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

[TomDiehl]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by rrandb

All I'm saying is if Idaho had wanted the truck/barge traffic there IDOT was that hard to work with. If they did roadblock the border it was not for the benift of BNSF. Idaho had asked for 120,000. A reason is at that weight 120,000 we did 8 mph uphill and 4 mph downhill. Granted it was winter and there was 5" of ice and cinders on the road. The point is the damage to the road at those weights is not that much different. Did the Feds do that maybe to help BNSF. I do not think so but it would fit the DC/railroad colusion theory.

It is a generally accepted fact that the rail industry had a major hand in convincing the federal government to cap each state's GVW limits for non-Interstate highways, with each state able to grandfather in their particular weight limit that was in place when the cap was enacted. The Interstate Highway cap has been 80,000 lbs since I can remember.

Most of the grain that was trucked from Montana to Lewiston went via non-Interstate Highways - US Highway 12, Montana Highway 200, etc.

"Generally accepted fact?" Where, on the conspiricy theory websites? The truck lobby is a lot stronger than the railroad lobby.

So is there one central website for all the conspiricy theorys or do you have to search out a separate site for each one?

[Anonymous]

QUOTE: Originally posted by rrandb

All I'm saying is if Idaho had wanted the truck/barge traffic there IDOT was that hard to work with. If they did roadblock the border it was not for the benift of BNSF. Idaho had asked for 120,000. A reason is at that weight 120,000 we did 8 mph uphill and 4 mph downhill. Granted it was winter and there was 5" of ice and cinders on the road. The point is the damage to the road at those weights is not that much different. Did the Feds do that maybe to help BNSF. I do not think so but it would fit the DC/railroad colusion theory.

It is a generally accepted fact that the rail industry had a major hand in convincing the federal government to cap each state's GVW limits for non-Interstate highways, with each state able to grandfather in their particular weight limit that was in place when the cap was enacted. The Interstate Highway cap has been 80,000 lbs since I can remember.

Most of the grain that was trucked from Montana to Lewiston went via non-Interstate Highways - US Highway 12, Montana Highway 200, etc.

[MichaelSol]

QUOTE: Originally posted by greyhounds
The rates went way down with respect to inflation ...

Anyone who looks at the chart will see that the "inflation adjusted rate" went up. It's the red line. It's clearly marked. It goes up.

The actual rate is also higher. The RCAF rate is also higher in 2004 than in 1981.

You have simply fabricated what you say the chart says.

Now, I don't rely on that chart for anything, it's your "exhibit" but you are plainly trying to say the exact opposite of what the chart actually says.

[Anonymous]

QUOTE: Originally posted by MP173

I knew the Microsoft reference would set folks off!

That is about as close to captive customer base as one can find. Yet their revenue to asset ratio is not that high.
ed

I wasn't thinking of Microsoft, but past antitrust actions in the computer industry do raise some potential problems for Open Access.

A number of years ago as a result of an antitrust case, IBM was ordered to un-bundle large mainframe computer hardware and software in order to promote competition in that market segment. The end result was a few independent hardware vendors accounting for minimal market share, and increased revenue for IBM due to higher overall pricing. IBM dominates that market today.

In part because of that, when IBM invented the PC it was released as an open architecture platform. Clones were allowed and anyone could and still can write software for it, including operating systems. That didn't stop Microsoft from dominating and a large part of their defense in the antitrust cases has been that the platform is open and competitors are free to enter the market.

Both show what could potentially happen if Open Access is imposed and no one comes to run the trains.

[greyhounds]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by greyhounds
The rail rates on Montana wheat did not, in any way "escalate" as you falsely say. If someone will look at the facts in the "white paper" prepared for the Govenor of Montana they will see that: Take a look at the facts on page 14 and disregard the propaganda.

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

The rates went way down with respect to inflation and stayed basically constant with regards to the BNSF's cost.

There is something wrong with you. Seriously, seriously wrong. Page 14 clearly shows that the "inflation adjusted" transportation rate, by the standard you went to great lengths to convince us was appropriate, went from 70 cents to $1.40 per bushel, 1981 -2005.

Hint: the inflation rate for a customer -- dollars he pays -- is different than the cost adjusted rate of cost to supply for the producer. You still don't understand inflation indexes.

Just making a record of this untill I get a chance to respond.

[rrandb]

All I'm saying is if Idaho had wanted the truck/barge traffic there IDOT was that hard to work with. If they did roadblock the border it was not for the benift of BNSF. Idaho had asked for 120,000. A reason is at that weight 120,000 we did 8 mph uphill and 4 mph downhill. Granted it was winter and there was 5" of ice and cinders on the road. The point is the damage to the road at those weights is not that much different. Did the Feds do that maybe to help BNSF. I do not think so but it would fit the DC/railroad colusion theory.

[MichaelSol]

QUOTE: Originally posted by rrandb
You must have shown up on one of thse days when they needed to extract some overweight fees. Not hard to do at an entrance without permenant scales.

But, the traffic disappeared permanently.

[MichaelSol]

QUOTE: Originally posted by greyhounds
The rail rates on Montana wheat did not, in any way "escalate" as you falsely say. If someone will look at the facts in the "white paper" prepared for the Govenor of Montana they will see that: Take a look at the facts on page 14 and disregard the propaganda.

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

The rates went way down with respect to inflation and stayed basically constant with regards to the BNSF's cost.

There is something wrong with you. Seriously, seriously wrong. Page 14 clearly shows that the "inflation adjusted" transportation rate, by the standard you went to great lengths to convince us was appropriate, went from 70 cents to $1.40 per bushel, 1981 -2005.

Hint: the inflation rate for a customer -- dollars he pays -- is different than the cost adjusted rate of cost to supply for the producer. You still don't understand inflation indexes.

[MichaelSol]

QUOTE: Originally posted by rrandb
P.S. Nov 1988 to May 1989 Coldest winter in 27 years they said.

There was virtually no truck grain traffic to Lewiston from Montana by then.

[greyhounds]

QUOTE: Originally posted by 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.

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?

It's critical to "see" for yourself, but you can not limit yourself to that. If you do, you'll have absolutely no context for what you "see". That "B" just one of your problems.

I made it a practice to get out on "My" railraod. I worked in intemodal market development and pricing (By The Way, what did you do at the Milwaukee?) I rode "the head end" from Council Bluffs to New Orleans, and I got some operating changes made because of it. I never was hesitant to "Raise Some Hell" with the folks on the 29th floor at 233 N. Michigan Ave. in Chicago. (That was the "Operating Department")

The rail rates on Montana wheat did not, in any way "escalate" as you falsely say. If someone will look at the facts in the "white paper" prepared for the Govenor of Montana they will see that: Take a look at the facts on page 14 and disregard the propaganda.

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

The rates went way down with respect to inflation and stayed basically constant with regards to the BNSF's cost.

The BNSF was reducing its rates in real dollar terms. That's why they gained market share. What do you want them to do? Give money away?

The fact that you can't remember what road you were on speaks volumes.

Ken Strawbridge

[rrandb]

QUOTE: Originally posted by 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.

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?

You must have shown up on one of thse days when they needed to extract some overweight fees. Not hard to do at an entrance without permenant scales. Thats where the overweight trucks go in. It's called dodgeing the scales. P.S. Nov 1988 to May 1989 Coldest winter in 27 years they said.

[MichaelSol]

Odd that the truck traffic that was briefly export didn't use the interstates. Probably because of where the Port of Lewiston is relative to Montana. If I am "unfamiliar" with anything, it is not that the truck traffic disappeared to Lewiston. Unless of course you maintain they were disguised.

[MichaelSol]

QUOTE: Originally posted by greyhounds
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.

Of course, the lie here is that you know the haul is different, and you won't admit that. Of course, anyone in the industry would know that, but you prey on ignorance, just as you tried to do with the Gateway conditions.

[rrandb]

Really, Boise to Courdelane has an interstate? The majority of their roads are not intersate's. Who said we were on an interstate? Even weigh stations on interstaes are manned by state workers. The entrance to state borders out west are called "Ports Of Entry" Most of them are not on intersate hyways and most of them are manned by good ole boys who do a good job of doing whats right. If the boss said "Let um roll" then roll they will. PS We were working a state contract. You act like you are unfamiluar with the concept of "Looking the other way" Is that not what DC has done in the case of "captive" shippers? [?]

[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?

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

[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]

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.

[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

[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.

[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.

[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.

[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 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.

[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).

[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

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.

[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.