mudchickenThe last time total government control happened, Colorado Midland, DL&NW and nearly D&SL got killed off by the first USRA in my backyard. Others suffered greatly until USRA was pressured to disband.
The Colorado Midland is one of my favorite fallen flags. Nevertheless, it was essentially a vanity project by a mine owner. It had no friendly western outlet, and after the mining boom had little on-line traffic. Other major railroads looked it over, but no takers. USRA had no actual effect on its inevitable outcome. Even if it had lasted a few more years, the aforementioned D&SL (w/D&RGW) would have finally buried it.
Convicted One Euclid But if railroads are actually consuming their capital, would it not be obvious as the physical plant falls apart? Is the Country actually going to just stand by as vulture capitalists rob us of our railroads? How long does it take for deferred maintenance to snowball to the point it can no longer be explained as a "run of bad luck"? Long enough for the stockholders to make their get away?
Euclid But if railroads are actually consuming their capital, would it not be obvious as the physical plant falls apart? Is the Country actually going to just stand by as vulture capitalists rob us of our railroads?
How long does it take for deferred maintenance to snowball to the point it can no longer be explained as a "run of bad luck"? Long enough for the stockholders to make their get away?
If it is really happening, it is happening fast by definition of "short term gain." I doubt that the damage could be hidden as a run of bad luck. It almost has the ring of a conspriacy theory.
MidlandMike mudchicken The last time total government control happened, Colorado Midland, DL&NW and nearly D&SL got killed off by the first USRA in my backyard. Others suffered greatly until USRA was pressured to disband. The Colorado Midland is one of my favorite fallen flags. Nevertheless, it was essentially a vanity project by a mine owner. It had no friendly western outlet, and after the mining boom had little on-line traffic. Other major railroads looked it over, but no takers. USRA had no actual effect on its inevitable outcome. Even if it had lasted a few more years, the aforementioned D&SL (w/D&RGW) would have finally buried it.
mudchicken The last time total government control happened, Colorado Midland, DL&NW and nearly D&SL got killed off by the first USRA in my backyard. Others suffered greatly until USRA was pressured to disband.
Greyhounds if my boss ran his company like a railroad that used PSR for their operation standards I would be unemployed alongside my 250 work kids aka the entire fleet of drivers we have. Why PSR doesn't freaking give a crap about the customers that the railroads are supposed to service instead they impose demands on those same customers who don't have any other choice but to accept them.
It's getting freaking ridiculous on the shipping times for our resins from Houston to Kansas City where they are interchanged to the BNSF. Before PSR it was around 4 days. Now it's between 1 week to well 3 months for one single car right now. That one was sent from Houston towards Kansas city but had a bad order on it a bad brake shoe at an inspection. It missed the train it was supposed to go on. Rather than hold it till the next day so not to destroy the metrics on their yard they threw it on a train heading for El Paso. It gets there then was forwarded towards freaking LA. Then to Chicago. Then instead of giving it to the BNSF in Chicago the UP sent it to Cheyenne then on to Salt Lake City. They still have yet to interchange it with the BNSF. We have already filed a complaint against the UP and still we are getting the runaround from the sales department. Last track had this car due us in May someplace in Oregon. Thankfully we ordered 20 cars of the same resin at the time as this screw up and got the other 19.
If I had a driver doing that with a load of my customers products my carrier wouldn't be hauling cattle waste for a nickel in less than a week.
Biden has the solution, break up the Class 1's and you can pick whichever railroad you want to serve your facility
Do you and your family want to share the road at 70 mph with chlorine and sulfuric acid .Most of the high hazard stuff probably goes by rail .Chlorine bleach is a dilute the pure stuff is in railcars
Juniata Man With regards to SD60MAC9500's post about Canada only having two Class 1's, not entirely the case. CSX and BNSF both have lines in Canada and I utilized interswitching to get from a CN served site to CSX. In fact certain regional railroads in Canada such as the late CMQ also were included in interswitching. I would also note that if you look at a rail map of the US, what you'll see is two carriers serving a very large chunk of territory in the west and two serving a large chunk in the east. Sure, CP, KCS and CN cover the central portion of the country and there you do have multiple carriers but, competitive switching doesn't cover hundreds of miles to reach an interchange. My recollection of the NITL proposal was the interchange had to be within 15-20 air miles of the captive shipper site. That certainly narrows the application. As to the suggestion a captive shipper partner with a short line to gain access to another Class 1, if you're only rail connection is to a Class 1, how do you propose getting the short line involved? Further, when most short lines are carved out of a Class 1, the carrier selling or leasing the track to the short line includes a paper barrier preventing the short line from interchanging with any Class 1 other than the original owner. I'll add one last thought; under competitive switching there is nothing that prevents the railroad serving the captive shipper from offering a more competitive rate and retaining the business. Whether the psr mindset at most Class 1's would allow them to do so remains to be seen. CW
With regards to SD60MAC9500's post about Canada only having two Class 1's, not entirely the case. CSX and BNSF both have lines in Canada and I utilized interswitching to get from a CN served site to CSX. In fact certain regional railroads in Canada such as the late CMQ also were included in interswitching. I would also note that if you look at a rail map of the US, what you'll see is two carriers serving a very large chunk of territory in the west and two serving a large chunk in the east. Sure, CP, KCS and CN cover the central portion of the country and there you do have multiple carriers but, competitive switching doesn't cover hundreds of miles to reach an interchange. My recollection of the NITL proposal was the interchange had to be within 15-20 air miles of the captive shipper site. That certainly narrows the application. As to the suggestion a captive shipper partner with a short line to gain access to another Class 1, if you're only rail connection is to a Class 1, how do you propose getting the short line involved? Further, when most short lines are carved out of a Class 1, the carrier selling or leasing the track to the short line includes a paper barrier preventing the short line from interchanging with any Class 1 other than the original owner.
I'll add one last thought; under competitive switching there is nothing that prevents the railroad serving the captive shipper from offering a more competitive rate and retaining the business. Whether the psr mindset at most Class 1's would allow them to do so remains to be seen.
CW
How much of Canada is served by BNSF and CSX? The exception proves the rule. The fraction of trackage pales in comparison to CN and CP. In that regard those two are anomalies that take the backseat.. Canada has more of an exclusive market. In that regard reciprocal swithcing may have it's place. However how do you fix interchange friction with RS stateside? Interline issues occur already with missed connections, and rate disputes. The problem we run into is the one size fits all. What works up North doesn't necessarily or will work down here. Similiar to the same argument with why we don't operate short fast freight like Europe.. Dynamics are not the same.
My suggestion of customers chipping in with a shortline for greater access while somewhat serious would require new RoW. Far as I know. No paper barriers exist on RoW constructed, and owned by a Shortline. Or should the customer construct their own spur and to another Class 1? Or better yet.. Maybe all future industrial sites should locate on shortlines that have access to multiple Class 1's.
mudchicken MidlandMike mudchicken The last time total government control happened, Colorado Midland, DL&NW and nearly D&SL got killed off by the first USRA in my backyard. Others suffered greatly until USRA was pressured to disband. The Colorado Midland is one of my favorite fallen flags. Nevertheless, it was essentially a vanity project by a mine owner. It had no friendly western outlet, and after the mining boom had little on-line traffic. Other major railroads looked it over, but no takers. USRA had no actual effect on its inevitable outcome. Even if it had lasted a few more years, the aforementioned D&SL (w/D&RGW) would have finally buried it. ....USRA moved all the traffic over to D&RG after they ran the CM plant into the ground. They were so bad that ATSF walked (ran) away from them.
....USRA moved all the traffic over to D&RG after they ran the CM plant into the ground. They were so bad that ATSF walked (ran) away from them.
The Colorado Midland didn't have the best operating profile either though.. I can see why Santa Fe or anybody else passed on it. From what I've read the CM couldn't handle the traffic.
BNSF has track in BC and Manitoba. CSX has a line in Quebec that runs from Beauharnois (near Montreal) down to Syracuse. Now, admittedly both of these are minor players in Canada and my original comment wasn't intended to imply they were. Both carriers do have experience with Canadian interswitching though.
The real point I was trying to make in my earlier post is that in about two thirds of the US, shippers have only two Class 1's, close to the 75% of Canada in which interswitching is possible.
Class 1's in this country have a multitude of working interchanges that make competitive switching workable in the US. And this was one of the elements in the NITL proposal, the interchange had to be an existing, working location.
Insofar as a newly built short line connection to a competing Class 1, I don't see this being a practical solution. As mentioned previously, a proposed short line in Colorado faced a firestorm of opposition to reactivating an existing piece of railroad. New construction would face almost insurmountable hurdles of land acquisition and environmental clearances. I'll address one last comment to BEAUSABRE; perhaps my sarcasm meter wasn't functioning when I read your comment that Biden's solution is to break up the Class 1's but, I sure as heck haven't seen that anywhere. Perhaps you'd care to expound on your conment?
SD60MAC9500 How much of Canada is served by BNSF and CSX? The exception proves the rule. The fraction of trackage pales in comparison to CN and CP. In that regard those two are anomalies that take the backseat.. Canada has more of an exclusive market. In that regard reciprocal swithcing may have it's place. However how do you fix interchange friction with RS stateside? Interline issues occur already with missed connections, and rate disputes. The problem we run into is the one size fits all. What works up North doesn't necessarily or will work down here. Similiar to the same argument with why we don't operate short fast freight like Europe.. Dynamics are not the same. My suggestion of customers chipping in with a shortline for greater access while somewhat serious would require new RoW. Far as I know. No paper barriers exist on RoW constructed, and owned by a Shortline. Or should the customer construct their own spur and to another Class 1? Or better yet.. Maybe all future industrial sites should locate on shortlines that have access to multiple Class 1's.
EuclidIf it is really happening, it is happening fast by definition of "short term gain." I doubt that the damage could be hidden as a run of bad luck. It almost has the ring of a conspriacy theory.
I think you are making things too "black and white". There are many flavors of "deferred" maintenance. Not restriping a parking lot now, that you plan to repave in 2 years, just as a simple illustration.
A business might, for instance defer all 'not absolutely essential' maintenance in order to use the money to buy back stock. After a few short years, the opportunists sell, and beat a hasty get-away. Is that a "conspiracy", or just shrewd operating?
I'd like to suggest getting a copy of the book "Good Profit" by Charles G. Koch. Refreshing account of creating a business.
Convicted One Euclid If it is really happening, it is happening fast by definition of "short term gain." I doubt that the damage could be hidden as a run of bad luck. It almost has the ring of a conspriacy theory. I think you are making things too "black and white". There are many flavors of "deferred" maintenance. Not restriping a parking lot now, that you plan to repave in 2 years, just as a simple illustration. A business might, for instance defer all 'not absolutely essential' maintenance in order to use the money to buy back stock. After a few short years, the opportunists sell, and beat a hasty get-away. Is that a "conspiracy", or just shrewd operating?
Euclid If it is really happening, it is happening fast by definition of "short term gain." I doubt that the damage could be hidden as a run of bad luck. It almost has the ring of a conspriacy theory.
If they were able to legally loot the assets of a major railroad and leave town without the railroad realizing what was happening, that would indeed be shrewd. But that looting is not what I am referring to as being a possible conspiracy theory.
By conspiracy theory, I am referring to the belief that such looting is actually happening under the guise of PSR. It may be a popular belief, but where is the evidence that it is happening?
EuclidBy conspiracy theory, I am referring to the belief that such looting is actually happening under the guise of PSR. It may be a popular belief, but where is the evidence that it is happening?
That's likely a topic for a separate thread. I don't want to annoy people by making them feel we've hijacked their thread.
And just to be abundanly clear, I do not have any "meat and potatoes" examples to share. I'm not sure that a shrewd operator doing such a thing would put up any flashing signs to attract attention, fwiw.
You might try calling up CSX and saying "hey, paint your bridge", and see what kind of response you get.
Gramp I'd like to suggest getting a copy of the book "Good Profit" by Charles G. Koch. Refreshing account of creating a business.
Oh, the Humanity!
"Good" and "Profit" in the same phrase? Charles G. Koch! Isn't he one of the Koch Brothers?
You should have warned us about your post that we could cover our eyes.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Convicted OneA business might, for instance defer all 'not absolutely essential' maintenance in order to use the money to buy back stock. After a few short years, the opportunists sell, and beat a hasty get-away. Is that a "conspiracy", or just shrewd operating?
Railroads in good financial health defer maintenence on branch and some main lines where it appears the traffic is declining over time to a point where the line may no longer be viable and might need to be taken out of service. It is efficient use of capital even though it might not be popular with train crews. A well managed railroad can spot the decline 5-7 years before the traffic falls to a point where maintaining the line exceeds the revenue brought in by the traffic.
I have never heard of a railroad borrowing money to buy stock as a preference over maintaining it's phyiscal plant. Further it is highly unlikely stock analysts would reward such a practice and very likely they would spot it and sound the alarm to investors.
I keep seeing this scenario espoused over and over again in these forums but the specific railroad that is doing it is never mentioned nor are financial stats provided that prove the theory that investment in physical plant is well below what it should be for a steady state of maintenece.
Think about it...if they put up a flashing sign announcing "This is our future!"...what would all the other stockholders do?
UP has used debt to finance stock repurchases. There may be others.
https://seekingalpha.com/article/4377377-union-pacific-good-long-buybacks-last
CMStPnP Convicted One A business might, for instance defer all 'not absolutely essential' maintenance in order to use the money to buy back stock. After a few short years, the opportunists sell, and beat a hasty get-away. Is that a "conspiracy", or just shrewd operating? Railroads in good financial health defer maintenence on branch and some main lines where it appears the traffic is declining over time to a point where the line may no longer be viable and might need to be taken out of service. It is efficient use of capital even though it might not be popular with train crews. A well managed railroad can spot the decline 5-7 years before the traffic falls to a point where maintaining the line exceeds the revenue brought in by the traffic. I have never heard of a railroad borrowing money to buy stock as a preference over maintaining it's phyiscal plant. Further it is highly unlikely stock analysts would reward such a practice and very likely they would spot it and sound the alarm to investors. I keep seeing this scenario espoused over and over again in these forums but the specific railroad that is doing it is never mentioned nor are financial stats provided that prove the theory that investment in physical plant is well below what it should be for a steady state of maintenece.
Convicted One A business might, for instance defer all 'not absolutely essential' maintenance in order to use the money to buy back stock. After a few short years, the opportunists sell, and beat a hasty get-away. Is that a "conspiracy", or just shrewd operating?
Juniata ManUP has used debt to finance stock repurchases. There may be others.
I thought that was a big part of the discussion we had here earlier about CSX, that the hedgefund got control of the board, ordered debt financed stock buyback, and then sold their holdings at considerable profit.
I have a recollection of that discussion but, wanted to leave it "may be others". UP I was sure of as I own UP stock. Main point was to respond to CMStPnP's comment he'd never heard of a railroad borrowing money to buy back stock in preference to maintaining its physical plant.
Convicted One Juniata Man UP has used debt to finance stock repurchases. There may be others. I thought that was a big part of the discussion we had here earlier about CSX, that the hedgefund got control of the board, ordered debt financed stock buyback, and then sold their holdings at considerable profit.
Juniata Man UP has used debt to finance stock repurchases. There may be others.
I've been doing some interesting reading the past hour, searching old threads here. I had recalled there was a fund prior to Mantle Ridge that tampered with CSX, but could not place the name...it was "Children's fund".
Other old threads I've found interesting include:
"Mantle Ridge Sells Most of It's Stake in CSX"
"So Why so Much Long Term Debt on the Balance Sheet?"
"Newswire: CSX Reports Record Earnings Thanks to Cost-Cutting, Efficiency Gains"
"Newswire: Analysts ask why Union Pacific isn't more like CSX"
Convicted One Euclid By conspiracy theory, I am referring to the belief that such looting is actually happening under the guise of PSR. It may be a popular belief, but where is the evidence that it is happening? And just to be abundanly clear, I do not have any "meat and potatoes" examples to share. I'm not sure that a shrewd operator doing such a thing would put up any flashing signs to attract attention, fwiw.
Euclid By conspiracy theory, I am referring to the belief that such looting is actually happening under the guise of PSR. It may be a popular belief, but where is the evidence that it is happening?
Certainly someone would notice if their railroad got stolen right out from under them. It should not require flashing signs to reveal the caper.
mudchicken....USRA moved all the traffic over to D&RG after they ran the CM plant into the ground. They were so bad that ATSF walked (ran) away from them.
Yes, did that run the D&RG into the ground or was it better built to handle the traffic? In either case the USRA did the same to both railroads- send all the traffic their way in turn, and yet the CM died and the D&RG thrived. If two students take the same test, and one passes and the other fails, I don't think the test is the problem.
Juniata ManUP has used debt to finance stock repurchases. There may be others. CW
But not causing deferred maintenence which was the other half of the assertion.
Convicted OneThink about it...if they put up a flashing sign announcing "This is our future!"...what would all the other stockholders do?
The investor calls are pretty frank about asking where money is being spent and the questions are very direct towards management. Management may obfuscate but the stock analysts rarely do. Nobody on the stock analyst side is shy about tip-toeing around an issue because it might lead to a sell off. In fact most analysts are on the call because their firms are considering a purchase or they need to publish their analysis for clients to see and their butt is on the line in regards to discovery. So I really do not have to think about it. I have sat in on numerous conference calls (all of which are open to the public and announced).
Paul Milenkovic Gramp I'd like to suggest getting a copy of the book "Good Profit" by Charles G. Koch. Refreshing account of creating a business. Oh, the Humanity! "Good" and "Profit" in the same phrase? Charles G. Koch! Isn't he one of the Koch Brothers? You should have warned us about your post that we could cover our eyes.
Yup, "How Creating Value for Others Built One of the World's Most Successful Companies"
I have a hunch the rap artist who was ambushed (shot 64 times) while leaving Chicago's Cook County Jail the other day did not read the book.
Any problem with profit usually comes down to what people think is an appropriate amount (very subjective) and where it ends up (also subjective).
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68 Any problem with profit usually comes down to what people think is an appropriate amount (very subjective) and where it ends up (also subjective).
I agree with that on the surface. Fundamentally though, I think a whole lot of people do not have a clear, grounded understanding of the subject. A while back, Greyhounds posted one of the best explanations of creating wealth I have read.
The other issue is that railroads (like all big corps) do not operate in a vacuum. Their actions (or inactions) can and do have a direct consequence on the public at large of which they have to share this little rock we all live on.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
They have reduced their capex concurrent with borrowing money to buy back stock. They may not be deferring critical maintenance but, the capital reduction can be an indication they have decided to defer some projects.
CMStPnP Juniata Man UP has used debt to finance stock repurchases. There may be others. CW But not causing deferred maintenence which was the other half of the assertion.
Juniata Man UP has used debt to finance stock repurchases. There may be others. CW
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