upcoming season and help everyone by getting that grain out. We dropped our rate by 15% for a very short period, a week or so. Just to fill up those empty grain cars. Make some money." WL Smith to Sol, 8.14.2002

Now, BN almost always put out a press-release decrying these actions, bringing as much attention to them as possible. I recall them well, as I thought they were a form of free advertising for their competitor and wondered what the strategy was.

Maybe neither railroad understood the "world of railroad rates" prior to Staggers. In that instance, "all I know is what I read in the newspaper." Apologies to Will Rogers

I think someone is pulling your chain. If you really beleve this, meet me in Brooklyn I've got bridge for sale.

[MichaelSol]

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by MichaelSol

"We were able to aboli***he helper districts in 1974. Your note reminds me that we did put some power on some hills for a few days in 1977, or possibly 1978. I think it was 1978. It was summer, and for some reason there wasn't much grain moving, but we knew there was quite a bit of storage overhang out in the elevators. The harvest season was coming up and of course that's when all of a sudden the new crop doesn't have anywhere to go because there is old grain sitting there. Then all of sudden, the railroads don't have enough cars, of course. Well, we had some empty cars sitting around, and there was a lot of grain out there. It made sense for us to anticipate the upcoming season and help everyone by getting that grain out. We dropped our rate by 15% for a very short period, a week or so. Just to fill up those empty grain cars. Make some money." WL Smith to Sol, 8.14.2002

Now, BN almost always put out a press-release decrying these actions, bringing as much attention to them as possible. I recall them well, as I thought they were a form of free advertising for their competitor and wondered what the strategy was.

Maybe neither railroad understood the "world of railroad rates" prior to Staggers. In that instance, "all I know is what I read in the newspaper." Apologies to Will Rogers

I think someone is pulling your chain. If you really beleve this, meet me in Brooklyn I've got bridge for sale.

I'll bet you do. How much did you pay for it?

[greyhounds]

QUOTE: Originally posted by MichaelSol


Further, Strawbridge stubbornly ignores the key evidence here: the market. The prices offered don't fit his theory in the slightest. Prices in Portland were demonstrably not "drought" prices. There were tons of wheat sitting in Montana. Prices in Duluth simply stunk, and nobody in Minnesota was selling. Strawbrige ignores the key published evidence that demolishes his whole theory. Something about "processing information ..."

Well, now Sol is attempting to rewrite history by eliminating the severe drought that hit Montana. His so called 'proof' - the prices didn't reflect drought condidtions. Well, according to Montana State University there was a drought that knocked the crap out of Montana wheat production - while prices remained very low.

www.montana.edu/wwwpb/ag/02outlk.html

The explination, there was no drought in other parts of the the world where wheat is grown. Buyers simply shifted their source of supply to those areas where it rained.

The BNSF needed to keep its resouces in use as best it could, so it wisely instituted the temporary "inverse rate" plan.

Sol now denies history. There was a severe drought. Wheat prices remained low despite the drought because wheat could be sourced elsewhere in the world.

[n012944]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Getting pretty technical there about a small point ...

Yes, I agree with you Michael. You are.

Well, I am not reciting definitions.

Indeed, I note that the quote from ATA above is dated February 10, 2004.

Just as the quote you used was from September 9, 2002

Bert

I think my initial assumption by your post was to assume that it was a current statement

You know what they say when you ASSuME something.


Bert

[MichaelSol]

QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by MichaelSol


Further, Strawbridge stubbornly ignores the key evidence here: the market. The prices offered don't fit his theory in the slightest. Prices in Portland were demonstrably not "drought" prices. There were tons of wheat sitting in Montana. Prices in Duluth simply stunk, and nobody in Minnesota was selling. Strawbrige ignores the key published evidence that demolishes his whole theory. Something about "processing information ..."

Well, now Sol is attempting to rewrite history by eliminating the severe drought that hit Montana. His so called 'proof' - the prices didn't reflect drought condidtions. Well, according to Montana State University there was a drought that knocked the crap out of Montana wheat production - while prices remained very low.

www.montana.edu/wwwpb/ag/02outlk.html

The explination, there was no drought in other parts of the the world where wheat is grown. Buyers simply shifted their source of supply to those areas where it rained.

The BNSF needed to keep its resouces in use as best it could, so it wisely instituted the temporary "inverse rate" plan.

Sol now denies history. There was a severe drought. Wheat prices remained low despite the drought because wheat could be sourced elsewhere in the world.

"History" also includes storage.

"The BNSF says these inverse rates from eastern locations are necessary to supply needs of the PNW export market. That is simply not true. According to the Montana Grain Growers Association, quoting the Montana Ag Statistics Service, there were 79 million bushels of spring wheat in Montana on December 1, 2001. Millions more bushels are in western North Dakota."

US Senate Testimony, March 27, 2002, North Dakota Grain Dealers Association, Steve Strege.

I am guessing you don't know that.

As usual.

I suppose you wouldn't care to note that the drought was widespread -- Minnesota's wheat production in 2002 was the lowest in nearly 15 years, and that its total wheat production that year was less than what Montana had just in storage.

But, that doesn't fit your agenda, does it?

Look at Montana and North Dakota combined in 2002: 326,000,000 bushels production, compared to Minnesota at 62,420,000 bushels

BNSF really had to go looking for that Minnesota wheat, didn't it?

[MichaelSol]

QUOTE: Originally posted by n012944

You know what they say when you ASSuME something.

Bert

You just made that up didn't you? Brings a nice sharp touch to the conversation.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944

You know what they say when you ASSuME something.

Bert

You just made that up didn't you? Brings a nice sharp touch to the conversation.

I hope you meant that sarcastically, Michael. That one's been around for a LONG time.