JSGreen wrote: bobwilcox wrote:Shippers are forcing "open access" as they seek ways to reduce their logistics costs. Virtually all of my shippers served by one railroad took action to gain access to another railroad or used the threat of gaining access ...So, any idea how they are "forcing" open access?Was it by connecting an industrial area to another railroad, or were they able to somehow coerce the railroad to allow another road to service an otherwise "captive" spur? Were some seeking legislative help...and how did it come out?Is there something they did that a shipper in the plains states, who may be as much as 150 or more miles from a competitors rails, might be able to use?
bobwilcox wrote:Shippers are forcing "open access" as they seek ways to reduce their logistics costs. Virtually all of my shippers served by one railroad took action to gain access to another railroad or used the threat of gaining access ...
Datafever wrote:What are the goals of open access? The answer that I have heard is to remove the disparity caused by differential pricing. Are there other goals? Possibly, but I can't think of any that aren't related.
it's true the infrastructure company won't do any acual train running, that's the whole point behind OA.
greyhounds wrote: futuremodal wrote: Every so-called transportation economist (Gallamore, Bitzen, et al) purporting to have an "unbiased" analysis of the effects of open access on the US rail system should be forced to use this cutting edge tool in all their railroad studies. . Emphasis added by me. I find it hard to believe FM actually said this. I don't find it impossible to believe he said this, but it's so totalitarian and it so flies in the face of thought that it's hard to believe that anyone raised in an open society such as the US of A would say that some academics should be forced to think in any specific way. Zeta Tech is basically Randy Reesor. I went to grad school with Randy. He's a decent guy and he knows his stuff. But he's not the Alpha and Omega of thought. And he doesn't have the credentials or experience of Bob Gallamore. For FM to say that Gallamore should be forced to think in terms that Zeta Tech (Reesor) lays down is an insane travisty. As is "Open Access".
futuremodal wrote: Every so-called transportation economist (Gallamore, Bitzen, et al) purporting to have an "unbiased" analysis of the effects of open access on the US rail system should be forced to use this cutting edge tool in all their railroad studies. .
Every so-called transportation economist (Gallamore, Bitzen, et al) purporting to have an "unbiased" analysis of the effects of open access on the US rail system should be forced to use this cutting edge tool in all their railroad studies. .
Emphasis added by me.
I find it hard to believe FM actually said this. I don't find it impossible to believe he said this, but it's so totalitarian and it so flies in the face of thought that it's hard to believe that anyone raised in an open society such as the US of A would say that some academics should be forced to think in any specific way.
Zeta Tech is basically Randy Reesor. I went to grad school with Randy. He's a decent guy and he knows his stuff. But he's not the Alpha and Omega of thought. And he doesn't have the credentials or experience of Bob Gallamore.
For FM to say that Gallamore should be forced to think in terms that Zeta Tech (Reesor) lays down is an insane travisty. As is "Open Access".
Nice try at spin, Poindexter. "Forced to use" as I said and stand by, is not even close to being the same as "forced to think" which you have subsequently attributed to me. Like I've said before, once the antagonists of industrial evolution start spinning and throwing out such dracocian Big Brother spectors, they have all but admitted that they have lost the argument.
If an academic recieves federal money for his/her work, or is submitting research opinion as fodder for influencing public policy, said academics should be responsible enough not to omit reference works which are major variables in the subsequent discussion. When they do, they should be forced to return any taxpayer funds used to support their research, and should be subsequently disqualified from making public policy suggestions.
It is a major flaw in all these rail studies that support the continuation of the anachronistic transportation system known as the "integrated railroad", that they leave out any discussion of track use cost analysis. Applying something like the TrackShare program to an analysis of the presumed "efficiencies" of monopoly rail markets would probably blow away their hypothesis, especially when you consider the revenue potential to track owners of multiple users vs one user (even for a constant quantity of freight).
futuremodal wrote:[ Bad conclusion, Ken. There is nothing implicit about a second rail carrier "increasing costs" to serve the plant. There would be a shift of revenues from the one rail carrier to the new rail carrier, assuming they both use the same trackage. Loss of revenue does not equate to increasing costs. What might happen with rail on rail competition is a shift in the plant's production to products more prone to rail carriage if they are now afforded more reasonable rates and rail service offerings. Another faulty premise. Who says the plant or a 3rd party contractor can't handle the switching for both carriers? All the Class I's have to do is leave the inbounds and take out the outbounds. You know, like Ed's railroad. .
Bad conclusion, Ken. There is nothing implicit about a second rail carrier "increasing costs" to serve the plant. There would be a shift of revenues from the one rail carrier to the new rail carrier, assuming they both use the same trackage. Loss of revenue does not equate to increasing costs.
What might happen with rail on rail competition is a shift in the plant's production to products more prone to rail carriage if they are now afforded more reasonable rates and rail service offerings.
Another faulty premise. Who says the plant or a 3rd party contractor can't handle the switching for both carriers? All the Class I's have to do is leave the inbounds and take out the outbounds. You know, like Ed's railroad.
.
Yes, the second rail carrier will increase cost. At a minimum you'll be using two crews to do what one crew does very well now. And you'll double the train frequency needed to handle the same traffic.
And yes, you could put a "3rd Party contractor" in there to do the switching. But then you'd have three crews doing the work now done by one crew. Open access will increase the cost of providing rail service. There is no doubt about it.
That's why railroads are "Natural Monopolies". Now try to understand that that doesn't mean that there is no competition - there is. But that competition comes from trucks, barges, etc. Not from putting multiple railroads in service on a line.
Datafever: I learned a lot from all the discussion of open access. For better or worse, here is my take on the subject: Open access is really just a way for some shippers to lower their shipping costs, by forcing their railroad connection to lower their profits on the shipments. Most of the complaints from the shippers come off like little kids, whining "it's not fair", because someone else got a bigger piece of pie. I always respond to my kids, when they say that, that life isn't fair. The railroads, on the other hand, charge what they charge, simply because they can. They are in it to make a profit, and their stockholders wouldn't have it any other way. To seperate the railroads from the infrastructure is social engineering, redistributing the wealth, and punishing the railroads for making a profit. These 3 goals seems almost "Anti-American". Especially, when you admit that the only group that can raise the funds to buy out the infrastructure would be Uncle Sam-a prospect that I doubt would ever get through Congress.
Are some suppliers getting jabbed? Probably. Are some railroads making some big bucks off certain shippers? Certainly. Is open access the cure-all for this? No. It almost appears that pushing for the most extreme*fix* (open access) is thought to be a way to bring the railroads to some sort agreement to lower *some* rates. I doubt it. At this point, it would seem that the most likely improvement would come from the threat of re-regulation of some type, forcing the railroads to play by the rules of the already existing rate laws.
( You may fire when you ready Mr. futuremodal)
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding wrote:To seperate the railroads from the infrastructure is social engineering, redistributing the wealth, and punishing the railroads for making a profit.
To seperate the railroads from the infrastructure is social engineering, redistributing the wealth, and punishing the railroads for making a profit.
Datafever wrote:I would more or less agree with your statement, but I would also like to clarify something - separation of infrastructure from operations is only one of many open access proposals that have been put forth. In most proposals, this is not an issue at all.
Hmmm......I've never really heard of an open access scenario that doesn't involve seperation. Tell me more, please.
Murphy Siding wrote: Datafever wrote:I would more or less agree with your statement, but I would also like to clarify something - separation of infrastructure from operations is only one of many open access proposals that have been put forth. In most proposals, this is not an issue at all. Hmmm......I've never really heard of an open access scenario that doesn't involve seperation. Tell me more, please.
Datafever wrote: Murphy Siding wrote: Datafever wrote:I would more or less agree with your statement, but I would also like to clarify something - separation of infrastructure from operations is only one of many open access proposals that have been put forth. In most proposals, this is not an issue at all. Hmmm......I've never really heard of an open access scenario that doesn't involve seperation. Tell me more, please. Why does that not surprise me? Ah, well...Are you familiar with how interchange works? I don't. But I do know that it is a mechanism by which freight that originates with one railroad ends up being shipped over another railroad. A shipper connected to railroad A can ship product to a receiver connected to railroad B. Railroads A and B (and any connecting railroads) must have a mechanism in place that would allow this to happen. One proposal (as I see it) kind of expands on this. It would allow the shipper to negotiate a shipping price with railroad B (instead of railroad A which it is directly connected to). Railroad B pays railroad A for switching fees and standard interchange. But this increases competition because now the shipper can negotiate with either railroad in order to achieve the best possible rate.
I must not be following this correctly. Suppose a Montana wheat shipper doesn't like the rates that BNSF is offering. He could then get a *better* rate from UP? Only problem is, UP has to pay BNSF for use of the track(?) I can't picture BNSF giving UP any kind of a bargain rate price. Therefore, UP won't be abale to price any less than BNSF. If BNSF is *forced* to give UP a sweetheart price, that isn't open access. It's simply re-regulation. As it stands now, there's probably nothing stopping BNSF from renting track to another railroad, other than: 1) They don't want to, and 2) They would set the price high enough to at least match what they would make if they were hauling the freight. Wouldn't you?
Murphy Siding wrote: Datafever wrote: Murphy Siding wrote: Datafever wrote:I would more or less agree with your statement, but I would also like to clarify something - separation of infrastructure from operations is only one of many open access proposals that have been put forth. In most proposals, this is not an issue at all. Hmmm......I've never really heard of an open access scenario that doesn't involve seperation. Tell me more, please. Why does that not surprise me? Ah, well...Are you familiar with how interchange works? I don't. But I do know that it is a mechanism by which freight that originates with one railroad ends up being shipped over another railroad. A shipper connected to railroad A can ship product to a receiver connected to railroad B. Railroads A and B (and any connecting railroads) must have a mechanism in place that would allow this to happen. One proposal (as I see it) kind of expands on this. It would allow the shipper to negotiate a shipping price with railroad B (instead of railroad A which it is directly connected to). Railroad B pays railroad A for switching fees and standard interchange. But this increases competition because now the shipper can negotiate with either railroad in order to achieve the best possible rate. I must not be following this correctly. Suppose a Montana wheat shipper doesn't like the rates that BNSF is offering. He could then get a *better* rate from UP? Only problem is, UP has to pay BNSF for use of the track(?) I can't picture BNSF giving UP any kind of a bargain rate price. Therefore, UP won't be abale to price any less than BNSF. If BNSF is *forced* to give UP a sweetheart price, that isn't open access. It's simply re-regulation. As it stands now, there's probably nothing stopping BNSF from renting track to another railroad, other than: 1) They don't want to, and 2) They would set the price high enough to at least match what they would make if they were hauling the freight. Wouldn't you?
Murphy Siding wrote: Are some suppliers getting jabbed? Probably. Are some railroads making some big bucks off certain shippers? Certainly. Is open access the cure-all for this? No. It almost appears that pushing for the most extreme*fix* (open access) is thought to be a way to bring the railroads to some sort agreement to lower *some* rates. I doubt it. At this point, it would seem that the most likely improvement would come from the threat of re-regulation of some type, forcing the railroads to play by the rules of the already existing rate laws.
The problem with "rate laws" is that no one on this planet can possibly know what the rate should be. Should the BNSF charge $3,000 to move 100 tons of wheat from Great Falls, MT to Portland, OR - or should it only charge $2,000? There is literally No Way On Earth to know.
The Montana farmers and their politicians obviously want lower charges. They want the BNSF forced by Federal Government action to haul the grain at a lower rate. I obviously disagree with this. I don't believe the farmers have a "claim" on the railroad. I don't believe it is obligated to haul their grain at all, let alone at a price it doesn't freely agree to.
"Open Access" is not an answer because it will drive railroad cost up. This will benifit no one. The railroads operate in a competitive environment now. The competition may come from trucks and barges instead of another railroad, but the competition is there. (This does include that Montana wheat, which can easily move truck/barge to the export terminal in Portland, OR)
This very real competitive environment is why real rates steadily went down following productivity improvements from the time of deregulation until the capacity crunch.
The dang government just needs to stay out of it. Let competition control the prices - it works just fine. If the government gets involved they'll screw it up, just like they did when they had the Interstate Commerce Commission.
greyhounds wrote: "Open Access" is not an answer because it will drive railroad cost up. This will benifit no one. The railroads operate in a competitive environment now. The competition may come from trucks and barges instead of another railroad, but the competition is there. (This does include that Montana wheat, which can easily move truck/barge to the export terminal in Portland, OR)
Datafever wrote:Is it open access that you are against? Or is it specific implementations of open access that you are against? In other words, if open access could be implemented in such a way that the railroads were not economically disadvantaged (or even gained), would you support that?
You're going to have to be more specific. I haven't seen one thing that indicates there would be any overall net benifit from any form of OA, or from any increased government regulation of freight rates. They're both simply a a way to make the governement play Robin Hood and force a transfer of money from people who have invested in railroads to people who have invested in other things. (Such as farmland.)
greyhounds wrote: Datafever wrote:Is it open access that you are against? Or is it specific implementations of open access that you are against? In other words, if open access could be implemented in such a way that the railroads were not economically disadvantaged (or even gained), would you support that? You're going to have to be more specific. I haven't seen one thing that indicates there would be any overall net benifit from any form of OA, or from any increased government regulation of freight rates. They're both simply a a way to make the governement play Robin Hood and force a transfer of money from people who have invested in railroads to people who have invested in other things. (Such as farmland.)
Datafever wrote:From any form of OA? But railroads already engage in limited forms of OA. Trackage rights, haulage rights, and reciprocal switching rights are all forms of voluntary open access that railroads negotiate with each other for various reasons with no government regulation involved. I highly suspect that they engage in these transactions because it economically advantages them to do so.So would you support an implementation of open access that was not economically disadvantageous to the railroads?
I don't see trackage rights or recipricol switching as a form of Open Access.
If one railroad has excess capacity on a line, it may freely choose to sell that capacity to another railroad. I recently watched a UP intermodal roll through Downers Grove, IL on the BNSF. No problem. The BNSF has the capacity, UP needs it, they worked out a deal. (actually, SP worked out the deal, UP inherited it.)
But that doesn't mean the UP can run a local and spot cars of flour and sugar at the Peperige Farm plant in Downers Grove. That's not part of the agreement. Having two locals from two different railroads would drive up the cost.
Same with recipricol switching. One railroad serves the facility, not two or more. You send one crew in to do the job. That's all you need. Any more than that and you're wasting money.
greyhounds wrote: Datafever wrote:From any form of OA? But railroads already engage in limited forms of OA. Trackage rights, haulage rights, and reciprocal switching rights are all forms of voluntary open access that railroads negotiate with each other for various reasons with no government regulation involved. I highly suspect that they engage in these transactions because it economically advantages them to do so.So would you support an implementation of open access that was not economically disadvantageous to the railroads? I don't see trackage rights or recipricol switching as a form of Open Access. If one railroad has excess capacity on a line, it may freely choose to sell that capacity to another railroad. I recently watched a UP intermodal roll through Downers Grove, IL on the BNSF. No problem. The BNSF has the capacity, UP needs it, they worked out a deal. (actually, SP worked out the deal, UP inherited it.) But that doesn't mean the UP can run a local and spot cars of flour and sugar at the Peperige Farm plant in Downers Grove. That's not part of the agreement. Having two locals from two different railroads would drive up the cost. Same with recipricol switching. One railroad serves the facility, not two or more. You send one crew in to do the job. That's all you need. Any more than that and you're wasting money.
Okay, fair enough. Maybe instead of using the phrase "limited open access", I could call it "limited access". After all, as you point out, the access is not for just anyone, but only for the parties involved in the agreement.
I guess what I was trying to get at is that there are cases where the railroads already agree to let certain other railroads operate (in certain specified ways) on their tracks. I posit that they enter into these agreements because the find it advantageous to do so.
greyhounds wrote:The problem with "rate laws" is that no one on this planet can possibly know what the rate should be. Should the BNSF charge $3,000 to move 100 tons of wheat from Great Falls, MT to Portland, OR - or should it only charge $2,000? There is literally No Way On Earth to know.
Well, actually, there is. It's called the free market. It's just that those on receiving end of free market prices don't always see it that way.
I'd be all for that. I'd also be all for beer that "tastes great/is less filling", money that grows on trees, and weight loss programs that let me "eat anything, and not have to execise". I just don't see any of this happening. Railroads would be willing to (and do ) allow "access" over some lines, if they could make more money than doing it themselves.
The fact that they don't do it on a more wide-spread basis, leads me to believe it's not in their favor, monetarily.
Murphy Siding wrote: I'd be all for that. I'd also be all for beer that "tastes great/is less filling", money that grows on trees, and weight loss programs that let me "eat anything, and not have to execise". I just don't see any of this happening. Railroads would be willing to (and do ) allow "access" over some lines, if they could make more money than doing it themselves. The fact that they don't do it on a more wide-spread basis, leads me to believe it's not in their favor, monetarily.
greyhounds wrote: futuremodal wrote:[ Bad conclusion, Ken. There is nothing implicit about a second rail carrier "increasing costs" to serve the plant. There would be a shift of revenues from the one rail carrier to the new rail carrier, assuming they both use the same trackage. Loss of revenue does not equate to increasing costs. What might happen with rail on rail competition is a shift in the plant's production to products more prone to rail carriage if they are now afforded more reasonable rates and rail service offerings. Another faulty premise. Who says the plant or a 3rd party contractor can't handle the switching for both carriers? All the Class I's have to do is leave the inbounds and take out the outbounds. You know, like Ed's railroad. . Yes, the second rail carrier will increase cost. At a minimum you'll be using two crews to do what one crew does very well now. And you'll double the train frequency needed to handle the same traffic.
You are assuming that competing rail companies will not be able to maximize labor and capital productivity. Faulty assumption. Again, look at all the currrent multiple use, trackage rights, et al agreements - these are not increasing costs, they are actually lowering costs.
You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through.
Answer us this - why do you automatically assume intramodal rail competition would increase costs, but intermodal competition would not?
I expect more faulty premises to ensue........
Datafever wrote: So, why haven't they implemented open access all by themselves? Why are they waiting for congress to eventually pass a regulated form of open access? I would suggest that at least part of the reason is inertia. "We've always done it this way." Businesses and industries are highly resistant to change (note: yes, this is a way too general statement. There are businesses and industries that adapt quite readily to change - or at least the types of changes that they have faced so far).
Datafever wrote:So, why haven't they implemented open access all by themselves?
Because no one has shown a way to do it that would not cut into the railroads profits, and they are in business to make a profit. No CEO of a railroad, or any other business is going to go to the board or stockholders and say " I'm going to implement a plan that will hurt our bottom line on purpose". If someone could offer them a plan that improves the bottom line, that might be different. So far, no one has. Every open access plan that comes to light, seems to have as it's goal, to take away some of the railroads profits, and give them to shippers, receivers, or other railroads.
JSGreen wrote:d) Now, they "rent" rail capactiy to anyone interested, including the companies who bought their switching obligations, on a market basis, to anyone who is qualified to operate trains. IF this were to occur, would that meet the defination of Open Access...and could it occur without government involvement....or at least, government mandates?Which is my biggest concern about OA....if it is done by government mandate. I have not seen an example of where government has been able to do things better, or more economically, than private industry.
Murphy Siding wrote: Datafever wrote:So, why haven't they implemented open access all by themselves? Because no one has shown a way to do it that would not cut into the railroads profits, and they are in business to make a profit. No CEO of a railroad, or any other business is going to go to the board or stockholders and say " I'm going to implement a plan that will hurt our bottom line on purpose". If someone could offer them a plan that improves the bottom line, that might be different. So far, no one has. Every open access plan that comes to light, seems to have as it's goal, to take away some of the railroads profits, and give them to shippers, receivers, or other railroads.
CSSHEGEWISCH wrote:One thing that I have noticed as a recurring theme in these discussions about open access is how differential pricing negatively affects relatively small family farm-type operations. What I have failed to see is why the family farm needs to be protected from corporate farm operations while no such protection has been offered to family-owned small businesses from the likes of Wal-Mart, Lowe's, Ikea, Best Buy, Circuit City, etc.
Tell me about it. I work for a family owned lumber yard, in state full of family owned farms. The irony certainly isn't lost on me.
Datafever wrote: Murphy Siding wrote: Datafever wrote:So, why haven't they implemented open access all by themselves? Because no one has shown a way to do it that would not cut into the railroads profits, and they are in business to make a profit. No CEO of a railroad, or any other business is going to go to the board or stockholders and say " I'm going to implement a plan that will hurt our bottom line on purpose". If someone could offer them a plan that improves the bottom line, that might be different. So far, no one has. Every open access plan that comes to light, seems to have as it's goal, to take away some of the railroads profits, and give them to shippers, receivers, or other railroads. Why take a risk? Why make major changes to a business plan if there is no economic advantage to do so? Open access (without government regulation) will not necessarily harm the bottom line, but neither will it necessarily increase the bottom line either.As far as I know, you are right when you say that every open access plan is a way to cut into railroad profits. That's because the only reason for proposing those plans is to remedy the "problem" of "unfair" differential rates. And the only way to reduce the rates for those shippers is to take the money from someone else's pocket.
It looks to me, like we agree on this. All we need is for futuremodal to "set us straight "I guess?
JSGreen wrote:(which makes about a dime I've spent on this topic.....)Perhaps it is because there is more nostalgia and romanticism for the era of the Family Farm, than for downtown merchants or local lumber stores...and dont forget, most of the political rherotic and activism these days is driven by emotion, not by facts. Not everybody desires the same outcomes...for some people, having to pay more at a local store because the Big Box stores are not allowed in is unfair. For others, the buying power of the Big Box which might result in lower prices to the consumer, is unfair. As in most political ads, which is unfair depends on whose Ox is being gored...{thump}{bump}Dang...got so excited I fell off my soapbox....
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