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

[MichaelSol]

QUOTE: Originally posted by MP173

So, the STBprogram is based on system averages?

That is a bit antiquated for determining costs for specific movements. If I were a pricing manager, my decisions would be based on specific data for each customer. That, of course involves very propriatary information, which i would be extremely reluctant to share.

Steel wheels, steel rails, standardized equipment, standardized pay scales, fuel costs don't vary much across a system, nothing very proprietary, and nothing that can change too much. A typical example where the cost of obtaining the specific data would probably exceed, in most instances, the usefulness of the data since it will look very much like old data with the logical changes in wage scales and fuel costs. Cycle times will swing the "cost" around more than anything, but the nice thing about the STB program is, of course, that's pretty easy to know and enter as a particular data.

Proprietary information, if there is any, make sense if there were competitors, but .... these are captive shippers. That's the whole point.

The competitors already know how your railroad is doing as a whole -- it's all published. But, too, it is the system the railroads themselves agreed to, knowing full well that plenty of slack was built into the statutory threshold. You, as a railroad manager, may want to know more -- you may not want to disclose that to the customer -- the cost may be less than the calculated cost of service -- it is an average, after all.

STB updates the data each year, and what is surprising is how difficult it is to change actual data. Averages tend to be hard to move, up or down. On the other hand, the 180% threshold offers the railroads the opportunity to come forward to explain a higher cost of service than the average. Too, you can look at "reasonableness" and comparing a Shelby to Portland movement, through Pasco, compared to a Nebraska or South Dakota movement to Duluth through Lincoln or Northtown would show the Pasco yard moves faster.

A brief review tonight single car to shuttle, moves from Nebraska and South Dakota origins to Duluth at R/VC ratios of between 127% and 174% with one at 217%, average haul about 550 miles. Stations were chosen with Shuttle elevators only. Shelby wheat to Portland, 781 miles, varies between 172% and 338% with the single car moving at 172% of VC, and a shuttle carload moving at 338% of VC.

[jeaton]

The whole idea of limiting a rate to a percentage of variable cost falls on its face because it does not provide any consideration of the effect of the volume of business on the return on the investment in the portion of the fixed plant used for the move.

The general principals taught in Econ 101 on the private enterprise capitalistic system became irrelevant to transportation in the US on the first day that governments-at any level-started to build and pay for the facilities used for transportation. With that any chance that there would be a free and open market to efficiently allocate capital resources used for transportation facilities went in the tank.

The "captive shipper" concept is real only if you firmly believe that the only possible competition for one railroad is another railroad, or, according to Futuremodal, at least two and possibly more. If you buy that, call me because I have a two for one deal going on some bridges in New York City.

According to Michael Sol, railroads are using some measure like whatever flips your switch to allocate capital. Some 30 years ago, I work for a railroad where a couple of guys with educations from The Wharton School and the Harvard Business School worked up the internal ROI's on the proposed capital projects, considered the odds that the projects would produce those returns, and then ranked the projects to provide senior management with a rational story to take to the board of directors. I have been away for a long time. Has that method become obselete?

As I stated earlier on this thread, if the proposals for the increased regulation of railroads are enacted, one of two things will happen.

Having discovered that operating near capacity provides a certain pricing power, the railroads individually decide that there is no point in going ofter the other guys business by cutting rates.

OR,

The proponents of the changes are sucessful in their goal of getting lower rates. Cosequently, the railroads' cash flow is reduced, capacity expansion slows or stops, and there is a further deterioration of service. From what I have seen looking at the CURE membership and the businesses offering the most support for the changes, they seem to be mostly businesses that own or lease railcars, rather than use carrier supplied cars. So if service becomes worse, they wind up having to buy or lease more cars. Along with that they suffer other consequences of service getting worse.

Be careful what you wish for.

[MichaelSol]

QUOTE: Originally posted by jeaton

The whole idea of limiting a rate to a percentage of variable cost falls on its face because it does not provide any consideration of the effect of the volume of business on the return on the investment in the portion of the fixed plant used for the move.

The original proposal called for a 160% R/VC. Railroads were actually able to articulate an argument that it should be higher, based on that consideration. Railroads got their way on the percentage. Congress meets in regular session. There is no reason why, when a change is warranted, a change cannot be made.

QUOTE: According to Michael Sol, railroads are using some measure like whatever flips your switch to allocate capital. Some 30 years ago, I work for a railroad where a couple of guys with educations from The Wharton School and the Harvard Business School worked up the internal ROI's on the proposed capital projects, considered the odds that the projects would produce those returns, and then ranked the projects to provide senior management with a rational story to take to the board of directors. I have been away for a long time. Has that method become obselete?

Apparently the system didn't work too well. Thirty years ago, the railroads were in enormous trouble. The Staggers Act came after the efforts you describe.

The method you describe of ascribing probabilities also requires rational information and theory in the course of assigning those probabilities. The process is memorialized in modern software programs such as Decison Tree or Crystal Ball. The problem is when the odds don't work out ... for some reason railroads miss those a lot. I am sure the same process underlay the industry support for Staggers. Then Railroads did not expect the substantial decline in industry revenue as a result of Staggers; they expected it to go the other way.

Oops.

QUOTE:
As I stated earlier on this thread, if the proposals for the increased regulation of railroads are enacted ...

I think most captive shippers would simply like to see the original law enforced.

[greyhounds]

QUOTE: Originally posted by jeaton

The whole idea of limiting a rate to a percentage of variable cost falls on its face because it does not provide any consideration of the effect of the volume of business on the return on the investment in the portion of the fixed plant used for the move.

The general principals taught in Econ 101 on the private enterprise capitalistic system became irrelevant to transportation in the US on the first day that governments-at any level-started to build and pay for the facilities used for transportation. With that any chance that there would be a free and open market to efficiently allocate capital resources used for transportation facilities went in the tank.

The "captive shipper" concept is real only if you firmly believe that the only possible competition for one railroad is another railroad, or, according to Futuremodal, at least two and possibly more. If you buy that, call me because I have a two for one deal going on some bridges in New York City.

According to Michael Sol, railroads are using some measure like whatever flips your switch to allocate capital. Some 30 years ago, I work for a railroad where a couple of guys with educations from The Wharton School and the Harvard Business School worked up the internal ROI's on the proposed capital projects, considered the odds that the projects would produce those returns, and then ranked the projects to provide senior management with a rational story to take to the board of directors. I have been away for a long time. Has that method become obselete?

As I stated earlier on this thread, if the proposals for the increased regulation of railroads are enacted, one of two things will happen.

Having discovered that operating near capacity provides a certain pricing power, the railroads individually decide that there is no point in going ofter the other guys business by cutting rates.

OR,

The proponents of the changes are sucessful in their goal of getting lower rates. Cosequently, the railroads' cash flow is reduced, capacity expansion slows or stops, and there is a further deterioration of service. From what I have seen looking at the CURE membership and the businesses offering the most support for the changes, they seem to be mostly businesses that own or lease railcars, rather than use carrier supplied cars. So if service becomes worse, they wind up having to buy or lease more cars. Along with that they suffer other consequences of service getting worse.

Be careful what you wish for.

Hey Jay, all Hell broke loose at work this afternoon or I would have been there.

I agree that Sol "assumes irrational behavior" and that "The whole idea of limiting a rate to a percentage of variable cost falls on its face " But I've got another reason.

If a railroad is priced at 180% of variable and wants to make more money it can basically do one of two things: 1) raise the rate, or 2) lower its costs. Obviously, the second option is better for all concerned. More efficient railroads are a good thing.

But if it's rates are capped at some artificial revenue/cost ratio by economic regulation, why would it bother to become more efficient. Any gain would be lost - the regulators would force the railroad to give it to the shippers. There would be no return on buying more efficient locomotives, improving equipment utilization, improving maintenance procedures, etc. Capping rates at some artificial ratio would be an incentive for inefficient railroads, and the last thing this economy needs is an inefficient railroad network.

If you look at the "White Paper" prepared by Whiteside & Associates for the Governor of Montana, you'll see that this is just what the BNSF did. (see page 14) It made itself more efficient while holding the rates down.

http://rscc.mt.gov/docs/White_Paper_Meeting_10_05.pdf

They made themselves more efficient and now the shippers in Montana want the railroad's efficiencies to go into their own pockets instead of the BNSF's. And those shippers are looking to the government regulators to force the BNSF to fork it over.

[jeaton]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by jeaton

The whole idea of limiting a rate to a percentage of variable cost falls on its face because it does not provide any consideration of the effect of the volume of business on the return on the investment in the portion of the fixed plant used for the move.

The original proposal called for a 160% R/VC. Railroads were actually able to articulate an argument that it should be higher, based on that consideration. Railroads got their way on the percentage. Congress meets in regular session. There is no reason why, when a change is warranted, a change cannot be made.

QUOTE: According to Michael Sol, railroads are using some measure like whatever flips your switch to allocate capital. Some 30 years ago, I work for a railroad where a couple of guys with educations from The Wharton School and the Harvard Business School worked up the internal ROI's on the proposed capital projects, considered the odds that the projects would produce those returns, and then ranked the projects to provide senior management with a rational story to take to the board of directors. I have been away for a long time. Has that method become obselete?

Apparently the system didn't work too well. Thirty years ago, the railroads were in enormous trouble. The Staggers Act came after the efforts you describe.

The method you describe of ascribing probabilities also requires rational information and theory in the course of assigning those probabilities. The process is memorialized in modern software programs such as Decison Tree or Crystal Ball. The problem is when the odds don't work out ... for some reason railroads miss those a lot. I am sure the same process underlay the industry support for Staggers. Then Railroads did not expect the substantial decline in industry revenue as a result of Staggers; they expected it to go the other way.

Oops.

QUOTE:
As I stated earlier on this thread, if the proposals for the increased regulation of railroads are enacted ...

I think most captive shippers would simply like to see the original law enforced.

What I am suggesting is that R/VC is not relevant to a determining that the revenue is adequate for a particular operation because it does not consider the volume of business. Is it one car or a thousand cars? How many other cars at other rates use that piece of the railroad?

Compared to a number of other railroads, the Illinois Central did survive through the 1970's rather well. Maybe we just had smarter people doing the risk analysis.


Change the law or enforce the original law, either way it is a change from the current situation. So if they get the changes they wish for, they get the lower rates and result number two prevails. Are the lower rates worth anything if the wheat gets to the port but misses the boat?

[greyhounds]

You know, a lot of the "captive shipper" BS out here comes from Sol's contention that Montana wheat farmers are "captive" to the BNSF.

They're not.

According to the Montana Wheat and Barley Commitee, truck movement is a viable alternative.

http://wbc.agr.mt.gov/factsfigs/other/mwbtr.html

(That's a state of Montana web site)

In 1980, the year before deregulation (or so Sol says) 39% of the Montana wheat crop moved out by truck. That ain't no railroad monopoly.
So there is a truck alternative. No need for government involvement here!

But then an ironic thing happend as rail rates were deregulated and the Millwaukee Road through Montana was ripped out of the ground like the cancer it was. The truck share of wheat shippments from Montana began to decline, down to 20% in 1989, 16% in 2001 and only 9% in 2002.

The Sol called "Monopoly" known as the BN/BNSF began to gain market share. Oh, that's strange. According to Sol, they're charging exhorbitant, monopolistic rates while gaining market share in face of a viable alternative, trucking. Remember, 2 out of 5 wheat tons moved by truck in 1980. Unless Montana ripped up its roads, trucking is still an alternative.

What happened was that the BNSF became more efficient, reduced its rates in real dollar terms, and made itself more competitive with the viable truck alternative. Why else whould the wheat have shifted from truck to rail?

But since the Montana wheat farmers are desperate, they seek to loot the BNSF through government regulation.

The Montana wheat shippers are in no way "captive" to the BNSF. The roads to the Snake River barges are still in place. The shippers just want a lower price, and they don't care how much damage they do if they get one.

[bobwilcox]

QUOTE: Originally posted by MP173

So, the STBprogram is based on system averages?

That is a bit antiquated for determining costs for specific movements. If I were a pricing manager, my decisions would be based on specific data for each customer. That, of course involves very propriatary information, which i would be extremely reluctant to share.

ed

That is one of the reasons no one running a Class I railroad uses this junk. Current railroad costing systems use very specific data on each move. The user can decide to agregrate the data as appropriate to the piece of traffic under review.

Having used this data their are wide variances in the cost. As an example their is a hudge difference if you are using a branch line with four cars on the typical train vs. a main line with 100 cars on the typical train.

STB costs are part of the strange and wonderful world of lawyers. As the attorney said to his client, "Be careful of which hole you go down Alice!"

[MichaelSol]

Greyhounds and Montana wheat. Never ends.

In 1980, a good percentage of wheat did leave Montana by truck, to the Lewiston barge terminal. There was a pretty good rate there. A relatively short truck movement over a two lane road through a wilderness.

After the trucks tore up the highway, Idaho put a weight limit that killed the traffic. I haven't seen a truck go that way in years. Of course, Greyhounds never saw one at all, so how could he possibly know what happened to it. Hence 97% goes by rail and, in 1984, the ICC did, in fact, find "market dominance" of the BN in Montana under the Staggers Act guidelines. Now, that was an agency finding after detailed testimony by both sides and due consideration by knowledgeable professionals -- not the greyhounds approved method of simply making it up so that he can argue about something he was never involved in.

The Whiteside paper shows there were some efficiency gains. I am not, and never have, argued the Whiteside position on this. I am presenting the Staggers Act argument which incorporates higher costs, lower costs, however the ball bounces. The "straw man" of the Whiteside paragraph that mentions efficiency gains is greyhhound's way of changing the subject, although I think the net result of the Whiteside paragraph is only that lower costs show up in the formula and must be acknowledged by law. Well, that's exactly what the R/VC threshold does. Nothing magical about that, nor mendacious.

Readers might recall greyhounds first brought this up in a discussion as to whether competitive rate-making of the Milwaukee Road had caused lower or higher rates back during that era. Greyhounds triumphantly announced this paper and misinterpeted a variety of conclusions from it, and failed to disclose that none of the data was from the Milwaukee Road era -- then conveniently left out a link so no one could read it for themselves. A completely dishonest argument from start to finish.

As to BobWilcox, for better or for worse, the STB methodology is the legal methodology mandated by Congress. As I also mentioned, it can incorporate current specific data. As I also mentioned, you can "know" some things, such as my choice of a station on a mainline, through a fairly efficient yard to destination, and compare that to the system average. The methodology allows you to use as much as you know about the movement and uses system averages for what you don't know. Fair enough.

That is a reasonable approach to any system analysis. The problem with it is that you are working hard to be unreasonable.

[MichaelSol]

QUOTE: Originally posted by jeaton
Compared to a number of other railroads, the Illinois Central did survive through the 1970's rather well. Maybe we just had smarter people doing the risk analysis.

Well, rewriting history is becoming a pastime here. "Rather well?" The Chairman of the ICC called it a "basket case" in Senate Testimony in January, 1978. It took more federal money than Milwaukee Road to keep it working.

[jeaton]

So it took the miracle drugs provided by the Fed's to keep it going? When I went to buy their services in 1984, they did a reasonably good job and they were still kicking when the CN came around.

By the way, if the captive shippers get the lower rates that they want, how do they propose that the railroads maintain or improve capacity and service with lower cash flows? Is the next step telling the railroads where they must put their money or telling them to raise their rates on other traffic to make up the difference? Or both?

By the way, interesting strategy on the part of the State of Montana with regard to banning the use of the highway by grain trucks. "We are to cheap or to poor to do our part for the transportation infrastructure, but we can divert attention to that by putting the blame for the problems on the privately owned and operated transportation companies.

[MichaelSol]

QUOTE: Originally posted by jeaton
By the way, interesting strategy on the part of the State of Montana with regard to banning the use of the highway by grain trucks.

?

This is my point about rewriting things ...

[jeaton]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by jeaton
By the way, interesting strategy on the part of the State of Montana with regard to banning the use of the highway by grain trucks.

?

This is my point about rewriting things ...

Excuse me. I see it was a weight limit thing. Same result. Trucks don't move the grain.

[MichaelSol]

QUOTE: Originally posted by greyhounds
If a railroad is priced at 180% of variable and wants to make more money it can basically do one of two things: 1) raise the rate, or 2) lower its costs. Obviously, the second option is better for all concerned. More efficient railroads are a good thing.

If lowering costs is a good thing then a price cap is the way to do it, according to this. According to the results of the Staggers Act, competition was the way to do it -- as costs came tumbling down, not by choice, but by the rigorous action of market forces which forced railroads to act fast to cut their costs. While the AAR loves to spin that as an almost benevolent choice on the part of the railroads to generously pass along "savings," I don't know of a serious economist that would believe that spin for a second -- railroads were forced to by competition and did so to survive in the relatively ruthless post-Staggers world.

What would have attenuated efficiency gains? Lack of competition.

So, if there is a substantial cash flow of captive money, does it make sense that this attenuates the need to obtain efficiencies? To me it makes sense that it does -- it is a straightfoward economic market theory argument that requires no name calling nor evasive factual presentations to understand.

But, too, the railroad is not priced at 180% as the poster misleadingly states above. Rather, that is a legally-defined cost threshold at which presumptions change. It is not, and never was, a "rate cap." That completely misunderstands, misrepresents the Staggers Act captive shipper provision.

[MP173]

The IC struggled in the 70's, but they survived....and survived quite well. In fact, they pretty much became the model for medium density operations.

Their line will never be a traffic powerhouse, most traffic moves east west in this economy, but IC (CN) seems to do it fairly efficiently.

Regarding the 70's....it was a dark time, no doubt.

ed

[MichaelSol]

QUOTE: Originally posted by jeaton
What I am suggesting is that R/VC is not relevant to a determining that the revenue is adequate for a particular operation because it does not consider the volume of business. Is it one car or a thousand cars? How many other cars at other rates use that piece of the railroad?

This tells me you are unfamiliar with the program. You do indeed select for volume, and it does indeed make a difference.

How many other cars at other rates use that portion of the railroad? Well, wouldn't that be the question to ask the current "stand alone" standard? Odd to me that BobWilcox and others wouldn't put that into their analysis? No one mentioned it. I think this underscores my contention a few pages ago that a goodly share of arguments on this issue are simply made-up, whole cloth, and are even contradictory in many cases. Do you think an analysis of the whole railroad goes into the making of each rate? Each time? Or competitive effects compared to costs of a move, which are derived in turn from standardized data, just as the STB approach does? The 180% threshold takes this into account, and this seems to be the irrationality of its perception -- the 180% is of whatever the variable cost is. If the cost is higher, doesn't matter, the railroad still recovers that cost entirely and still gets a 180% free ride on revenue before the presumption changes.

[MichaelSol]

QUOTE: Originally posted by MP173

The IC struggled in the 70's, but they survived....and survived quite well. In fact, they pretty much became the model for medium density operations.

Well, this to me is that kind of "artful" changing of the subject. There is a habit on these forums, and I don't know if its unique to railroad/fan people or not, but the idea of historical predestination or even an odder theory of postdestination -- that if something did well in the 80s, or 90s, or [pick an era], that really means that it also did well in [70s, 60s, 30s, 1880s, pick an era].

The original contention was "Compared to a number of other railroads, the Illinois Central did survive through the 1970's rather well."

Not the 80s, the 70s. However, the official pronouncement was that It was one of four specific railroads officially designated to the US Senate as a "basket case" in the 70s, 1978 to be exact. It got a ton of federal money to help it out.

[MP173]

Nope, you misread...I am not a historical, nor a hysterical, revisionist. The 70's were dark times. The IC survived. Barely, but they did. (Now, does that make it better?).

In the 80's, they became the model as they shed unproductive branches (including the one I grew up on), rationalized their mainline (double track to single CTC) and focused on becoming a scheduled railroad.

I would like to see a modern history of IC written, I doubt if it will, as it does not have the economic nor the fan base for such a history.

So, dont confuse me with a flag waving college football sweater wearing fan, dressed in my favorite railroad colors...I like trains, but not to that extent.

ed

[MichaelSol]

QUOTE: Originally posted by MP173

Nope, you misread...I am not a historical, nor a hysterical, revisionist. The 70's were dark times. The IC survived. Barely, but they did. (Now, does that make it better?).

Well ....

Tom Murray has a book on the Illinois Central coming out in December, and if its as good as his Milwaukee Road book, should be a good one. A good thorough study of its colonization efforts by Paul Gates is one of the best of its kind, but it's not modern. (1934).

[beaulieu]

QUOTE: Originally posted by jeaton

By the way, interesting strategy on the part of the State of Montana with regard to banning the use of the highway by grain trucks. "We are to cheap or to poor to do our part for the transportation infrastructure, but we can divert attention to that by putting the blame for the problems on the privately owned and operated transportation companies.

It was Idaho, not Montana that wanted the trucks off their highways. Idaho gained nothing but had to maintain the highway.

One question I do have about the Montana position paper. If cars are removed from the shuttle trains and made available for single or small block movements
will that only result in spreading the pain around a little wider? It won't help in getting the overall Montana crop to terminal elevators.

[MP173]

The same Tom Murray that writes the column? If so, it should be pretty good. I enjoy his columns and his website.

Just ordered The Men Who Loved Trains. Should be a good one, based on the chapter in Trains this month.

ed

[beaulieu]

QUOTE: Originally posted by MichaelSol
[

A brief review tonight single car to shuttle, moves from Nebraska and South Dakota origins to Duluth at R/VC ratios of between 127% and 174% with one at 217%, average haul about 550 miles. Stations were chosen with Shuttle elevators only. Shelby wheat to Portland, 781 miles, varies between 172% and 338% with the single car moving at 172% of VC, and a shuttle carload moving at 338% of VC.

And inspite of this Grain movements through the ports of Duluth and Superior are just half of what they were from the end of WW2 through the '80s. In fact Grain now ranks below Misc. Cargo in the rankings at about 5 percent of the ports volume. They handled 2.8 million tons of Grain for 2005 a tiny fraction above the 5 year average. If the rates were any higher to Duluth-Superior it would dry up completely. BNSF has a lot of spare capacity on the high line west of Brookston, MN all the way to Minot, ND.

[Anonymous]

QUOTE: Originally posted by greyhounds

http://wbc.agr.mt.gov/factsfigs/other/mwbtr.html


In 1980, the year before deregulation (or so Sol says) 39% of the Montana wheat crop moved out by truck. That ain't no railroad monopoly.
So there is a truck alternative. No need for government involvement here!

But then an ironic thing happend as rail rates were deregulated and the Millwaukee Road through Montana was ripped out of the ground like the cancer it was. The truck share of wheat shippments from Montana began to decline, down to 20% in 1989, 16% in 2001 and only 9% in 2002.

>Why else whould the wheat have shifted from truck to rail?

It must be nice to think that you can solve all the world's problems by being very selective in your presentation of variables. However, the linear trend is simply a reflection of what happened, it does not explain why it happened. In your little world, it was all due to BN/BNSF being benevolent with it's rates, because apparently everything else that affects grain shipments was static.

Tell us, when did grain exports really take off? Could it have something to do with free trade agreements? Ken thinks trade has always been a constant.

Did increased grain shipments have anything to do with increased world demand? Again, Ken thinks world grain demand is also a constant.

Why did truck shipments fall off in the early 1980's? Could it have something to do with the sudden increase in diesel fuel prices back then? Nah, fuel prices don't affect long haul/short haul truck/barge and truck/rail combinations, do they?

Does the website explain if the truck shipments were long haul or short haul? truck to barge or truck to rail? In Ken's fantasy world, all such truck shipments were to the barge terminal in Lewiston, a relative long haul. There were no truck shipments to rail terminals, because apparently the combines offloaded directly into railcars![;)]

(BTW, at one time UP subsidized grain trucks from Montana into Kooskia Idaho for offload into UP hoppers there via the Camas Prairie Railroad. UP gave up about the time barges came into favor and branchlines went out of favor.)

What about rail service offerings over this period of time? My recollection was that elevators in Motanan had a hard time getting BN to deliver rail cars for grain shipments, thus forcing a lot of grain traffic onto the mode of last resort during the 1980's. BN did finally get their act together (as reflected in an increased market share) but then begain to raise rates for carload traffic - yes, it took BN/BNSF a decade or more to even realize they were in the monopoly position.

The HUGE SALIENT POINT BEING MISSED BY GREYHOUNDS - BNSF has consitently owned on average 80-90% of market share for grain shipments out of Montana, effectively making BNSF a monopoly in Montana and the state's grain shippers captives to BNSF. Heck, even Microsoft only owned about 75% of the software market, yet were still classified as a monopoly.

You don't have to own 100% of market share to be a monopoly for practical purposes.

The truck/barge combo gets at most 20%, and most of that is due to the fallback action from not getting rail service when it is asked for by grain shippers (read: the mode of last resort). Occassionally, there will be a deadheading dry van, empty ISO container, or flatbed with side bolsters heading west to Lewiston that will stop and pick up grain for some marginal revenue. Sometimes there are small loads of identity protected grains that will be trucked to Lewiston in an ISO container. Most of that has occured with the closure of BNSF's Shelby intermodal terminal, leaving Billings as the only BNSF intermodal terminal. Butte has the Port of Montana intermodal terminal which UP uses, but that must head to Portland and Seattle via a circuituous routing (which counteracts the rail efficiency dominance).

Only an addled miscreant would call that "competition". Like I said before, such folks would call Dobie Gillis "competition" for Lance Armstrong.

[Anonymous]

QUOTE: Originally posted by beaulieu

It was Idaho, not Montana that wanted the trucks off their highways. Idaho gained nothing but had to maintain the highway.

Actually, it was the federal ban in increasing GVW that has kept the Idaho GVW level at 105,000 and Montana's at 129,000. Those weights that were already in place when the ban took effect were grandfathered in. Idaho has tried to get exemptions since then to match the Montana GVW for US Highway 12 but without success.

Idaho gains more from grain moving by truck to the Port of Lewiston than it does having grain pass through the State via BNSF. They colllect a good portion of their statewide trucking fees at the weigh station along Highway 12/95 east of town. There is also the value added component that results in increase tax revenues into the State treasury from the economic impact of the Port. Thus, Idaho has an economic stake in trying to shift Montana export grain traffic from rail to truck. Of course, that's only because no rail connection exists between Lewiston and Montana, e.g. if such a rail connection existed and resulted in grain trains offloading at Lewiston, Idaho would get the value added benefit but not the truck fee income.

[greyhounds]

QUOTE: Originally posted by MichaelSol

Greyhounds and Montana wheat. Never ends.

In 1980, a good percentage of wheat did leave Montana by truck, to the Lewiston barge terminal. There was a pretty good rate there. A relatively short truck movement over a two lane road through a wilderness.

After the trucks tore up the highway, Idaho put a weight limit that killed the traffic. I haven't seen a truck go that way in years. Of course, Greyhounds never saw one at all, so how could he possibly know what happened to it. Hence 97% goes by rail and, in 1984, the ICC did, in fact, find "market dominance" of the BN in Montana under the Staggers Act guidelines. Now, that was an agency finding after detailed testimony by both sides and due consideration by knowledgeable professionals -- not the greyhounds approved method of simply making it up so that he can argue about something he was never involved in.

Once again, I find Mr. Sol's statements to be factually inacurate. It's never stopped him before. Heck Fire! He maintained that the Milwaukee Road was in recievership because it had too much business.

His fairytale of one beat up two lane road aciting as the sole motor freight conduit of grain from Montana to the Snake/Columbia River barge system is silly. Idaho has one of the highest truck gross weight limits in the US, 105,500 pounds. "Normal" is 80,000. And there just ain't "one road" from Montana to the river port at Lewiston, Idaho. And Idaho is not about to put a knife in the neck of its own port.

Of course if he would cite specifics, which he won't, about which road, what year, and what the weight limits were, and they are are - I might be willing to listen. But ice will freeze in Hell before he can show that the Port of Lewiston has had its business "Killed" by an Idaho highway wieght limit. He just made that up.

Anyway, in the year 2001 trucks made off with one of six bushels (16%) of Montana Wheat.

And that ain't no rail "monopoly".

Again, here's your source to verify what I say. You may ask, "where is Sol's source", but you will ask in vain. I'm citing the Government of the State of Montana.

http://wbc.agr.mt.gov/factsfigs/other/mwbtr.html

Montana farmers can, have, and certainly do, truck their grain to barges on the Columbia/Snake River system. That means the BNSF in no way has a "monopoly" on their business. Check the numbers for yourself.

And for your own sake, don't believe Sol's total BS about one two lane road through the "wilderness" being the only route out of Montana to the commercially naviagable river.

And for my own sake, post your comments about what his "political agenda" is. I think he's still PO'd that the BN made it and the Milwaukee didn't. And he's out to "get" the BNSF as an irrational result. What do you all think?

And as to his continuing assertion that the Interastate Commerce Commission, which no longer exists, found one rate out of Montana to be "unreasonable", he omits on very important point, that decision was overturned and the rate stood as valid.


Ken Strawbridge

[MichaelSol]

Being accused of making anything up, by someone who makes nearly everything up, including his intense interest in Montana agriculture, is almost a compliment from a master.

Including his ability to read a map.

Is there anything he knows anything about, instead of these ongoing diatribes where he is shown factually wrong, thread after thread?

There is, and always has been, truck grain traffic to Spokane and other inland destinations. There are some other minor movements. Trucks are preferred for local delivery, domestic use, feed, and even seed. However, many of the buyers have gone out of business over the years. The transition to export sales has been gradual but steady, but almost always rail dependent. As local buyers have gone out of business, truck traffic has diminished. But, that had nothing to do with rates, it had to do with buyers. What a novel concept to Strawbridge -- markets!!

There was never export truck traffic to Seattle, Tacoma, Kalama or Portland. There was briefly heavy truck traffic to Lewiston. It's a long trip except by the Highway 12 route; and that is a poor route. I have not seen that traffic in years and years, notwithstanding the increase in rail rates. I saw the load limit signs go up. Perhaps it was just enforcement but the road is constant curvature, there was a high accident rate, and the road was being demolished.

With the exception of that brief surge in the late 1970s, early 80s -- and I am sure Strawbridge will now recall my comments on a grain car shortage, which of course he didn't know anything about either -- truck traffic by and large has not been export grain. He has discovered a total grain transportation chart. The export grain figures are different because, oddly enough, they have to go through a port. Montana doesn't have a seaport. Strangely, Ken Strawbridge doesn't know that either.

We have heretofore always expressly stated we are talking export grain, we have always mentioned Portland, Seattle, or Tacoma destinations. Does Strawbfidge really believe there is truck competition to those ports? Of course not. He would be an idiot if he did. But, that's not his point. Once again, Strawbridge tries to slither into a different statistic, regarding a different market, to mislead people about the original conversation. Dishonest? As always. Does the Port of Seattle really include the entire Pacific Northwest as he dishonestly attempted to claim at one point? Of course not. He intentionally changed the subject, and pretended one was the other. He does that now.

What does he know about any of it except his internet searches -- zero.

Absolutely zero.

[rrandb]

I havw driven doubles in the winter in idaho and I not talking about a piar of 28' pups. The IDOT won't stop you for being at 120,000 lbs. I was hauling concrete barricades and we were so heavy the old boy didn't even want me to pull over his scales "Mite break'um" was all he said. He asked if we had a permit. We said "Nope, they would not give us one" They said you'd weigh us and give us one. He said"Not on my scale." We asked "What can we do" He said "Well you can't park here so you better just go on" Every time we went through there. There are exceptions for every rule. If Idaho is making money on trucks and barges they will let them roll. Remember it was the feds that denined the increased weight limit not the state. How strict are they going to enforce it.

[rrandb]

I havw driven doubles in the winter in idaho and I not talking about a piar of 28' pups. The IDOT won't stop you for being at 120,000 lbs. I was hauling concrete barricades and we were so heavy the old boy didn't even want me to pull over his scales "Mite break'um" was all he said. He asked if we had a permit. We said "Nope, they would not give us one" They said you'd weigh us and give us one. He said"Not on my scale." We asked "What can we do" He said "Well you can't park here so you better just go on" Every time we went through there. There are exceptions for every rule. If Idaho is making money on trucks and barges they will let them roll. Remember it was the feds that denined the increased weight limit not the state. How strict are they going to enforce it.

[MichaelSol]

You haven't driven, then, the Lochsa highway. It's not an Interstate.

[greyhounds]

QUOTE: Originally posted by MichaelSol

Being accused of making anything up, by someone who makes nearly everything up, including his intense interest in Montana agriculture, is almost a compliment from a master.

Including his ability to read a map.

Is there anything he knows anything about, instead of these ongoing diatribes where he is shown factually wrong, thread after thread?

There is, and always has been, truck grain traffic to Spokane and other inland destinations. There are some other minor movements. Many of the users have gone out of business over the years. The transition to export sales has been gradual but steady, but almost always rail dependent. As local buyers have gone out of business, truck traffic has diminished. But, that had nothing to do with rates, it had to do with buyers. There was never export truck traffic to Seattle, Tacoma, Kalama or Portland. There was briefly heavy truck traffic to Lewiston.It's a long trip except by a the Highway 12 route; and that is a poor route. I have not seen that traffic in years and years, notwithstanding the increase in rail rates. I saw the load limit signs go up. Perhaps it was just enforcement but the road is constant curvature, there was a high accident rate, and the road was being demolished.

With the exception of that brief surge in the late 1970s, truck traffic by and large has not been export grain. The export grain figures are different because, oddly enough, they have to go through a port. Strangely, Ken Strawbridge doesn't know that either.

We have heretofore always expressly stated we are talking export grain, we have always mentioned Portland, Seattle, or Tacoma destinations. Once again, Strawbridge tries to slither into a different statistic, regarding a different product, to mislead people about the original conversation. Dishonest? As always. What does he know about any of it except his internet searches -- zero.

Absolutely zero.

But Sol, again I ask. What weight limit on what road? You just don't say.

And I think you don't say because you made it up. Of course if you'd provide specifics that could be verified, it would be different. But you don't, so it ain't.

And again, there's more than one road to the river.

Trucking continues to be a viable alternative for movement of grain from Montana. So the shippers are not "captive" to the railroad in any sense. They just want the railroad to fork over its productivity gains to them - seems to be a bit greedy on their part to me.

Ken Strawbridge

[MichaelSol]

You were never there. My "experience" which is actual, is also 25 years ago. I remember the signs going up. I don't remember the numbers on the signs, but I do remember being told the load limit had been dropped, and I remember the Idaho Highway Patrol cars. I remember "portable" scales being set up, which was unheard of. Idaho also enacted one the top ten highest truck taxes in the nation. Something to do with it? Possibly.

What did you see? What did you actually see, and what do you actually know?

And why did the truck traffic drop to nothing, even as rail rates escalated?