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

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Posted by MichaelSol on Wednesday, June 7, 2006 11:47 PM
QUOTE: Originally posted by rrandb

Nice try Micheal. What I said was many companies charge different prices for the same sevices (products). I offered the airlines as an example. Exact same service with dramatically different prices. Happens everyday. Fred can charge more for his JD mower if he's not next door to HD. He can make the same amount or more per mower as HD but he will never sell as many. The majority of rail shippers are captive to the line they built next to. More so in the west than the developed areas of the coast's or mississippi valley. Being served by more than one rail shipper is the exception not the rule. You yourself stated that grain shippers pay the same or less per carload (when adjusted for inflation) today than they did 30 years ago. There complaint is they are paying more than there competitors are who are shipping from a more cost effective location transportation wise.

Well, you are changing what you say so often, it's hard to keep up. Most shippers built when rates were regulated; no basis for your contention that captive shippers were "the rule" suggesting wrongly that different rates were charged to them. Simply false.

I see you are back to the cost basis for rates, and that lower rates means it is a "more cost effective location." Doesn't survive the rate comparison test. A single car is not more cost effective to move than a car in a unit train. Location doesn't matter.

Grain shippers pay less per carload than 30 years ago. I also said that captive shippers pay more, notwithstanding the plummeting of the cost basis for providing the service.
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Posted by greyhounds on Thursday, June 8, 2006 12:02 AM
QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by jeaton
2. The new laws will have the desired effect of lowering rates charged to formerly captive shippers. As a result there will be reductions in railroad revenue and cash flow, which will mean a reduction in the rate of capacity expansion.

Of course, with this remark, you give up the game. You are conceding that railroads are using revenue from captive shippers to finance capacity expansion for non-captive shippers -- i.e. non-captive shipper revenue that does not generate a sufficient rate of return on its own to finance the additional capacity necessary to carry more of it.

I happen to agree entirely that is exactly the game, and your diagnosis can be nothing but true, for so long as railroads divert their resources from productive traffice to traffic that does not generate a sufficient rate of return to finance the solutions to the congestion problems created by ... low rates and low rates of return.

The old railroad conundrum -- noncompensatory rates -- in a new dress.




No.

No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return"

Why on earth would any sane person do that? Your statements make no sense.

The railroads are not in business to haul freight and run trains. They are in business to increase the wealth of their shareholders. Sol is saying they **** away their shareholders' wealth so they can run more trains. They're not doing that.

The capacity expansions are analyzed and those studies indicate they will pay for themselves. If they won't they won't be built.

Now sometimes the analysis can be wrong. No one can see the future with certainty. But to say, as Sol has done, that the railroads are adding capacity that will dimini***heir income is basically silly. They don't run trains for the sake of running trains.

Sol is saying railroad management intentionally makes non-productive investments. They don't.

Ken Strawbridge
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by MichaelSol on Thursday, June 8, 2006 12:06 AM
Well, now we know why railroads couldn't earn their cost of capital over the past 80 years. Ken Strawbridge says that "the railroads are not in business to haul freight and run trains. They are in business to increase the wealth of their shareholders."

Of course, it's all so easy and clear. If they had just listened to Strawbridge. All railroads had to do was repeat three times, "we are not in the business to haul freight and run trains" and everything would have been just fine, and will be just fine now.
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Posted by greyhounds on Thursday, June 8, 2006 12:11 AM
QUOTE: Originally posted by MichaelSol

Well, now we know why railroads couldn't earn their cost of capital over the past 80 years. Ken Strawbridge says that "the railroads are not in business to haul freight and run trains. They are in business to increase the wealth of their shareholders."

Of course, it's all so easy and clear. If they had just listened to Strawbridge. All railroads had to do was repeat three times, "we are not in the business to haul freight and run trains" and everything would have been just fine, and will be just fine now.


Which is exactly why capcity declined and they're now playing catch up after years of government opression and government forced diversion of profitable freight to highway.

Ken Strawbridge
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by MichaelSol on Thursday, June 8, 2006 12:14 AM
QUOTE: Originally posted by greyhounds
But to say, as Sol has done, that the railroads are adding capacity that will dimini***heir income is basically silly.

While it is akin to pounding on a poor dead horse to suggest that Strawbridge makes things up to generate controversy, I said nothing about diminishing income. What I did say was that the income was insufficient to justify the investment.
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Posted by MichaelSol on Thursday, June 8, 2006 12:16 AM
QUOTE: Originally posted by greyhounds
Which is exactly why capcity declined and they're now playing catch up after years of government opression and government forced diversion of profitable freight to highway.

Deregulation occured 26 years ago, and railroads just "now" decided to play catch-up?

Wow. And which current events are you still blaming on the Civil War?
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Posted by greyhounds on Thursday, June 8, 2006 12:28 AM
QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
But to say, as Sol has done, that the railroads are adding capacity that will dimini***heir income is basically silly.

While it is akin to pounding on a poor dead horse to suggest that Strawbridge makes things up to generate controversy, I said nothing about diminishing income. What I did say was that the income was insufficient to justify the investment.


Right here:

QUOTE: Originally posted by MichaelSol




Of course, with this remark, you give up the game. You are conceding that railroads are using revenue from captive shippers to finance capacity expansion for non-captive shippers -- i.e. non-captive shipper revenue that does not generate a sufficient rate of return on its own to finance the additional capacity necessary to carry more of it.

I happen to agree entirely that is exactly the game, and your diagnosis can be nothing but true, for so long as railroads divert their resources from productive traffic to traffic that does not generate a sufficient rate of return to finance the solutions to the congestion problems created by ... low rates and low rates of return.

The old railroad conundrum -- noncompensatory rates -- in a new dress.


Ken Strawbridge
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by rrandb on Thursday, June 8, 2006 12:38 AM
Location apparently matters to those who feel others are getting a better rate because of where they are shipping to and from. Since most rail shippers are " captive " the railroads should be making profits in line with the oil companies. They are not. And where on earth did you get the notion that improvements in infrastute only benifit certain shippers. If I have sold X numbers of carloads of grain to be shipped for export based on the ship sailing on a specific date then I need the railroad to have the capacity to get it there in time just as much as any other shipper. The improvements are needed not just on the line that pulls up to my elevator but all the way to the port. While we all will pay for it one way or the other how do you propose that the pie be split.
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Posted by MichaelSol on Thursday, June 8, 2006 12:43 AM
QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
But to say, as Sol has done, that the railroads are adding capacity that will dimini***heir income is basically silly.

While it is akin to pounding on a poor dead horse to suggest that Strawbridge makes things up to generate controversy, I said nothing about diminishing income. What I did say was that the income was insufficient to justify the investment.


Right here:

QUOTE: Originally posted by MichaelSol




Of course, with this remark, you give up the game. You are conceding that railroads are using revenue from captive shippers to finance capacity expansion for non-captive shippers -- i.e. non-captive shipper revenue that does not generate a sufficient rate of return on its own to finance the additional capacity necessary to carry more of it.

I happen to agree entirely that is exactly the game, and your diagnosis can be nothing but true, for so long as railroads divert their resources from productive traffic to traffic that does not generate a sufficient rate of return to finance the solutions to the congestion problems created by ... low rates and low rates of return.

The old railroad conundrum -- noncompensatory rates -- in a new dress.


Ken Strawbridge


Twice in that post I said "rate of return," not "income".

A "rate of return" has to be on ... income. A "low rate of return" means there has to be income. No income would mean no rate of return at all.

Read.
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Posted by jeaton on Thursday, June 8, 2006 12:55 AM
I suppose if you compare revenue per load "captive" vs. "noncaptive" or even profit per load, the profit per load on the captive shipments might be higher. There is, however, the matter of volume. Maybe 7000 loads a day on the Transcon? I'd think about giving the northern tier to the Montana wheat shippers and let them do whatever they want.

"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics

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Posted by MichaelSol on Thursday, June 8, 2006 12:57 AM
QUOTE: Originally posted by rrandb

Location apparently matters to those who feel others are getting a better rate because of where they are shipping to and from.

?!?
QUOTE: Since most rail shippers are " captive " the railroads should be making profits in line with the oil companies.

Interesting, the rail industry insists there are few captive shippers. I think this is an example of reaching for any wild idea simply to support a pre-conceived conclusion.

Statistically, approximately 31% of shippers are captive under Staggers Act guidelines.

You are right, if all shippers were charged those rates, the profits would be enormous.

They aren't.

Must be because of the effect of "other" rates not generating much profit, or perhaps even none, at all.

I think your math theory is right -- high rates should add up to high profits. The fact that the railroads are not making the extraordinary profits that captive shipper rates suggest, shows clearly the effect of the other equivalent mathematical operator resulting from rates charged to non-captive shippers.

Subtraction.
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Posted by MichaelSol on Thursday, June 8, 2006 1:05 AM
QUOTE: Originally posted by jeaton
I suppose if you compare revenue per load "captive" vs. "noncaptive" or even profit per load, the profit per load on the captive shipments might be higher. There is, however, the matter of volume. Maybe 7000 loads a day on the Transcon?

QUOTE: Originally posted by rrandb
Since most rail shippers are " captive " the railroads should be making profits in line with the oil companies.

The problem with discussion on this is that advocates of monopoly pricing pretty much grab any argument, consistency to the wind. Here we see two completely opposite propositions -- "most shippers captive" -- vs -- a "not enough volume" of captive shippers argument.

This is fairly typical. Conclusions precede the evidence.

And no "evidence" is actually offered in support of the proposition, rather, pseudo-evidence that proponents cannot even agree on.

This should, perhaps, suggest the underlying weakness of the argument -- that it's intrinsic merit appears to have such a profoundly weak substantive basis that even its proponents cannot agree on what that factual basis might be and offer instead completely contradictory evidence leading to the identical conclusion.

In other words, the conclusion is arrived at independent of any evidence.
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Posted by rrandb on Thursday, June 8, 2006 1:22 AM
"most shippers captive" VS "the matter of volume". Your are the only one who used the phrase "not enough volume"? You are good at changing one word and changing the whole meaning. You remind me of when I was in D.C. and delt with highly compensated political lobbiest./lawyers. You could have a futue in such a job. [2c]
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Posted by MichaelSol on Thursday, June 8, 2006 1:25 AM
Pretty heavy spinning going on there. What do you think Jay meant? That 7000 carloads was too much volume? Sounds like you learned to play the game in D.C. pretty well.
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Posted by rrandb on Thursday, June 8, 2006 5:38 AM
No but then I do not propose to put words in his mouth . However you are willing ( with quotations marks) to blantantly miss quote what he said. At 7000 loads a day on the trasncon, close to say 13 trains of 55 car unit trains a day I won't say in "quotes'" that he said its too little. What I would say since his answer is open to interpretation that only he knows excactly what he meant to say. As the spinee to the spinner I'd bet you passed your bar on the first try. [2c]
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Posted by MichaelSol on Thursday, June 8, 2006 8:29 AM
Well, if you think Jay is agreeing with you that most shippers are captive, I think you are spinning his remarks. No matter how "open to interpretation" you think they are, they are not incomprehensible.

After your declaration that I am putting words in his mouth, you thereupon proceed to put words in his mouth by saying it means 7000 carloads in 55 car trains of 13 trains per day.

Of course, "13 trains" a day does not describe the Northern Tier BNSF traffic either. Closer to 30.

However, this exhange precisely underscores my contention that these conclusions arise in "fact free zones," -- indeed "facts" are casually invented wholesale ("most shippers are captive", "13 trains a day") when they are convenient to the conclusion. Here we see facts simply made up. No basis whatsoever, completey wrong in fact. The search for a supporting theory is equally elastic.

So elastic in fact that fundamental characteristics of command and control economies are translated into a positive good and relabeled as "capitalism" when in fact they are no such thing, but the antithesis.
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Posted by MichaelSol on Thursday, June 8, 2006 9:22 AM
QUOTE: Originally posted by greyhounds
No.

No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return"

Why on earth would any sane person do that? Your statements make no sense.

Pharmaceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off.

IBM did it with PCs for years.

Venture capitalists do it for a living.

Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point.

In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them.
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Posted by jeaton on Thursday, June 8, 2006 10:24 AM
QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
No.

No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return"

Why on earth would any sane person do that? Your statements make no sense.

Pharmeceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off.

IBM did it with PCs for years.

Venture capitalists do it for a living.

Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point.

In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them.

But you are saying it is wrong if railroads invest cash generated from one segment of business into a segment that may be earning a lower rate of return?

"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics

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Posted by MichaelSol on Thursday, June 8, 2006 10:36 AM
QUOTE: Originally posted by jeaton

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
No.

No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return"

Why on earth would any sane person do that? Your statements make no sense.

Pharmeceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off.

IBM did it with PCs for years.

Venture capitalists do it for a living.

Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point.

In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them.

But you are saying it is wrong if railroads invest cash generated from one segment of business into a segment that may be earning a lower rate of return?

If it is based on coercive rate making for some, creating a subsidy for others, it distorts markets, and it distorts resource allocation. Milton Friedman would undoubtedly say it is the worst thing a company can do, as it inevitably creates unproductive or even destructive resource allocation strategies.

However, to your point, Greyhounds states it would be insane to do so and that railroads don't do that.

I happen to think it happens all the time, and generally not resulting from insanity. Good reasons and dumb reasons.

But, your point is best taken up with greyhounds. It's not just wrong, he says, it's insane. I am sure you will take him to task for it.
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Posted by greyhounds on Thursday, June 8, 2006 12:27 PM
QUOTE: Originally posted by MichaelSol



QUOTE: Originally posted by greyhounds
No.

No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return"

Why on earth would any sane person do that? Your statements make no sense.



Pharmeceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off.

IBM did it with PCs for years.

Venture capitalists do it for a living.

Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point.

In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them.


Boy, this is stupid.

QUOTE: Originally posted by MichaelSol



"Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point."


Boeing won't invest in a new plane type unless it believes that the plane will pay off investments. Every start up has negative cash flow - but that doesn't mean they won't get their investment back with interest.

What you said the railroads were doing was intentionally making investments that they knew wouldn't pay off - and that is one dumb thing for you to have said.

And Venture Capitalist do not make bad investments for a living.

And Pharmeceutical companies direct research into promissing areas - they don't all pay off, but they are not intentionally investing in business areas that they know won't pay off, which again, is just exactly what you said the railroads are doing.

And you are wrong again.

Ken Strawbridge




"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by MichaelSol on Thursday, June 8, 2006 12:47 PM
Strawbridge: "No business manager in his/her right mind would cross subsidize business and "divert their resources from productive traffic to traffic that does not generate a sufficient rate of return"".

Strawbridge: "...which is just exactly what you said the railroads are doing."

Strawbridge is finally at the point of completely contradicting himself, offering only in his own defense, "boy, this is stupid."

Couldn't agree more.
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Posted by Anonymous on Thursday, June 8, 2006 2:24 PM
Pharmaceutical companies are selling to a "captive market" protected by patent law. And they have rather large tax breaks (in various parts of the world) to do so.

Not a good example.
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Posted by n012944 on Thursday, June 8, 2006 2:36 PM
QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
Which is exactly why capcity declined and they're now playing catch up after years of government opression and government forced diversion of profitable freight to highway.

Deregulation occured 26 years ago, and railroads just "now" decided to play catch-up?

Wow. And which current events are you still blaming on the Civil War?


The capacity issues has more to do with the explosion of imported goods in the last 20 years than dereg.


Bert

An "expensive model collector"

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Posted by greyhounds on Friday, June 9, 2006 12:54 AM
QUOTE: Originally posted by MichaelSol

Strawbridge: "No business manager in his/her right mind would cross subsidize business and "divert their resources from productive traffic to traffic that does not generate a sufficient rate of return"".

Strawbridge: "...which is just exactly what you said the railroads are doing."

Strawbridge is finally at the point of completely contradicting himself, offering only in his own defense, "boy, this is stupid."

Couldn't agree more.


And just how was that "contradicting myself"?

Ken Strawbridge
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by Flint Hills Tex on Friday, June 9, 2006 7:48 AM
While the only way to really resolve the problems of captive shippers would be open access, there really doesn't seem to be any practical way to implement open access (please see the pertinent threads).

It is not command economy at work here, but rather monopoly pricing, a very capitalistic trait. I would not compare the railroads to other free enterprise operations, but rather to utilities. Take telephone service for example. Everyone in North America was at the mercy of AT&T for pricing until Ma Bell was broken up and the market opened for competition. AT&T had to submit to government regulations requiring them to open up their infrastructure (i.e. telephone lines, relais, etc.) to competitors like MTI and Sprint. Now the customer had a choice, and that forced the telephone companies to price their services competitively.

Over here in Germany, they've done the same thing with electric and gas companies. While the local power and light company maintains their power plants, high voltage lines, substations, etc. I, as a customer, can choose a cheaper offer from a competing electric company, even though the electricity flows through the competition's lines.

Theoretically, the government could require railroads to open up their rails to competition, but that would only work if Rail Traffic Control (i.e. dispatching) were in neutral hands.
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Posted by MichaelSol on Friday, June 9, 2006 8:51 AM
QUOTE: Originally posted by cogload

Pharmaceutical companies are selling to a "captive market" protected by patent law. And they have rather large tax breaks (in various parts of the world) to do so.

Not a good example.


Well, think about it first.

Just as captive shippers were protected by provisions of the Staggers Act.

Suppose the Pharmaceutical companies couldn't get courts to enforce the patent laws .... that's where the captive shippers are at.
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Posted by MichaelSol on Friday, June 9, 2006 8:58 AM
QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by MichaelSol

Strawbridge: "No business manager in his/her right mind would cross subsidize business and "divert their resources from productive traffic to traffic that does not generate a sufficient rate of return"".

Strawbridge: "...which is just exactly what you said the railroads are doing."

Strawbridge is finally at the point of completely contradicting himself, offering only in his own defense, "boy, this is stupid."

Couldn't agree more.


And just how was that "contradicting myself"?

Ken Strawbridge

Well, first you proclaim they wouldn't invest in a lower rate of return line of business, then you take the position that is exactly what I said railroads were doing. You denied they would do it, it would be insane, you said.

Then you accused me of saying what I said: they are taking high margin profits and sinking it into low margin business. And indignantly "accused" me of having said it as though I had denied it somewhere.

Or, faced of course with a plethora of examples that businesses actually do it all the time, you may have, once again, realized you didn't know what you were talking about and are now attempting to take the position that it is perfectly justified for a railroad to do that.

Hard to tell with you. Between fabrications and emotion, you're hard to pin down.
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Posted by Anonymous on Friday, June 9, 2006 9:01 AM
Varying profit margins by customer and line of business, volume discounts, and preferred customers have been a part of business ever since there was business. Saying business shouldn't or doesn't cross subsidize is like saying Toyota shouldn't use profits from it's Lexus division to pay for a new plant to produce Camrys. During incentive programs, Detroit regularly sells product at a loss, sometimes for sound business reasons.

These captive shipper discussions often fall into comparing agricultural rates with intermodal, which are really two different lines of business. There's also an implicit assumption that capital investment is going only to intermodal on the SF transcon i.e. there's no agricultural traffic on the ex-SF and no intermodal on the northern transcon?

Economists have long known that monopolies will occur as part of the normal business cycle. Breakup or regulation as public utilities are two ways to deal with that. Regulation of other business practices has also been well established as a legitimate need. It's also not uncommon for some lines of business to be regulated, while others are not. Certain segments of the banking industry are still highly regulated while others are not.

The current trend of deregulating certain industries has been a mixed bag, working well in some cases but not as well in others. In many cases the problem is with the regulators rather than the companies. I don't see Montana farmers selling wheat at lower than market prices, regarless of any social need, nor would I expect railroads not to want to charge as much as they can. Few businesses that did so would remain in business very long.

FM and some others seem to come up with some rather non free-market ideas in order to avoid blaming the regulators, perhaps because his favored party are the regulators and he's unwilling to ask 'Where's the Beef?'. Is BNSF really the villain here or is it the STB? I'd suggest that just because the regulators have done a poor job or perhaps gone too far in one direction instead of another, there's no need to scrap the system. Perfect competition and completely open markets rarely exist under any economic system and there will always be a need for regulation. Likewise there will also be debate over how much, who's paying too much, who's paying too little and so on according to the self-interest of the respective parties.
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Posted by MichaelSol on Friday, June 9, 2006 9:02 AM
QUOTE: Originally posted by n012944

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
Which is exactly why capcity declined and they're now playing catch up after years of government opression and government forced diversion of profitable freight to highway.

Deregulation occured 26 years ago, and railroads just "now" decided to play catch-up?

Wow. And which current events are you still blaming on the Civil War?


The capacity issues has more to do with the explosion of imported goods in the last 20 years than dereg.

Statistically, on a ton-mile basis railroads grew at a slightly lower rate, 1980 -2000, than they did 1960-1980.

That always seems to be a huge surprise to people, but in fact, it is suggestive that railroad policy, not traffic growth, created "capacity issues."
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Posted by Murphy Siding on Friday, June 9, 2006 9:10 AM
Michael: What I get out of your posts, here and on other threads, is that you feel the railroads are *overcharging* captive customers, so they can *subsidize* competitive business sectors?
In a round about way, this may be true, but I don't feel it's necessarily done on purpose. It's likely, that the railroads are getting away with charging captive customers more. I would feel they are keeping those prices as high as possible, but not high enough to get in trouble with the STB. The other part about *subsidizing* some business is a little fuzzier, in my mind. If there were no *captive* customers to charge at premium prices, then the railroads would have to *subsidize* every shipper?
I feel a lot of these pricing issues will start to work themselves out on their own, once capacity issues start to alter pricing. At some point(and we may be there now) railroads will be able to say shippers will pay more for intermodal, or they'll have to put it on the highway.
The captive shipper/180%/STB/blah blah blah....part is so murky, that it could be (and has been) jawed about for years, without much change.

Thanks to Chris / CopCarSS for my avatar.

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