Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="daveklepper"] Yes, Sam, but reputable research says that truckers pay only about 50% of the total maintenance costs of highways that their usage requires, and this says nothing about land use and equitable division of the tax load.   The point is not only that the massive investment in competition to railroads was made by government, but government prevented railroads from using their natural efficiency and postponed the intermodel revolution until after the Interstates were complete and long distance trucking became a major industiry. If Government had not interfered, starting 90 or 100 years ago, we would now have a healthy freight railroad system without anyone  considering long distance trucking as anything but a specialty case.   The competition would be between many competing railroads, and they would be proud to show potential freight shippers with the excellence of service they can provide by sterling long distance passenger trains with losses considered as first class advertizing. [/quote] Whether truckers pay their fair share of the roadway system has been debated and will continue to be debated for year.  What is missing in so many of these arguments are the grants and benefits bestowed on the railroads. For example, truckers pay hefty fuel taxes, which contribute a disproportionate percentage of revenues to the highway trust fund whilst the railroads pay no fuel taxes because they are classified as off road users. Whether these offset the property taxes is unclear. At the end of the day, however, it does not matter.  We are where we are; the key question is what are the best solutions for America's future transport needs. As an article in this week's or last week's Time made clear, America's freight railroads are on a roll.  For 2011 America's freight railroads had a median return on sales of 15.8%; on assets of 6.5%; and on equity, which is the most important indicator of profitability, of 19%.  In addition, CN, which is a Canadian company with significant operations in the United States, had corresponding returns of 27.4%, 9.9%, and 23 %, and CPR, also a Canadian company with significant U.S. operations, had returns of 12.5%, 4.8%, and 13.9% in the listed categories. For comparative purposes, the median return on sales for the Fortune 500 (America's freight railroads are Fortune 500 companies) was approximately 5% and the median return on equity was 14.3%, which was significanty above the historical return of 12%.  As these numbers show, at least from a financial perspective, America's freight railroads are performing substantially above the financial medians for America's largest corporations. This discussion, as tends to be true for most of our discussions, has strayed off the presenting issue:  What's Ahead for Amtrak?  In my view it will muddle along without any significant changes until the United States hits the impending financial wall, i.e. overseas investors stop buying our bonds or demand a significant risk premium. Then we will see an outcome similar to what is being experienced in Europe, and real change likely will happen.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag