Murphy Siding wrote: futuremodal wrote:But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No. But OA in those countries has brought new business to their respective rail industries. Why do you think that is bad? Well, actually, in the case of Britain, I believe the answer is yes. The British posters on here have said that the Government has had to prop up the ROW company, so it wouldn't go belly up. Oops! I see you didn't mention the British Rail system in your example.
futuremodal wrote:But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No. But OA in those countries has brought new business to their respective rail industries. Why do you think that is bad?
Well, actually, in the case of Britain, I believe the answer is yes. The British posters on here have said that the Government has had to prop up the ROW company, so it wouldn't go belly up. Oops! I see you didn't mention the British Rail system in your example.
Yes, I did. Here's the full quote:
But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No. But OA in those countries has brought new business to their respective rail industries. Why do you think that is bad? The only way OA would increase costs if, again, one pulls an OJ. The British did just that with their version, breaking up one company into 100+ companies. No wonder NA railroad hacks point to the British experience as being the poster child for an OA Armeggedon.
But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No. But OA in those countries has brought new business to their respective rail industries. Why do you think that is bad?
The only way OA would increase costs if, again, one pulls an OJ. The British did just that with their version, breaking up one company into 100+ companies. No wonder NA railroad hacks point to the British experience as being the poster child for an OA Armeggedon.
Now, do you want to explain why you neglected the full quote?
Thanks to Chris / CopCarSS for my avatar.
bobwilcox wrote: futuremodal wrote: But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No. Show us the data.
futuremodal wrote: But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No.
But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No.
Bob That is a most unfair and unreasonable request. FM doesn't have to prove anything, because he is just right.
"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
futuremodal wrote:But you can't back that up with real world stats, can you? Has the Aussie OA system caused their costs to increase? No. Has the German, Dutch, or Italiam IA system caused their costs to increase? No.
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. No, the cost will go up. You're going to use a minimum of two trains and two crews to do the work now done by one.
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.
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.
No, the cost will go up. You're going to use a minimum of two trains and two crews to do the work now done by one.
No, you're not. You are making an incredibly faulty assumption that the free market is zero sum gain. You are forgetting that the market will work things out.
Your scenario is unrealistic to begin with. Where do you have one crew working one customer limited to a full work week or less on one line, and no one else? Very rarely if ever. Most likely the current crew is two or three shifts operating a local, picking up and dropping off for various customers. Right there you have a two or three way split.
No additional crews overall = no cost increase.
Taking your example for analysis, the most likely scenario for small carload aggregation would be the franchise model. One operator is given a franchise to work that one shift per day, 5 or less days per week local. After a certain time, if the shippers don't like what they are getting in the way of service, they can yank the franchise from the underperformer and give it to a second operator. If the shippers are satisfied with the current operator, he keeps the contract for another term.
No addtional crews = no cost increase.
Then there is that supreme example of free marketeering - the increase in business with access to input price competition. Often there is production that is skewed (usually at a higher cost to the producer) for the benefit of truck haul. The new intramodal competition may cause that producer to go back to more basic production that favors rail haul. Perhaps there is an idle production facility (probably shut down due to captive rail rates) that restarts production with that market guarantee of intramodal competition. Perhaps there is a company siting for a new production facility that locates on the line in question rather than locating overseas or over the border because of that implicit competitive rate guarantee. Etc, etc, etc.
New business = new revenue for rail industry.
You see, Ken, you gotta pull your head out of the zero sum box and start to see how new intramodal rail competition increases economic activity that benefits the rail industry.
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. Trackage rights are not the same as OA. They're basicallly a 'bridge' where one railroad sells excess capacity to another railroad. A railroad operating on TR generally can not serve customers on the line. There are exceptions such as Reno/Sparks and Salt Lake City.
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.
Trackage rights are not the same as OA. They're basicallly a 'bridge' where one railroad sells excess capacity to another railroad. A railroad operating on TR generally can not serve customers on the line. There are exceptions such as Reno/Sparks and Salt Lake City.
Well, those "exceptions" speak volumes, don't they? I.E. > IT WORKS!
The inherent inefficiencies of an open access system come into play when two or more rail carriers try to serve the same customer.
Here's where you are stuck in a rut. Remember, highways are open access, waterways are open access, European railroads are mostly open access (and moving to eventual system wide open access), Aussie railroada are open access.......EVERYONE BUT NA RAILROADS! Obviously, those aforementioned open access systems are very efficient from a market standpoint, yet they share the same basic infrastructural principle as NA railroads - you can fit basically one ROW unit per corriodor. So why are these OA systems so doggone efficient? Because the "natural monopoly" portion is separate from the transporter portion. The aggregation principle you cling to is not written in stone as being the sole determinant of one service provider being more efficient than two service providers, because it is superceded by the (1) franchise model of OA, (2) the crew split scenario, and (3) the new business potential of competitive markets. All three such efficiencies cannot exist in the monopoly fiefdom. Therefore, it is just plain ignorant to bestow the efficiency crown to the monopoly.
futuremodal wrote: You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through. I never said the 3rd party would need three crews. You misunderstood. The 3rd party would BE the thrird crew. Instead of the one crew now handeling things, you'd have: 1) the 3rd party crew doing the swtiching, 2) Railroad "A's" crew picking up some of the loads, and 3) Railroad "B's" crew picking up part of the loads. Productivity would plumet under open access. Under the "3rd Party Scenario" you'd have a seperate switch crew, and each of the two road crews would handle fewer cars than they now do. Reducing productivity is a really bad idea. Railroad crews are trained (no pun intended) professionals. They don't come cheap. (Nor should they.) Use them wisely and well. Replacing one crew with three is not such a use.
futuremodal wrote: You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through.
You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through.
I never said the 3rd party would need three crews. You misunderstood. The 3rd party would BE the thrird crew. Instead of the one crew now handeling things, you'd have: 1) the 3rd party crew doing the swtiching, 2) Railroad "A's" crew picking up some of the loads, and 3) Railroad "B's" crew picking up part of the loads. Productivity would plumet under open access. Under the "3rd Party Scenario" you'd have a seperate switch crew, and each of the two road crews would handle fewer cars than they now do. Reducing productivity is a really bad idea.
Railroad crews are trained (no pun intended) professionals. They don't come cheap. (Nor should they.) Use them wisely and well. Replacing one crew with three is not such a use.
Well, only a true "professional" would simply aquiesce to such a non-sensical performance. Almost as farcical as OJ's glove not fitting - yes, the glove would fit him in any other situation, except when putting on the glove would bring a guilty sentence. I could really see some of the current crop of rail managers pulling an OJ to *prove* that intramodal competition "just won't work". Which is why the task of dragging the NA railroad industry into the 21st century will probably fall to non-railroaders.
futuremodal wrote: Answer us this - why do Reply Edit Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Tuesday, November 7, 2006 1:01 AM greyhounds wrote:Well, I think you're using a bad example. Okay, so I skewed things a little bit just to illustrate my line of thinking. Let me posit another example. Let's say a large facility generates two unit trains per day, served by railroad A. If railroad B is allowed to come along and manages to garner half the traffic, it might get one train a day while railroad A keeps one train a day. So, no increase in crews or switching at all. At this point, I might be tempted to just ask, "so where does the increase in costs come from in this example?" If the rates are unregulated, railroad A can just charge railroad B a hefty rate for trackage fees. In such a situation, railroad A has no decrease in revenues, or perhaps a decrease that is commensurate with the reduction in revenue. Railroad B, having to pay high trackage fees, cannot offer the customer significant rate reductions, so why would the facility bother diverting traffic to railroad B in the first place? And the only thing that regulation does is take money out of railroad A's pocket and put it into the pocket of the customer. One company becomes more profitable at the expense of another company becoming less profitable. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Tuesday, November 7, 2006 12:45 AM What I've learned: At first, it seemed that most people were against open access because of the regulatory aspects that accompanied most open access proposals. Of course, those proposals were driven by shippers that felt they were paying "way too much" to ship because they were in non-competitive situations. And a non-regulatory open access implementation would not provide relief, so why bother. But I couldn't see any reason to not support a non-regulatory open access proposal if one should come along. However, it is apparent that even a non-regulated open access implementation would increase railroad industry costs. In this way, the railroad industry is not at all like the trucking industry. Example: Say trucking company A has twenty customers that each ship one load per day, and each shipment requires one driver for one day. If trucking company B comes along and takes away half the customers, then trucking company A now needs only ten drivers and rigs and company B only needs ten drivers and rigs. Very little has changed. There are still only twenty drivers employed and twenty rigs utilized. As the trucking industry has low fixed costs and high variable costs, it is relatively easy for a trucking company to adjust its resources based on its customer base. While it is true that the competition between the trucking companies will keeps rates low, those rates will stabilize at a point where each company is making a reasonable rate of return on investment. If the rates were to drop below that point, the less efficient company would remove itself from the marketplace (or be facing bankruptcy). The example that I used in my previous post illustrates that a similar situation does not hold true for railroads. In addition, because railroads have high fixed costs, it is not very easy for a railroad to adjust its resources. The investment of installing new track requires a very long term outlook of potential profitability for the traffic over that track. I have also seen comparisons between the railroad industry and power companies. But that analogy breaks down when it is taken into consideration that all railroads operate at pretty much the same level of efficiency. (Some may say that shortlines are more efficient that class 1s. Fine. But even so, most shortlines operate at the same level of efficiency, and most class 1s operate at the same level of efficiency. There may be exceptions.) One railroad cannot provide terminal or switching service cheaper than another railroad can - at least not significantly so. I know, I know, that statement is probably way too generalized, but bear with me. Power companies have large variances in operating costs. A hydroelectric dam, a nuclear power plant, and a coal-burning plant all have unique characteristics in the cost and quantity of electricity generated. There are transmission losses, and while I don't know exactly what those losses are, I suspect that they are sufficient that a nuclear plant in NY is going to be at a competetive disadvantage to a nuclear plant in NV when it comes to attracting customers in CA. IMO, what would be the result of a non-regulated implementation of open access where all railroads had access to all customers? First of all, chaos. Rate drops for captive shippers, but only in the short run. Eventually, because of bankruptcies, industry would stop competing for the marginal customers who would lose service altogether or end up paying even more than they do now. Major shippers that now pay relatively high rates would see rate decreases, but that would decrease the profitability of railroads as whole. More bankruptcies. Eventually things would shake down to a couple of major railroads and a multitude of smaller railroads that managed to carve out a profitable niche for themselves that they can defend against competitors. Lacking government interference, I think that railroads will continue to engage in voluntary trackage rights, switching rights, terminal rights and so on - because they find it convenient and/or economical to do so. While I have always been against regulation, I had thought that open access in and of itself was not a bad thing. At this point, I cannot see any benefit at all to any forms of government imposed open access, regardless of how inclusive one is in defining open access. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply greyhounds Member sinceAugust 2003 From: Antioch, IL 4,371 posts Posted by greyhounds on Monday, November 6, 2006 11:57 PM Datafever wrote:. If a particular terminal area (say a branch line out in the middle of nowhere) is serviced by one railroad, that railroad sets up a schedule to service that terminal area, say twice a week. Now, if another railroad gains access to those customers and that traffic, it will also have to provide service twice a week. The first railroad has no reduction in costs, but now has only half the revenue. The second railroad has increased its costs in order to gain marginal revenue. Overall, the costs have gone up (by the amount that it costs the second railroad to service the terminal area) while revenues have almost certainly gone down (because competition has forced lower rates). Have I painted that picture correctly? Well, I think you're using a bad example. I have a freind who is an RN. She has refered to people as being in "End Stage". That means they're dying and there isn't anything anyone can do about it. A twice a week line is in "End Stage". Just like the person, it'll stay in operation until something significant hapens, then the decision will probably be made "just to let it go" and not keep it on life support. It is unlikely that any open access train operating company would set itself up to go after business on such a line. The first railroad isn't going to share its locomotive and crew, so the second operating company would have to acquire the same to go after business that won't support one train per day. Cost go through the roof under such a scenario. Aside from that, I think you've basically got the understanding. OA in such a situation would basically double operating costs - and if it didn't significantly increase the business it would simply hasten the inevitable demise of the twice a week line So could the introduction of a second train operating company significantly increase the business? Why would it? This could only happen if the current operator was incredibly stupid and wasn't anywhere near maximizing their own business potential. Not too likely. "By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that. Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 10:11 PM greyhounds wrote:No, the cost will go up. You're going to use a minimum of two trains and two crews to do the work now done by one. You know, until I read your post, greyhounds, I never really understood why the costs would go up. Thanks to your explanation, I now "get it". But just to clarify in my own mind, bear with me a moment. If a particular terminal area (say a branch line out in the middle of nowhere) is serviced by one railroad, that railroad sets up a schedule to service that terminal area, say twice a week. Now, if another railroad gains access to those customers and that traffic, it will also have to provide service twice a week. The first railroad has no reduction in costs, but now has only half the revenue. The second railroad has increased its costs in order to gain marginal revenue. Overall, the costs have gone up (by the amount that it costs the second railroad to service the terminal area) while revenues have almost certainly gone down (because competition has forced lower rates). Have I painted that picture correctly? greyhounds wrote: Trackage rights are not the same as OA. They're basicallly a 'bridge' where one railroad sells excess capacity to another railroad. A railroad operating on TR generally can not serve customers on the line. There are exceptions such as Reno/Sparks and Salt Lake City. The inherent inefficiencies of an open access system come into play when two or more rail carriers try to serve the same customer. That would be the whole misguided point of open access - gettting a facility to be served by more than one "Natural Monopoly" - thereby driving up the cost of rail transportation. Trackage rights are not, in any way, shape, or form, equivalent to open access. If they were, your dream would be fulfilled. OA would be a reality. It thankfully isn't. UP and BNSF have trackage rights over very signficant parts of each other's systems. These "rights" sure don't make for open access - thankfully again. At first, I wanted to take exception to your statement that trackage rights are not in any way equivalent to open access. In my Internet explorations, I have found sites that definitely do call trackage rights a form of open access. However, I find your argument to be persuasive, and I agree with it. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply greyhounds Member sinceAugust 2003 From: Antioch, IL 4,371 posts Posted by greyhounds on Monday, November 6, 2006 9:17 PM 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. No, the cost will go up. You're going to use a minimum of two trains and two crews to do the work now done by one. futuremodal wrote: 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. Trackage rights are not the same as OA. They're basicallly a 'bridge' where one railroad sells excess capacity to another railroad. A railroad operating on TR generally can not serve customers on the line. There are exceptions such as Reno/Sparks and Salt Lake City. The inherent inefficiencies of an open access system come into play when two or more rail carriers try to serve the same customer. That would be the whole misguided point of open access - gettting a facility to be served by more than one "Natural Monopoly" - thereby driving up the cost of rail transportation. Trackage rights are not, in any way, shape, or form, equivalent to open access. If they were, your dream would be fulfilled. OA would be a reality. It thankfully isn't. UP and BNSF have trackage rights over very signficant parts of each other's systems. These "rights" sure don't make for open access - thankfully again. futuremodal wrote: You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through. I never said the 3rd party would need three crews. You misunderstood. The 3rd party would BE the thrird crew. Instead of the one crew now handeling things, you'd have: 1) the 3rd party crew doing the swtiching, 2) Railroad "A's" crew picking up some of the loads, and 3) Railroad "B's" crew picking up part of the loads. Productivity would plumet under open access. Under the "3rd Party Scenario" you'd have a seperate switch crew, and each of the two road crews would handle fewer cars than they now do. Reducing productivity is a really bad idea. Railroad crews are trained (no pun intended) professionals. They don't come cheap. (Nor should they.) Use them wisely and well. Replacing one crew with three is not such a use. futuremodal wrote: Answer us this - why do you automatically assume intramodal rail competition would increase costs, but intermodal competition would not? I never addressed that. You are assuming an assumption on my part. Here's what I know: Open access will increase the total cost of rail transport and also the average cost of rail transport. Intermodal competition (trucks, barges, etc.) will reduce the total cost of rail transport (because there will be less of it) , but increase the average cost of rail transport (because fixed expenses won't fall with the decline in traffic and will have to be borne by a smaller business base.). But you can't very well tell a shipper not to put a load on a truck if that's what he's got in mind. "By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that. Reply JSGreen Member sinceOctober 2004 From: at the home of the MRL 690 posts Posted by JSGreen on Monday, November 6, 2006 3:04 PM Well, I "always" try to avoid absolutes...unless of course I am absolutely positive...Like and old 3-stooges routine....Larry: "Are you sure?"Curley: "I'm POSITIVE!"Mo: "Only fools are positive!"LArry: "Are You sure?"Mo: "I'm Positive!"(Nyuck, Nyuck, Nyuck.....) ...I may have a one track mind, but at least it's not Narrow (gauge) ..... Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 1:38 PM 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....Most? How about all? Thanks to Chris / CopCarSS for my avatar. Reply JSGreen Member sinceOctober 2004 From: at the home of the MRL 690 posts Posted by JSGreen on Monday, November 6, 2006 12:54 PM 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.(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.... ...I may have a one track mind, but at least it's not Narrow (gauge) ..... Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 11:08 AM 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? Thanks to Chris / CopCarSS for my avatar. Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 10:58 AM 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. Thanks to Chris / CopCarSS for my avatar. Reply CSSHEGEWISCH Member sinceMarch 2016 From: Burbank IL (near Clearing) 13,540 posts Posted by CSSHEGEWISCH on Monday, November 6, 2006 10:09 AM 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. The daily commute is part of everyday life but I get two rides a day out of it. Paul Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 9:53 AM 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. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 9:20 AM 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. I would call it open access. If any qualified operator is allowed to run trains over those tracks, then I don't see how it could be called anything other than open access. Even if there are restrictions, it would still be open access. For instance, weight restrictions. Or crew restrictions (the requirement to use a "local" conductor). Can it occur without a government mandate? Maybe, maybe not. Can the railroads be convinced to engage in a huge overhaul of their operating practices? Might take some time. Might take some prodding. But who is to say that that isn't where the industry will take itself in twenty years without any government interference at all. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 9:07 AM 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. Thanks to Chris / CopCarSS for my avatar. Reply JSGreen Member sinceOctober 2004 From: at the home of the MRL 690 posts Posted by JSGreen on Monday, November 6, 2006 8:57 AM 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).I would submit that part of the reason is they dont see what the advantage would be to themselves. If someone could come up with "Win-Win" sceanario, (or could convince the rail road involved it was a win-win sceanario), someone would give it a try.How is this for a possibility? (Lets not argue if it is ACTUALLY happening, but consider the possibility....)a) Class I rail roads seem to be abandoning short lines, and selling off entire divisions for regionals to operate and gather up traffic so the Class I can concentrate on transporting railcars from Point A to Point G without worrying about points B,C,D,E, and F.b) How long will it take someone in the front office to believe that "all the money" is in the transport, not the collection and distrubution of the railcars?c) So, they divest themselves of the "Less Profitable Modes", selling off to smaller operators who can operate the collection and distribution more economically. (Possibly becasue of non-union employees)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. ...I may have a one track mind, but at least it's not Narrow (gauge) ..... Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, November 6, 2006 8:24 AM 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. 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. You're stuck on faulty. Why would a 3rd party need three crews? You really aren't thinking this through. 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. 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........ Reply Edit Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 8:06 AM 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. I don't disagree with what you are saying. If there was an implementation of open access that was obviously going to make the railroads richer, I think that we can safely assume that they railroads would have already implemented it. But this can also be looked at from different perspectives. You have already pointed out that if regulation is not involved, then railroads will just set rates sufficiently high to offset any potential loss of revenue. Would you not agree that any implementation of open access that does not involve regulation of rates (or other aspects of operation) does not cause economic disadvantages to the railroads? In other words, if the railroads can set their own rates (whether the infrastructure is separated or not is quite irrelevant), then full and complete open access will not pose a financial burden on any railroad. 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). "I'm sittin' in a railway station, Got a ticket for my destination..." Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 7:29 AM 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? 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. Thanks to Chris / CopCarSS for my avatar. Reply Murphy Siding Member sinceMay 2005 From: S.E. South Dakota 13,569 posts Posted by Murphy Siding on Monday, November 6, 2006 7:09 AM 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. Thanks to Chris / CopCarSS for my avatar. Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 12:45 AM 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. "I'm sittin' in a railway station, Got a ticket for my destination..." Reply greyhounds Member sinceAugust 2003 From: Antioch, IL 4,371 posts Posted by greyhounds on Monday, November 6, 2006 12:32 AM 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. "By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that. Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Monday, November 6, 2006 12:13 AM 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.) 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'm sittin' in a railway station, Got a ticket for my destination..." Reply greyhounds Member sinceAugust 2003 From: Antioch, IL 4,371 posts Posted by greyhounds on Monday, November 6, 2006 12:00 AM 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.) "By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that. Reply Datafever Member sinceSeptember 2006 From: Mt. Fuji 1,840 posts Posted by Datafever on Sunday, November 5, 2006 11:41 PM 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) 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? "I'm sittin' in a railway station, Got a ticket for my destination..." Reply greyhounds Member sinceAugust 2003 From: Antioch, IL 4,371 posts Posted by greyhounds on Sunday, November 5, 2006 11:22 PM 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. "By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that. Reply « First«2345678»Last » Join our Community! Our community is FREE to join. To participate you must either login or register for an account. 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Answer us this - why do
greyhounds wrote:Well, I think you're using a bad example.
Well, I think you're using a bad example.
Datafever wrote:. If a particular terminal area (say a branch line out in the middle of nowhere) is serviced by one railroad, that railroad sets up a schedule to service that terminal area, say twice a week. Now, if another railroad gains access to those customers and that traffic, it will also have to provide service twice a week. The first railroad has no reduction in costs, but now has only half the revenue. The second railroad has increased its costs in order to gain marginal revenue. Overall, the costs have gone up (by the amount that it costs the second railroad to service the terminal area) while revenues have almost certainly gone down (because competition has forced lower rates). Have I painted that picture correctly?
If a particular terminal area (say a branch line out in the middle of nowhere) is serviced by one railroad, that railroad sets up a schedule to service that terminal area, say twice a week. Now, if another railroad gains access to those customers and that traffic, it will also have to provide service twice a week. The first railroad has no reduction in costs, but now has only half the revenue. The second railroad has increased its costs in order to gain marginal revenue. Overall, the costs have gone up (by the amount that it costs the second railroad to service the terminal area) while revenues have almost certainly gone down (because competition has forced lower rates).
Have I painted that picture correctly?
Well, I think you're using a bad example. I have a freind who is an RN. She has refered to people as being in "End Stage". That means they're dying and there isn't anything anyone can do about it.
A twice a week line is in "End Stage". Just like the person, it'll stay in operation until something significant hapens, then the decision will probably be made "just to let it go" and not keep it on life support.
It is unlikely that any open access train operating company would set itself up to go after business on such a line. The first railroad isn't going to share its locomotive and crew, so the second operating company would have to acquire the same to go after business that won't support one train per day. Cost go through the roof under such a scenario.
Aside from that, I think you've basically got the understanding.
OA in such a situation would basically double operating costs - and if it didn't significantly increase the business it would simply hasten the inevitable demise of the twice a week line
So could the introduction of a second train operating company significantly increase the business? Why would it? This could only happen if the current operator was incredibly stupid and wasn't anywhere near maximizing their own business potential. Not too likely.
greyhounds wrote:No, the cost will go up. You're going to use a minimum of two trains and two crews to do the work now done by one.
You know, until I read your post, greyhounds, I never really understood why the costs would go up. Thanks to your explanation, I now "get it". But just to clarify in my own mind, bear with me a moment.
greyhounds wrote: Trackage rights are not the same as OA. They're basicallly a 'bridge' where one railroad sells excess capacity to another railroad. A railroad operating on TR generally can not serve customers on the line. There are exceptions such as Reno/Sparks and Salt Lake City. The inherent inefficiencies of an open access system come into play when two or more rail carriers try to serve the same customer. That would be the whole misguided point of open access - gettting a facility to be served by more than one "Natural Monopoly" - thereby driving up the cost of rail transportation. Trackage rights are not, in any way, shape, or form, equivalent to open access. If they were, your dream would be fulfilled. OA would be a reality. It thankfully isn't. UP and BNSF have trackage rights over very signficant parts of each other's systems. These "rights" sure don't make for open access - thankfully again.
The inherent inefficiencies of an open access system come into play when two or more rail carriers try to serve the same customer. That would be the whole misguided point of open access - gettting a facility to be served by more than one "Natural Monopoly" - thereby driving up the cost of rail transportation. Trackage rights are not, in any way, shape, or form, equivalent to open access.
If they were, your dream would be fulfilled. OA would be a reality. It thankfully isn't. UP and BNSF have trackage rights over very signficant parts of each other's systems. These "rights" sure don't make for open access - thankfully again.
At first, I wanted to take exception to your statement that trackage rights are not in any way equivalent to open access. In my Internet explorations, I have found sites that definitely do call trackage rights a form of open access. However, I find your argument to be persuasive, and I agree with it.
futuremodal wrote: 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.
futuremodal wrote: Answer us this - why do you automatically assume intramodal rail competition would increase costs, but intermodal competition would not?
Answer us this - why do you automatically assume intramodal rail competition would increase costs, but intermodal competition would not?
I never addressed that. You are assuming an assumption on my part. Here's what I know:
Open access will increase the total cost of rail transport and also the average cost of rail transport.
Intermodal competition (trucks, barges, etc.) will reduce the total cost of rail transport (because there will be less of it) , but increase the average cost of rail transport (because fixed expenses won't fall with the decline in traffic and will have to be borne by a smaller business base.).
But you can't very well tell a shipper not to put a load on a truck if that's what he's got in mind.
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....
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.
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.
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.
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.
It looks to me, like we agree on this. All we need is for futuremodal to "set us straight "I guess?
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.
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.
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).
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.
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. .
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.
I expect more faulty premises to ensue........
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.
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.
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?
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.
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.
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: 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.)
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: "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)
"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)
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.
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.
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.
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