Ever since I was old enough to memorize any old tale told me in grammar school like an obediant parrot, I was programmed to accept that railroads were the unmovable keystone essential to the foundation of the country’s economy. Recently someone posed the Forum an important question; Are Railroads Essential To A Strong Economy? Wind the time tape back to my grammar school lesson…maybe it was not as essential as critically assumed…an interesting revisionist history. It’s particularly ironic to this writer where this tome originated in light of the expansionist dreams of the DM&E…and the shrinking of a traffic base to coal and intermodal…as currently profitable as they are…more prone to the geopolitics of NAFTA…more than the past base of manufacturing and raw materials, passengers all ecompassed in regional dynamics…seems quaint now…a sense of nostalgia tinged with a brave new world.
Can two legs allowing upright movement share the same achille’s heel? Energy Dependence and Foreign manufacturing…held together with a lopsided balance of trade financed by credit…will there be a convergence of market forces? Stay tuned for our next episode of Humpty Dumpty and The All You Can Eat Buffet…
I remember reading an Illinois speech of Lincoln’s where he pointed out that the railroad made possible year-round transportation. Rivers would freeze up in winter, so there was little overland transport. monopoly, schonopoly.
I would say the blooming of the shipping container, and what it’s made possible would be the transportation technology that has caused an upheaval in our time. And its full potential has yet to be tapped.
How much does it cost to create a research document like the Nafta EPI production? Maybe these are the “jobs” that are a detriment to the US economy. How do you spell “level of abstraction”?
All I think I know is what I was told to recite like a parrot in skool with an occasional peanut thrown in to encourage more orginal thinking which may or may not fit with the approved teacher’s lesson plan for the day.
Congress says we need clean coal. All the trains went to Wyoming to get it. Theres not enough to go around. So I pay more for Natural gas or imported electricity to my house. I see coal trains running down the track at 65 mph with lots of power in dirty engines which apparently dont sit long enough to be washed.
I say the railroads run after what dollar they see floating in the distance.
20 years ago they had this magic load called a container. Suddenly all they have to do is run boxes back and forth to feed the growing Chinese Manufactoring base. What happens when China gets to a point that they take care of thier own and no longer needs our dollar?
I say the railroads have forgotten how to make new futures for themselves.
We had a network where you can go to any railroad station in the USA and ship yourself, your mail and your stuff anywhere in the Nation within a few days. That was a long time ago. Now we have this shiny thing called spendtrack who are told to go forth and provide Passenger Service for the USA. The Amtrack is then sent to starve on what little funds they can get from our Dear Uncle Sam. Little wonder as it is cheaper to fly and easier to drive the trip yourself.
I say the railroads are afraid to build many regional Northeast Corridors around the USA.
Finally my parting shot is the railroad does not want to be liable for anything they do, they have stacks of locomotives painted and owned by someone else, seeking to put robots on the mainline, closing towers and retiring small lines deemed not profitable and in general eliminate anything that does not provide our Stock Holders a profit.
When the day is done and the market goes home, what is left? A pile of two railroads neither of which can do the job effectively.<
Paradigms or consensus opinion of the majority, as any iconoclast will gladly tell you are (1) subject to “shift” (2) may be based on a projected 'good" rather than facts. The idea that the railroads were a driving economic force in Lincoln’s time, as he believed, may have been more civic boosterism than a hard fact. If they were not the driver, then they were driven by other economic factors. Perhaps, as in 2004, coal represented 21% and intermodal was 14% of the commodities in the majority ( chemicals also ranked high) transported. That is 35% of their traffic base. I suspect the coal and intermodal figures have grown considerably in a FRA pie chart. Intermodal and Coal as a substantial base says the paradigm, is a good thing. Maybe not from an iconoclastic point of view. Perhaps as well these two major sources of income have clay feet politically, perhaps economically and are not sustainable. Foreseeing trends or the inability to see a paradigm shift approaching, can be fatal. Look at a map of the interurban lines that once blanketed the U.S. A huge boom time followed by a total bust. Are other traffic or revenue sources being developed in advance of a decline in current sources? I can think of several as potentials…Railroads are not a driver, they are driven by economic forces…Did the builders of expressways foresee their speeding autos being stopped in huge snarls… a victim of their own success?..What about the now re-escalation of gas prices…A paradigm shift is occurring as I write this…
All I think I know is what I was told to recite like a parrot in skool with an occasional peanut thrown in to encourage more orginal thinking which may or may not fit with the approved teacher’s lesson plan for the day.
Congress says we need clean coal. All the trains went to Wyoming to get it. Theres not enough to go around. So I pay more for Natural gas or imported electricity to my house. I see coal trains running down the track at 65 mph with lots of power in dirty engines which apparently dont sit long enough to be washed.
I say the railroads run after what dollar they see floating in the distance.
20 years ago they had this magic load called a container. Suddenly all they have to do is run boxes back and forth to feed the growing Chinese Manufactoring base. What happens when China gets to a point that they take care of thier own and no longer needs our dollar?
I say the railroads have forgotten how to make new futures for themselves.
We had a network where you can go to any railroad station in the USA and ship yourself, your mail and your stuff anywhere in the Nation within a few days. That was a long time ago. Now we have this shiny thing called spendtrack who are told to go forth and provide Passenger Service for the USA. The Amtrack is then sent to starve on what little funds they can get from our Dear Uncle Sam. Little wonder as it is cheaper to fly and easier to drive the trip yourself.
I say the railroads are afraid to build many regional Northeast Corridors around the USA.
Finally my parting shot is the railroad does not want to be liable for anything they do, they have stacks of locomotives painted and owned by someone else, seeking to put robots on the mainline, closing towers and retiring small lines deemed not profitable and in general eliminate anything that does not provide our Stock Holders a profit.
When the day is done and the market goes home, what is left? A pile of two railroads neither of which
If not for domestic coal, all the railroads would’ve gone under by now no matter how much import intermodal they go out of their way to haul. The imports simply aren’t paying their way, yet all the attention and focus seems to be on increasing intermodal capacity.
Without coal, all the railroads would’ve gone Conrail on us by now- they’d all have been lumped into one publicly owned taxpayer-bailed-out megacorp called USARail or something to that effect. And since this quasi-government agency would’ve had it’s management stocked with ex-Class I railroaders, it’d still be an integrated entity in spite of what’s going on in Europe and Australia.
Then again, I guess it’s hard to blame all the the failures on railroad management, when the feds are the ones that have made it extremely difficult if not impossible for startup companies to enter the rail transportation fray.
People complain that we haven’t built a refinery in 25 years due to federal regs. Well, we haven’t built a new Class I in nearly 100 years!
So much easier to buy a bunch of trucks, wine and dine Walmart Corperate and BINGO an account good across the entire USA with drop and hook permission or call up JB Hunt with thier 14,000 trucks and have it shipped. (By rail too if need be)
I have a feeling I know what the next railroad is going to be. UPS Brown.
Then we would have gone full circle from the Pony Express to Stagecoach and back again.
Geopolitics, the ecomomy and railroads…Wonder why our President is in South America?..seems abit odd…China is the answer.
" China’s recent overtures in Latin America thus represent the new importance with which Beijing views the region. Trade, diplomacy, energy, and geopolitics all figure heavily in China’s attempts to extend its influence in the western hemisphere. On occasion, the lack of a strong U.S. presence has aided Beijing’s efforts."
Who is Iran’s financial backer? Bypass the U.S economy…do an end run…in South America? The back story…China…source of intermodal…connect the dots…daunting…who is steering this car? Develop new trading investment partners…put the squeeze where we are vulnerable long term…militarily we are superior…for now…A railroad dependance on coal and intermodal is a risky bet without any hedging…
Railroad Challenges
From report:
Many of North America’s major railroads now face significant challenges even to maintaining their current position (Exhibit 4):
Revenue growth for the industry as a whole has been flat to declining over the last 20 years (on a constant dollar basis), despite a tripling in the the intercity freight market in revenue terms.
Commercial pressures to reduce rates have resulted in revenue yields declining significantly in real terms.
Return on assets (measured as rail cost of capital) while improving, remains far below acceptable levels.