Railroads Struggle to Deliver Coal to Utilities

[tree68]

Thanks, Chad - I will have another bag.

Now back to the show!

[chad thomas]

QUOTE: Originally posted by rrandb

Mr Sol I beleive your are swimming up stream on that one and will never see the source of the river as are we with dave. Its a lot of work and you get nowhere.[#dots]

True, but isn't it entertaining.

[rrandb]

Mr Sol I beleive your are swimming up stream on that one and will never see the source of the river as are we with dave. Its a lot of work and you get nowhere.[#dots]

[MichaelSol]

QUOTE: Originally posted by TomDiehl
Thank you Michael. We've been trying to get this through to David, male, f

I've been busy with Ken, Male, Deserted by Wife.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

Ladies and gentlemen, a manufacturing facility is simply not the same thing as a right of way. Companies do, in fact, gain advantages by opening new facilities and closing down old ones. "Buildings" are meant to be replaceable assets. Look at the depreciation schedules.

Thank you Michael. We've been trying to get this through to David, male, from the Pacific Northwest since Page 2 of this thread.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

Ladies and gentlemen, a manufacturing facility is simply not the same thing as a right of way. Companies do, in fact, gain advantages by opening new facilities and closing down old ones. "Buildings" are meant to be replaceable assets. Look at the depreciation schedules.

Hey, thanks for clearing that up.[;)] I guess you didn't read my post then?[:p]

[MichaelSol]

Ladies and gentlemen, a manufacturing facility is simply not the same thing as a right of way. Companies do, in fact, gain advantages by opening new facilities and closing down old ones. "Buildings" are meant to be replaceable assets. Look at the depreciation schedules.

[Murphy Siding]

Here's a different analogy. Georgia Pacific is a huge wholesale building materials company. They are nationwide, and could certainly be considered a *Class One* of their industry. They closed down, and sold off their facility in Lincoln, Nebrraska. It was determined that the facility was redundant, based on present and forseeable future business in the central part of the country. If you were the CEO of Georgia Pacific, could you go to the board of directors, and the stockholders and say: "Ya know-we ought to just keep this facility on the books for another 25 years. That way, if the need arrises in the future,we can fire it back up. Then we can figure out how to pay back all those *mothball*(?) expenses, and start raking in the big bucks" That is, if the market comes back,if the facility isn't outdated, and if the facility is in the right location 25 years down the road.
If you were the CEO and said this at a stockholder's meeting, do you think your name would still be on the door when you got back to the office?[;)]

[n012944]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Mookie

OK - baby steps.....

Railroads sold off a lot of "assets" - rail lines and ROW? Is that correct? And you think they should have held onto them. Still correct?

How would they do that w/o becoming over-extended in the accounting department?
Had they kept all their original acquisitions and holdings, how would they make enough $ to cover all the expenses?

Mook

Can you name any other transporation mode that engages in wholesale retrenchment of the ROW? Highways? No. Waterways? No. Airports? No.

[#wstupid]
Wow, you mean stuff that is owned and operated by the goverment is not run with the same efficiently as a corporation? Thank you for pointing that out, I would have never known.[;)]

Bert

[mudchicken]

QUOTE: Originally posted by futuremodal

Mudchicken - what was your college degree? Or did you have one?

Stick to what you know - rotten ties, rusty spikes, and weedy ballast. Leave the economics to those who have the degree.

UM...rrandb:

FM/Dave conveniently dismisses that from his diatribe because it doesn't fit and then hides behind an apparently unearned piece of paper tacked up on a wall. [V][V][V]

[Mookie]

Yo - Dave (can I call you Dave or shall we be Gonzaga and The Big Red?) - I am waiting for a reply. And trust me - my questions are a lot easier!

Mook

[rrandb]

Let me address the one railroad I can speak with some certainty about ,The FEC. When originally built in the late 1800's their main line south jogged 30 miles inland to at the time a large population area. In the 20's a cutoff or short cut was built to improve N-S transit times.Over the next 20 years it became apparent a through train was no longer needed and they removed one leg and this became a branch line. When it got to the point a one car passenger train was no longer being fully utilized they purchased a bus to replace the train. Freight lasted longer but it too was eventually replaced with the RR's own trucking service. This same story has been repeated all over America with the exception of the RR providing buses and trucks. The last branch line which is only 4.3 miles long is now up for abandonement as it is only used for storing rail cars till they are needed. They have yards for this and do not need the storage. It is not only rails that are elliminated but crossing protection, signaling, dispatching, road crews and eguipment and much more infastructure. These can be used elsewhere to earn a return on investment. A dead line does not.The RR looks at the big picture not just the parts. If the RR's do not change with the times they will be left behind.

[n012944]

QUOTE: Originally posted by futuremodal

Bert,

There is no retrenchment in the steel industry,

Thank you Dave for just showing everyone here that you have NO clue what you are talking about. Steel has been replaced in many things by plastics,an example, go tap on a late model car, then one built 30 years ago and you will see the difference. Steel has not been able to get many new products to replace stuff it lost in the 80's which means retrenchment.

Bert

[MichaelSol]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

So you're saying that in 1976, when Conrail was formed, it was done too early? There was no downturn in business and Penn Central, Erie Lackawanna, Reading, etc. were doing good hauling all that freight?

"So" I'm not saying any such thing ...

You did not refer to the Pennsylvania, New York Central, et. al. You made a general statement ... "faced by railroads."

The numbers I recite above are for Class I "railroads." The numbers speak for themselves.

Last I looked, 1976 was BEFORE the early 80's.

?

[chicagorails]

hey dont fret!! up can handle it!![:D]

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

So you're saying that in 1976, when Conrail was formed, it was done too early? There was no downturn in business and Penn Central, Erie Lackawanna, Reading, etc. were doing good hauling all that freight?

"So" I'm not saying any such thing ...

You did not refer to the Pennsylvania, New York Central, et. al. You made a general statement ... "faced by railroads."

The numbers I recite above are for Class I "railroads." The numbers speak for themselves.

Last I looked, 1976 was BEFORE the early 80's.

[MichaelSol]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

So you're saying that in 1976, when Conrail was formed, it was done too early? There was no downturn in business and Penn Central, Erie Lackawanna, Reading, etc. were doing good hauling all that freight?

"So" I'm not saying any such thing ...

You did not refer to the Pennsylvania, New York Central, et. al. You made a general statement ... "faced by railroads."

The numbers I recite above are for Class I "railroads." The numbers speak for themselves.

[TomDiehl]

QUOTE: Originally posted by Mookie

PS - another question: We went from jointed rail to ribbon rail, I think. (Of course, feel free to correct me if I am wrong which I am a lot of the time) but if you left the rails in place - wouldn't the ties rot over time and the rails need replacing with something newly invented? Not to mention all the switch heaters that they now install, new types of switches, frogs, etc? So you may have to completely tear up an in place line to replace it with all the newer more modern equipment?

This just gets more complicated.

Mook

Yes, ties do rot away and need replacement. I've done some work on the East Broad Top where we removed the old "ties" with a shovel. Replacing individual ties by hand is VERY labor intensive. On a large scale, this is best done mechanically by laying the rails aside, scraping a new roadbed, laying new ties, dropping and spiking the rails back in place, and ballasting.

Rails also can be reused. Years ago when Conrail downgraded the old DL&W Lackawanna Cutoff, they pulled out the second track and loaded the rail on a special train. I don't know how long the rail sections were, but there were a lot of modified flat cars that held the continuous rail section. It was all jointed rail, but fairly heavy. I didn't actually look for the markings but it appeared to be 130 to 155 pound range. I was told it was going to a weld plant where they removed the joint bars, cleaned up the ends and welded it into long sections of continuous welded rail (CWR) for use elsewhere.

[TomDiehl]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

And the point I'm trying to make is that these railroad downturns are NOT the result of lessened demand for rail service, rather it is the lack of decent rail service itself that lost business for the railroads. Demand for rail service is an implicit constant, even when explicit demand seemingly falls.

The point you're still missing is that the tracks have to be where the demand for transport is. Coal was a major commodity hauled by the northeast railroads up until about WW2. Demand dropped off drastically in the late 40's and 50's, the steel industry died out and the area has been refered to as the "rust belt" where these mill used to be. You're trying to say that if the Pennsylvania, New York Central, Erie Lackawanna, Reading, etc. (all components of Conrail) had offered better service, they'd still be in business? Even though their origin freight and destinations had gone out of business. Rail banking these lines STILL would not have paid off.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

So you're saying that in 1976, when Conrail was formed, it was done too early? There was no downturn in business and Penn Central, Erie Lackawanna, Reading, etc. were doing good hauling all that freight?

[Mookie]

Now I am confused. If the railroads couldn't or wouldn't meet the demand, who did? If they lost the business - who picked it up?

[Anonymous]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

And the point I'm trying to make is that these railroad downturns are NOT the result of lessened demand for rail service, rather it is the lack of decent rail service itself that lost business for the railroads. Demand for rail service is an implicit constant, even when explicit demand seemingly falls.

Demand for transportation services is more of a constant than other sectors. I have to remind some folks that rail service covers a wide array of commodities, so when you have a drop in demand for, say steel, at the same time you probably have an increase in demand for aggregates used to make concrete or aluminum to replace steel in auto parts. So even though demand for rail shipments of steel might fall, at the same time demand for shipping the alternate products increases.

Or when demand for US made autos goes down, that usually ends up with more foriegn autos being brought in, so demand for transportation of autos is still fully engaged.

Only when we have an actual drop in macro economic activity do you see a drop in demand for transportation services. Recessions have been relatively few and far between in our economy. And when rail business falls during periods of growing economic activity, that should tell you something.

Keeping this in context of the topic title, we all know demand for delivery of coal has been going up, yet because the railroads would not or could not meet this demand, they had a loss of business. It's all about rail service shortcomings, not lessened demand for rail service.

[Mookie]

PS - another question: We went from jointed rail to ribbon rail, I think. (Of course, feel free to correct me if I am wrong which I am a lot of the time) but if you left the rails in place - wouldn't the ties rot over time and the rails need replacing with something newly invented? Not to mention all the switch heaters that they now install, new types of switches, frogs, etc? So you may have to completely tear up an in place line to replace it with all the newer more modern equipment?

This just gets more complicated.

Mook

[Mookie]

Got another POV. (this is fun!) We were a railroad that a town grew up around. Actually, we were about 3-4 railroads. The city couldn't have their main thoroughfare blocked by a train every day and their neighborhoods with expensive new homes and trains running through them (years ago), so when the RI for instance, quit - the tracks were gone, too.

Even tracks from the UP were torn up and used to go right through residential areas. The city is even now, trying to move the BNSF farther west so town can expand. So I don't think it is limited strictly to railroads tearing up the tracks. The city fathersmothers are pretty persuasive in our town.

And we still have the Kyle line, which is unused but in good condition in the event......

So I have satisfied both of your arguments, haven't I?

And while we are still the great outdoors here, our population is growing. More people need more room, so trees, animals, rails and rocks have to either move or go away. So where are you going to "store" all these unused lines for future use?

Mookie

[MichaelSol]

QUOTE: Originally posted by TomDiehl
Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's ...

The problems faced by railroads in the 1970s wasn't a "downturn" in business but other factors.

The "downturn" came in the early 1980s.

U.S. Ton-Miles of Freight (Millions), Class I Railroads
1960........572,309
1970...... 764,809
1980...... 918,958
1985...... 876,984

[edblysard]

Yes, market share has remained constant…pretty amazing when you consider that most other heavy industries market share fluctuated a lot during the same 50 years, and some of those heavy industries are gone completely or outsourced overseas.
But our profits, they went up, lots.
So did freight moved, and total volumes in almost every category of commodities we handle.
In fact, last year we handled more cars in one year than ever before in industry history, even more than when all those "retrenched" lines were in place, and operating.
What David fails to point out, because it doesn’t favor his point of view, is that we don’t just walk away from any line...at the least, the ties are removed, recycled, and the rail and tie plates spikes and assorted hardware sold as scrap.

Contrary to Dave’s repeated insistence that this is a nation wide conspiracy to destroy the American way of life, (or at the least, Montana wheat farming) it takes a great deal of effort to even get permission to begin studying abandonment, much less accomplish it.
He makes it sound as if, tomorrow, BNSF might just decide to abandon a line, and tomorrow night it’s a done deal.

Read what he post very carefully, as he has a bad habit of altering key points in his arguments as the debate goes on, he has prefers a shiftable point of contention, kept just lose enough that he can change horses mid stream when needed.
For him, black and what are not black and white, but shiftable shades of gray.
Ed

[TomDiehl]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Mookie

OK - baby steps.....

Railroads sold off a lot of "assets" - rail lines and ROW? Is that correct? And you think they should have held onto them. Still correct?

How would they do that w/o becoming over-extended in the accounting department?
Had they kept all their original acquisitions and holdings, how would they make enough $ to cover all the expenses?

Mook

I would argue this: It often costs more to go through abandonment proceedings and to physically remove rails and ties, than it is to just keep it all there as is. If property taxes are that extreme (and in most cases they are not big cost drivers), just give it all to the taxing authority and let them deal with it. The likelyhood is, if the line has future merit, the local jurisdiction will keep it in a mothballed state until growth warrants a reopening of the line in question. And of course, if the line is then reopened, guess who gets the business? The original Class I owner.

Can you name any other transporation mode that engages in wholesale retrenchment of the ROW? Highways? No. Waterways? No. Airports? No. Pipelines? No. Transmission lines? No.

Nope, just the railroads. That should tell you something right there.

It does. It tells you that the railroads are the only ones of that list that own AND operate the rights-of-way. Highways, waterways, and airports aren't owned by the trucking companies, barge companies, or airlines. Pipelines and transmission lines, although considering them a right-of-way like the railroads is a bit of a stretch, haven't experienced a downturn in business like the railroads did in the 70's, so there was no reason FOR retrenchment.

[Anonymous]

Here's a quote from this following link.....

http://www.idahostatesman.com/apps/pbcs.dll/article?AID=2006606190308

....that gives us a clue into how customers have percieved railroads over the last few decades:

"The resurgence of the rails is a good story," Ortwerth said. "For 30 years, the rails have been bleeding market share away to the trucks. The No. 1 reason was service issues. The rails were so notoriously bad at customer service and on-time delivery."


That's what this topic is about, and how retrenchment has related to the negative views rail customers have had and continue to have about the US railroad industry.

Retrenchment = shrinking customer base.

Shrinking customer base = lost market share

BTW, railroad market share has not changed appreciably in the last 50 years.

[Anonymous]

Bert,

There is no retrenchment in the steel industry, or the auto industry, from a GLOBAL perspective. If there were no more steel factories in the US, if there were no more auto plants in the US, we'd still have all the steel and cars we could possibly want for our disposal.

Railroading is different. When the US railroad industry retrenches, there is no global rail services network to make up the difference. The rails physically have to be here for us to use railroading.

[Cheviot Hill]

What about railbanking the line. Seems NS and CSX have done it here and there.