Does Franken have a point, or is he living in the 1910’s instead of the 2010’s?
Here is the point he makes in his letter. Whether or not it is a problem I’ll leave up to you. From my vantage point (northern New Jersey) I have little insight into the issue.
“Recent analysis indicates that 78% of the 28,000 “stations” in the continental United States where a major freight railroad picks up or delivers freight are served by a single railroad. Of the remaining 22% of rail stations that are nominally served by a second railroad, a significant number are served by a short line or regional rail carrier that is dominated by the major railroad serving the location. This lack of competition in our national freight rail transportation system and the resulting railroad monopoly power over a significant portion of annual railroad freight movement create significant problems for our state and national economies.”
Well - Lets look at that. The ‘competition’ that those railroads have is out on the highway, paid for with our tax dollars! When he talks about the local economy, most of the shipped product is usually grain, and around here much of it is trucked to river ports like Winona, La Crosse, & Marquette. It is then loaded on barges and sent to the gulf for export shipment. But that is only small part of the total corn shipment - The rest goes via truck for livestock feed or to the ethanol plant. The ‘haul’ to the river trans-load ports is too short to compete and make money on. Now if you are 200+ miles from the trans-load, then rail transport works.
At least the railroad does get to haul the ethanol and DDG(I can just see the howling if there were non-stop tanker trucks of ethanol going through all of our towns).
The fact is that Franken is just another celebrity turned politician looking for something to get air time about. First we had wrestler Jesse Ventura,as Governor - Now Comic Al Franken as Senator. I liked them both better on TV - I could just turn off the TV and go to bed!
Jim
I used to find Al Franken very amusing, but he began to lose me when he did an SNL comedy sketch (with partner Tom Davis) making fun of a victim of brain cancer.
Hilarious, Al, just hilarious.
The same “open access” nonsense, just packaged a little better.
I wonder if those farmers/ranchers in Minnesota would be upset if I brought some of our Longhorns up there and turned them loose in their back 40?
I mean, under this type of argument, it should be a great way to create competition, thus benefiting everyone, right?
[banghead]
Maybe, I misunderstand the situation, but in these days and times, I am totally suspicious of anything a politician says. Generally, they have gerrymandered information (or ‘facts’ to suit THEIR argument.
You have to wonder if Sen. Franken (D) (nee: Stewart Smalley) is using the term ‘station’ to reference a total community (or in fact a ‘building’) ? Many stations that were shared, were generally, to service rail passenger operations (sharing a passenger station was a general convenience for a community, and the rail’s connections. Each railroad would then have its seperate maintainence facility and (or yard).
Freight railroads did not generally share the
Yikes! Al Franken’s “Freight Rail Monopoly Problem” sounds like one of the darkest clouds on U.S. railroading’s horizon in a long time. Now we know why railroads run those green “save the planet commercials.” So long, deregulation.
Franken is not talking about open access. He is talking about government controlling prices to create his vision of competition.
I activated the link and thought Franken’s pitch to Obama worthy to quote here:
Dear Mr. President,
I am writing you about a matter of great importance to the economy of my state and the nation: the freight railroad monopoly power over customers that must use a freight railroad for transportation. There are several ongoing executive branch activities regarding our transportation system, and I respectfully request that you direct them to consider the railroad monopoly problem in their proceedings.
You mentioned in your Inaugural Address the importance of railroads, highways, and other infrastructure to the strength of our national economy. I agree. But to really serve our nation, that infrastructure must be available to all prospective users on a competitive basis, and unfortunately that is not currently happening. Recent analysis indicates that 7
Always amazes me that so-called free market types oppose competition in the market. A better analogy would be how would you like it if there were only one food store chain within 25 miles of your residence and they charged 25% more than the closest competitor?
If the area could support a second store, they would compete with each other and prices would come down. If the demand cannot support a second store because the market is relatively small, the one store has to charge higher than average prices due to the smaller market. It is your choice whether to live there. If Franken forces your store to lower prices, the store owner might decide to close because the relatively small market will not support Franken’s idea of fair pricing. Then Franken will have to put in a store subsidized by everyone who does not live there.
You obfuscate to avoid the essentials. Railroads are similar to utilities; essentially monopoliies in many cases because of geography and years of mergers. Utilities were forced to permit open access to various suppliers of the electricity or natural gas, relying on the local company for distribution. Result? Utilities prosper and the consumer gets lower prices by allowing a free market. Why should the rails be immune, especially post-Staggers and after 40 years of consolidation?
So then what would be a practical solution to Franken’s “freight rail monopoly problem”? The fundamental objection to the status quo is that prices are too high. How do you fix that in a practical sense?
Most stations, and the customers located at those stations, have always only had single line service. Even at stations that may have had more than one railroad going through (station in this case would probably be better described as a town. city or an area of a city instead of a building or facility) the area a specific customer, unless open to reciprocal switching, would only be serviced by the railroad it was located on.
I would guess Franken is thinking more along the lines of rate regulation instead of open access. While he talks about the majority of customers being “captive,” I also would guess the only ones he’s really concerned about are a few major customers. The kind that can contribute large amounts of “free speech” to his campaign funds. Also the kind that CSX’s CEO once observed have more monoply power in their respective industries than the railroads do.
Jeff
Yes, that is my take on what Franken is proposing. He cites limited access as resulting in unfair pricing, but his remedy is not to open up access. His remedy is to control pricing.
Sam,
Where do I “assign him credibility?” Another poster asked what is Senator Franken’s point. I provided the quotation to illustrate in his own words that point. And I explicitly made no political comment about it. As far as I am concerned you are free to express your own position.
John
Maybe he wants any railroad to be able to operate any train on any other railroad line?
Boyd wrote the following post at 03-01-2013 5:57 PM:
Maybe he wants any railroad to be able to operate any train on any other railroad line?
Maybe so, but how do you convince private railroad company “A” to allow their competition to run trains on the tracks of company “A” and undercut the pricing of company “A” ?
The open access thing is already being hammered away at by others. STB is looking at bottleneck rates. [:(]
Come on, we are all geezers here with long memories. The railroads were falling appart and shedding customers till the Staggers act passed and the were deregulated on pricing and service. Why go back?
Sen Franken does not offer any specific case of abuse, where as several have pointed out a truck can come to any loading dock.
Don’t forget railroads and their customers have alway been kind of a team competing in the national and global market, much like an auto company and their closely tied vendors. If, say BNSF decides to screw over the grain elevators that are captive they would lose international sales to Canadian grain and CN/CP. The best run railroads always knew this and were always looking for a way to make a profit on lower rates. One of the reasons for the ICC was to stop such companys from under cutting existing rate structures. Staggers let them do it.
Because Franken likes to tax and regulate, and always looks for a pretext to do so.
On a ‘constant dollar’ basis - What were the grain rates in the pre-Staggers era and what are they today?
I suspect, today’s ‘monopoly’ rates are signifigantly less than they were in the ‘regulated’ pre-Staggers era.