Would A Transcontinental Railroad Mean Re-Regulation?

[wallyworld]

I just caught up to this doomed merger..believe it or not....I reworded the post as I pondered the implications of what I wrote.

http://topics.nytimes.com/top/news/business/companies/burlington_northern_santa_fe_corporation/index.html?offset=30&

I was surprised at UP's reaction..perhaps I should not be..

http://commerce.senate.gov/hearings/0323dav.pdf

Is the STB being a regulatory curbstop by insisting on the "public good" by protecting competition as a prerequisite for a merger? You can count Class 1's with one hand. Is there an end run possible? 

I just read this statement from STB and it sounds like "double talk" Improve your customer service...you serve your customer as your defacto regulatory agent with a guarantee you will provide competition from your competitor as a manditory requirement...Huh? To sell a Chevy you have to have a Toyota on your lot....as a prerequisite to sell Chevy's. It's a buyers market..leaning on the STB..to improve "customer service" 

http://www.railwayage.com/may01/stb_chairmans_message.html

Is the re-regulation of rates a manditory in the aftermath of a true transcontinental merger?

 

 

[beaulieu]

I just caught up to this doomed merger..believe it or not....

http://topics.nytimes.com/top/news/business/companies/burlington_northern_santa_fe_corporation/index.html?offset=30&

I was surprised at UP's reaction..perhaps I should not be..

http://commerce.senate.gov/hearings/0323dav.pdf

Is the STB being a regulatory curbstop by insisting on the "public good" by protecting competition as a prerequisite for a merger? You can count Class 1's with one hand. Is there an end run possible? 

 

Things are always more complicated than they seem. All the other railroads were hostile to that proposed merger. NS and CSX would have diverted some traffic to punish CN/BNSF, at least as there was capacity to do so. I don't expect any more mergers. With as few railroads as are left, the synergies to be gained by merging are getting smaller, already all railroads work with each other, they have to. The Halifax port thing is a Red Herring, yes the physical harbor is better, but the geographical location is worse, the physical infrastructure is less, and the customers are in the New York area. And Oh yes moving a container by ship costs less than by train, what does Halifax offer, only less congestion, one final thought only one railroad serves Halifax, CN, no competition on price or service.

[beaulieu]

Note to Wallyworld that the cited message was written in 2001. Linda Morgan hasn't been the Chairman of the STB for several years now, in fact her successor Roger Nober has also moved on. The current Chairman of the STB is a Mr. Nottingham.

[wallyworld]

Thanks. I assumed they are interchangable talking heads in light of the reactionary and obstructionist nature of having a railroad assure competition when I assumed that was the market's function....Specifically it just seemed more like an expediant straw dog to thwart further mergers in light of previous "smooth" mergers... which were a template for a three stooges act...based on the loud reaction of shippers when their pet corns were trod upon...delays, congestion, etc.  

Not much of a plan but it makes a good temporary barrier against perceived chaos which would make it Act 2 of a play on STB's court. I see it being revised sooner than later at the 11th hour....It sounds like (translation) You fellows screwed up the last time...we took alot of heat for it...take care of your customers and get them off my back...if you want to merge make sure oh, by the way... that there are equivilent tangents or grant access with another sytem where there is a captive customer with political pull....( let them figure that one out...i'll be retired by then)...good luck...now thats a plan for success!

Translation of that means..a transcontinental will come with regulatory stipulations. No one is rushing to the altar.