futuremodal wrote: tiskilwa wrote: solzrules wrote: I hardly think that re-regulation of the railroads is going to solve anything. Regulation had a leveling effect: It helped weak carriers survive; it prevented strong carriers from getting stronger. The result was that none were prosperous.When the entire US rail system was in danger of collapsing under its own weight in the 1970's, the options were (1) make the system purely government-owned, or (2) get the government completely out.The powers that be opted for dereg, and so today we have a hand-full of carriers that are prosperous. Things turned out okay. Maybe they turned out great. There is no perfect solution. Perhaps the aggrieved shippers could ask for mitigation from the government. Wouldn't be the first time farmers asked for price support from the government. How many farmers received massive land grants? How many farmers get anti-trust exemption? How many farmers were allowed to expand via Eminent Domain?
tiskilwa wrote: solzrules wrote: I hardly think that re-regulation of the railroads is going to solve anything. Regulation had a leveling effect: It helped weak carriers survive; it prevented strong carriers from getting stronger. The result was that none were prosperous.When the entire US rail system was in danger of collapsing under its own weight in the 1970's, the options were (1) make the system purely government-owned, or (2) get the government completely out.The powers that be opted for dereg, and so today we have a hand-full of carriers that are prosperous. Things turned out okay. Maybe they turned out great. There is no perfect solution. Perhaps the aggrieved shippers could ask for mitigation from the government. Wouldn't be the first time farmers asked for price support from the government.
solzrules wrote: I hardly think that re-regulation of the railroads is going to solve anything.
I hardly think that re-regulation of the railroads is going to solve anything.
How many farmers received massive land grants? How many farmers get anti-trust exemption? How many farmers were allowed to expand via Eminent Domain?
Seems to me that many settlers of our western states did indeed receive massive land grants from the Federal and in some cases (California) state land grants to settle and cultivate vast lands. How would all the large cattle ranches have started were it not for government opening up the west?!? And then there are the more modern price supports and out right grants which had their roots in FDR's New Deal. How many railroads have a free government provided extension service to provide assistance in running their business and providing free tax subsidized research to improve their yields and thus revenues? How may railroads receive special tax breaks on their property? How many railroads receive relief from a whole panoply of laws designed to protect workers including safety regulation (when was the last time you saw a farm tractor with working tail lights or even a license plate??), even exemption from child labor laws???
Your argument is, as usual, a loser FM....
LOL...
LC
MichaelSol wrote: Odd that railroads were the primary advocates of regulation according Gabriel Kolko, primarily because competition was forcing them to reduce rates to unsupportable levels. What happened? Regulation stopped a free-fall in rates. Railroads advocated deregulation because they thought it would allow them to raise rates. What happened? A free-fall in rates. Hmmm. What saved the railroads? The entirely unrelated ability to lay off or fire employees as a result of crew agreements first negotiated as a result of a bankruptcy proceeding at Milwaukee Road. What did that have to do with rates? Nothing. The ability to freely set rates hurt railroads, the ability to fire employees helped railroads. Regulation affected rates, other factors affected crew laws. The Staggers Act had no effect on crew laws.
Odd that railroads were the primary advocates of regulation according Gabriel Kolko, primarily because competition was forcing them to reduce rates to unsupportable levels. What happened?
Regulation stopped a free-fall in rates.
Railroads advocated deregulation because they thought it would allow them to raise rates. What happened?
A free-fall in rates.
Hmmm.
What saved the railroads?
The entirely unrelated ability to lay off or fire employees as a result of crew agreements first negotiated as a result of a bankruptcy proceeding at Milwaukee Road.
What did that have to do with rates?
Nothing.
The ability to freely set rates hurt railroads, the ability to fire employees helped railroads. Regulation affected rates, other factors affected crew laws. The Staggers Act had no effect on crew laws.
But today RR's like the BNSF are able to charge what the market will bear. This doesn't mean that they are charging cost plus overhead plus profit, but rather they are charging the most they can and still retain the business. That is an ideal position to be in REGARDLESS of what business you are in. That's how companies make real money. What is even more interesting is that RR's charge these prices and yet people are still clamoring for the service of the RR. RR's are also able to recoup costs resulting from fluctuations in the fuel market - something that they just ate before 1981.
In other words I think market pricing has only been good for the rail industry, even though there have been some painful decades of abandonment. Today, for the most part, if a Class 1 rail line exists it is because it is a profitable venture. It isn't being propped up by artificial rates or the political considerations. There are very few RR's in the rest of the world that can claim this.
As for crew laws and the ability to hire and fire, don't you think that is a result of collective bargaining changes over the last 20 years? I don't know that the RR's survived because they were able to hire and fire people with more ease. I think it is because they are making money and people are willing to invest in them.
Market theory proposes that monopoly or captive pricing creates "great harm." It is the fundamental tenet of Capitalism and, incidentally and oddly enough, of the Staggers Act. Who was/is right?
Market theory proposes that monopoly or captive pricing creates "great harm." It is the fundamental tenet of Capitalism and, incidentally and oddly enough, of the Staggers Act.
Who was/is right?
To mention one, the Oklahoma Land Rush of 1889.
http://www.library.cornell.edu/Reps/DOCS/landrush.htm
solzrules wrote: I don't know what everyone is all fired up about. The article mentions how railroads have benefited from the Staggers Act and de-regulation in 1981. Yes, some people may not like the market based pricing they are paying, but an open and free market is essential to our economy and our way of life. Introducing competition (DME) is a good way to maintain a healthy industry that regulates itself. It is kind of hard for a monopolistic railroad to charge exorbitant prices if another railroad can still make a profit with lower rates. Perhaps captive shippers should consider location if they don't want to be served by only one railroad. I hardly think that re-regulation of the railroads is going to solve anything. We have one of the greatest rail systems in the world, in large part because it is a private system that HAS to be competitive to survive. A heavily regulated semi-public system is prone to failure and mis-management. Why go back to the dark ages?
I don't know what everyone is all fired up about. The article mentions how railroads have benefited from the Staggers Act and de-regulation in 1981. Yes, some people may not like the market based pricing they are paying, but an open and free market is essential to our economy and our way of life. Introducing competition (DME) is a good way to maintain a healthy industry that regulates itself. It is kind of hard for a monopolistic railroad to charge exorbitant prices if another railroad can still make a profit with lower rates. Perhaps captive shippers should consider location if they don't want to be served by only one railroad.
I hardly think that re-regulation of the railroads is going to solve anything. We have one of the greatest rail systems in the world, in large part because it is a private system that HAS to be competitive to survive. A heavily regulated semi-public system is prone to failure and mis-management. Why go back to the dark ages?
You're right. Why go back to the dark ages when we have the option of moving forward to the light? Separate infrastructure from transporter operations, classify the infrastructure portion for what it is - aka, a de facto utility - and govern it like we do all such utilities, then let the transporters run free relative to their multimodal brethern aka trucks, barges, etc.
The status quo will not remain, so it's one way or the other. Take your pick.
greyhounds wrote: Unless it is done well, any government involvement in setting railroad freight rates will cause great harm.
Unless it is done well, any government involvement in setting railroad freight rates will cause great harm.
The ability to freely set rates hurt railroads, the ability to fire employees helped railroads. Regulation affected rates, other factors affected crew laws. The Staggers Act had no effect on crew agreements.
Unless it is done well, any government involvement in setting railroad freight rates will cause great harm. Harm such as the almost total diversion of perishable traffic to highway movement and the similar diversion of LTL/LCL traffic. Then we got the collapse of the Penn Central, etc.
The problem is, there is no way to do it well.
The government can't figure out what a price should, or shouldn't, be. Read this GAO report:
http://www.gao.gov/new.items/d06898t.pdf#search=%22%20%22GAO-06-898T%20%22%22
They don't know how to do this. They can't possibly know. There is no way to know.
Well, I suppose I can see your piont.
However, farmers do have options. When my uncle harvests soybeans every year in Minnesota, he hires trucks to drive the beans to the elevator offering the best price - sometimes it is by BNSF, sometimes DME, sometimes the Minnestoa Prairie RR (I think that's the name). They aren't always the same distance away from the farm. The BNSF elevator may have the best price but be an hour further away than DME. Or vice versa. You don't have to move the field to enjoy market pricing, but you do have to do some research. If the elevators were to locate in an area where two lines are close enough to build spurs, then they could enjoy a more competitive rate. Obviously not all elevators can do that, so what do you propose the solution is? Re-regulation? Price controls?
I would imagine that it would be similar for a coal mine, although here I know less. If there are three RR's competing for business, wouldn't the competition force transportation costs lower?
The point is, certain captive shippers are not captive because they are shippers. They are captive because of what they produce. They are not a glass manufacturer, a Toyota plant, or a steel mill. The coal mine can't be moved to a more favorable shipping location. The wheat field cannot be moved to where BN and UP compete.
solzrules wrote: What is a "wheat ranch"? Never heard of that one, and my family has been farming for decades.
What is a "wheat ranch"?
Never heard of that one, and my family has been farming for decades.
For those who raise cattle, it is a perjorative. For those who raise wheat, it is a sarcasm.
solzrules wrote: Perhaps captive shippers should consider location if they don't want to be served by only one railroad.
Perhaps captive shippers should consider location if they don't want to be served by only one railroad.
And where would those wheat ranches and coal mines move to?
kenneo wrote: Dave ............ when someone authors a piece for publication, there are space criteria that must be met (the piece must not be too short or too long) and also the publisher will require the author to stay on subject. Captive shippers and differential pricing were not part of the subject. As long as the article is accurate, it does not matter what the author's feelings or beliefs are. And since this was an opinion piece, accuracy is not relevent. Opinion is.
Dave ............ when someone authors a piece for publication, there are space criteria that must be met (the piece must not be too short or too long) and also the publisher will require the author to stay on subject.
Captive shippers and differential pricing were not part of the subject.
As long as the article is accurate, it does not matter what the author's feelings or beliefs are.
And since this was an opinion piece, accuracy is not relevent. Opinion is.
Short and sweet answer:
Writing a synopsis on the battle to reregulate railroads (or stave off that eventuality) without even mentioning captive shipper abuses/differential pricing is like writing a synopsis on the cause of the Civil War without mentioning slavery.
futuremodal wrote: tree68 wrote: futuremodal wrote: <snip> If Vaninetti had at least mentioned such things as captive shippers, differential rates, loss of rail service to rural customers, contractual shortfalls of promised coal deliveries, et al, maybe one could contend with the allegation that this article is pure tripe. He didn't, so it is. Let's face it, Dave. It could be an article about the demise of the caboose, but if it doesn't mention captive shippers, it isn't worth reading... No, it's an opinion piece meant to counter the growing movement to reregulate the railroads, an unfortunate but predictable response to the inherent abuses of partially deregulated natural monopolies. As such, it would have served Vaninetti's purpose manyfold if he had actually addressed the captive shipper and differential pricing issues and then provided his counterarguments. Oh, he'd still be a hack, but at least a credible hack. But since there are no valid counterarguments to those issues, perhaps he was better off with the fictional view he displayed. And if you can provide any referential tie-ins to cabooses and captive shippers, let's here it. Otherwise, it's just another wasted fish and bicycles comparison.
tree68 wrote: futuremodal wrote: <snip> If Vaninetti had at least mentioned such things as captive shippers, differential rates, loss of rail service to rural customers, contractual shortfalls of promised coal deliveries, et al, maybe one could contend with the allegation that this article is pure tripe. He didn't, so it is. Let's face it, Dave. It could be an article about the demise of the caboose, but if it doesn't mention captive shippers, it isn't worth reading...
futuremodal wrote: <snip> If Vaninetti had at least mentioned such things as captive shippers, differential rates, loss of rail service to rural customers, contractual shortfalls of promised coal deliveries, et al, maybe one could contend with the allegation that this article is pure tripe. He didn't, so it is.
<snip>
If Vaninetti had at least mentioned such things as captive shippers, differential rates, loss of rail service to rural customers, contractual shortfalls of promised coal deliveries, et al, maybe one could contend with the allegation that this article is pure tripe. He didn't, so it is.
Let's face it, Dave. It could be an article about the demise of the caboose, but if it doesn't mention captive shippers, it isn't worth reading...
No, it's an opinion piece meant to counter the growing movement to reregulate the railroads, an unfortunate but predictable response to the inherent abuses of partially deregulated natural monopolies. As such, it would have served Vaninetti's purpose manyfold if he had actually addressed the captive shipper and differential pricing issues and then provided his counterarguments.
Oh, he'd still be a hack, but at least a credible hack.
But since there are no valid counterarguments to those issues, perhaps he was better off with the fictional view he displayed.
And if you can provide any referential tie-ins to cabooses and captive shippers, let's here it. Otherwise, it's just another wasted fish and bicycles comparison.
Instead of an"incredible hack" like you FM?! FOFLMAO...
futuremodal wrote: And if you can provide any referential tie-ins to cabooses and captive shippers, let's here it. Otherwise, it's just another wasted fish and bicycles comparison.
Exactly.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Thanks to Chris / CopCarSS for my avatar.
Is that like being a self employed independent “energy consultant” such as yourself?
A mouth for hire/will testify for cash thing?
Just though I would ask a “expert” about it…
futuremodal wrote: it was a guest editorial from a known Class I rail consultant. Here's the link to the story that someone conviently left out to make it seem to be a JS perspective.... As you can see, the writer is a self described "management consultant and a transportation and coal industry expert".
it was a guest editorial from a known Class I rail consultant. Here's the link to the story that someone conviently left out to make it seem to be a JS perspective....
As you can see, the writer is a self described "management consultant and a transportation and coal industry expert".
23 17 46 11
Well, here's your first clue -
"The hearings were largely one-sided affairs in which opponents to market-based rail services were provided a platform to advance their pro-regulation, special-interest agendas."
Market-based rail services?!?! Are you kidding us?
First of all, those stating their case at the aforementioned hearing are most likely captive shippers, and as we all know captive shippers are not afforded market-based rail services.
Funny, the hack writer makes no mention of captive shippers. None at all. This fact discredits his whole flawed premise, because it is the captive shippers who are pushing for greater federal oversight of monopolistic rates.
Funny, the hack writer makes no mention of differential pricing. Rather, he seems hell bent on blurring any such distinction by making it appear rates are even across the board.
There's more dishonesty in this piece. Productivity increases are a result of technology, not of the so-called deregulation. The loss of branchline services means the carload portion of rates have not disappeared but have transfered to the highways. Truck rates tend to be higher than carload rates, so there hasn't been any overall rate reductions in the supply chain for those who are complaining.
But wait. There's more outright lying in this hack piece. "Some of these utilities recently found themselves in a bind when the railroads couldn't jump through hoops for them in a capacity-constrained marketplace." Since when is meeting contractual obligations akin to "jumping through hoops"? The railroads contracted for certain guarantees of coal deliveries, and when their collective incompetence brought forth the predictable shortfalls, they blamed it on an Act of God. No mention of the contractual shortfalls in the hack piece.
Nothing is more fairly distributed than common sense: no one thinks he needs more of it than he already has.
Limitedclear wrote: futuremodal wrote: solzrules wrote: Wow. That was a very sensible article. That was in the Journal-Sentinal? Double wow. Actually, it was a guest editorial from a known Class I rail consultant. Here's the link to the story that someone conviently left out to make it seem to be a JS perspective.... http://www.jsonline.com/story/index.aspx?id=510991&format=print As you can see, the writer is a self described "management consultant and a transportation and coal industry expert". You'll be interested to note he is also currently employed by the Mayo forces in opposition to the DM&E expansion project http://postbulletin.typepad.com/soapbox/files/dme_report_5_8_06_final.pdf Vaninetti's opinion follows in lock step with that of the AAR, which is everything is just fine the way it is with captive domestic shippers and differential pricing. Don't go and do something radical like actually introducing intramodal competition into the mix! The stats he uses in the JS story seem to be lifted directly from the AAR's website, and are not an independent analysis of the rail-shipper interaction. Any guesses on the how and why he ended up with a JS opinion piece? The fact that he (as a de facto Class I consultant) is also an opponent of the DM&E project seems to confirm the suspicions that BNSF and UP are heavily involved with the Mayo opposition forces. The article posted was an editorial, not an independent analysis, it even says so, a fact that you confirm. I'd like to see the DM&E succeed and it wouldn't surprise me if other railroads with interests are forwarding their own interests, however, nothing in this article mentions the DM&E, nor is there any direct argument concerning such an alternative. Shippers are picking the railroads pockets with the reregulation stupidity. The competition represented by DM&E doesn't change that, if anything the FRA and STB support of the DM&E loan only points out that the existing system works, regardless of the views of the AAR or individual members of that organization. LC
futuremodal wrote: solzrules wrote: Wow. That was a very sensible article. That was in the Journal-Sentinal? Double wow. Actually, it was a guest editorial from a known Class I rail consultant. Here's the link to the story that someone conviently left out to make it seem to be a JS perspective.... http://www.jsonline.com/story/index.aspx?id=510991&format=print As you can see, the writer is a self described "management consultant and a transportation and coal industry expert". You'll be interested to note he is also currently employed by the Mayo forces in opposition to the DM&E expansion project http://postbulletin.typepad.com/soapbox/files/dme_report_5_8_06_final.pdf Vaninetti's opinion follows in lock step with that of the AAR, which is everything is just fine the way it is with captive domestic shippers and differential pricing. Don't go and do something radical like actually introducing intramodal competition into the mix! The stats he uses in the JS story seem to be lifted directly from the AAR's website, and are not an independent analysis of the rail-shipper interaction. Any guesses on the how and why he ended up with a JS opinion piece? The fact that he (as a de facto Class I consultant) is also an opponent of the DM&E project seems to confirm the suspicions that BNSF and UP are heavily involved with the Mayo opposition forces.
solzrules wrote: Wow. That was a very sensible article. That was in the Journal-Sentinal? Double wow.
Wow. That was a very sensible article. That was in the Journal-Sentinal?
Double wow.
Actually, it was a guest editorial from a known Class I rail consultant. Here's the link to the story that someone conviently left out to make it seem to be a JS perspective....
http://www.jsonline.com/story/index.aspx?id=510991&format=print
As you can see, the writer is a self described "management consultant and a transportation and coal industry expert". You'll be interested to note he is also currently employed by the Mayo forces in opposition to the DM&E expansion project
http://postbulletin.typepad.com/soapbox/files/dme_report_5_8_06_final.pdf
Vaninetti's opinion follows in lock step with that of the AAR, which is everything is just fine the way it is with captive domestic shippers and differential pricing. Don't go and do something radical like actually introducing intramodal competition into the mix! The stats he uses in the JS story seem to be lifted directly from the AAR's website, and are not an independent analysis of the rail-shipper interaction.
Any guesses on the how and why he ended up with a JS opinion piece?
The fact that he (as a de facto Class I consultant) is also an opponent of the DM&E project seems to confirm the suspicions that BNSF and UP are heavily involved with the Mayo opposition forces.
The article posted was an editorial, not an independent analysis, it even says so, a fact that you confirm. I'd like to see the DM&E succeed and it wouldn't surprise me if other railroads with interests are forwarding their own interests, however, nothing in this article mentions the DM&E, nor is there any direct argument concerning such an alternative. Shippers are picking the railroads pockets with the reregulation stupidity. The competition represented by DM&E doesn't change that, if anything the FRA and STB support of the DM&E loan only points out that the existing system works, regardless of the views of the AAR or individual members of that organization.
I'm just amazed the Urinal Sentinal (oops, must be a typo) printed anything that I agree with on their editorial page!
I don't know that I see any references to the DME in this article, but the point about the BNSF and the UP having a vested interest in preventing the project from going forward is a good one. AntiGates was the first one to postulate it, and I guess after considering it I am sure that there is some intensive lobbying going on behind the scenes to keep the loan application from going through. Certainly they would want to prevent another competitor from entering the scene and screwing up the status quo. Other than that, I don't think the author said anything different from what Trains magazine has been saying for a while now. Excess rail capacity is history, and railroads are now stuck with squeezing every ounce of efficiency out of their existing infrastructure without have to invest mega dollars in new track. Where the profit and ROI are there for the taking, some RR's like the BNSF have seen fit to add track. I don't know that WI has seen the benefits of this upswing in rail traffic - maybe someone has more to add in that arena, but right now it seems like a good time to be in the rail business.
futuremodal wrote: Vaninetti's opinion follows in lock step with that of the AAR, which is everything is just fine the way it is with captive domestic shippers and differential pricing. Don't go and do something radical like actually introducing intramodal competition into the mix! The stats he uses in the JS story seem to be lifted directly from the AAR's website, and are not an independent analysis of the rail-shipper interaction. Any guesses on the how and why he ended up with a JS opinion piece? The fact that he (as a de facto Class I consultant) is also an opponent of the DM&E project seems to confirm the suspicions that BNSF and UP are heavily involved with the Mayo opposition forces.
But Dave---
What did Mr. Vaninetti say that you disagree with? In inflation adjusted dollar terms (which are the only terms that are realistic), rail rates fell dramatically. Just like the author pointed out.
If I was in charge of a railroad, and all my customers were just tickled pink with their prices, I'd have a long talk with the pricing managers.
As to introducing more intramodal competition, why? The fact that the rates went down as they did indicates there is already a good level of competition.
As to the BNSF and UP not welcoming the DM&E into the Powder River coal fields, they're not stupid and this isn't a game.
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
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