the only comment i can add is that open access is being developed in a number of european
countries. all of these countries are small by comparison than u.s.a. in fact, most would compare
in size to large and small states in america. they also are backgrounded in a national railway
system with a few localized so-called private lines, often in fact operated by a regional political
entity. i haven’ t the faintest notion how well open access is working in european countries. i’m
not sure their experience can offer any guidance in the u.s., their previous operation is so vastly
different and they have sophisticated and heavily scheduled passenger systems which are
moving quickly to high-speed operation even in sleepy countries as spain. the private passenger
system in sweden, lynx, i’m told is on the verge of collapse–correct me if you jave better information.
how open access freight railroading would function could result in chaos or orderly operation.
theo sommerkamp crosstie@wowway.com
Re: “Lower” Rates. Rates might not go down. What they would tend to do is reflect something closer to their true cost of service, especially where there was active competition. The rate structure futuremodal mentions would likely get evened out. Even on a little used branchline, a local independent who can afford to buy himself a suitable locomotive would provide some level of competition. For that matter, a captive industry could choose to provide their own service to the nearest or otherwise most logical “interchange” point. And because the lines are all open access, that one locomotive wouldn’t be captive on its branch - it could wander around an area servicing several such branches.
Would these “anyone who could buy a used locomotive” types skimp on safety? Could one enter the business, skim of some cream, and then leave before caught with safety violations? How much tax money will be required for policing this sort of thing? Are we going to have scales all over the place to make sure the track structure isn’t overloaded by people overloading freight cars? Is the service going to be excellent when one service provider gets a shippers car from siding to siding but absolutely rotton when two service providers have to interchange? Will any derailment become a finger-pointing excecise between the track structure owner and the service provider owning the rolling stock and thus the line tied up for months until a court decides the issue?
Yes!
Yes!
Lots
You’d have to – look at trucking
Probably
No doubt. and the Lawyers will have a field day.
A few other unanswered questions:
Where would the cash come from to purchase the rights of way? Railroading already has a relatively poor return on investment so why would private investors invest in a right of way company.
Who would set operating standards for operating companies and how would they be policed and enforced? The FAA has analogous standards for start-up airlines.
How would terminal operations such as Chicago, Kansas City, New York/New Jersey area, etc. be established and operated?
So far I’m seeing a lot of wishful thinking and theorizing but not too many real world responses.
CSSHEGEWISCH,
Since the concept of an open access system “laid” over an existing proprietary rail network has not been done anywhere in the world, it is still a theoretical concept and therefore discussions of such will employ theorization. One can only use the open access systems of other nations as a template, and then use economic theory and our ability to think abstractly and constructively to discern that such a system would work here. Just because an idea is untried does not make it invalid.
To answer your questions more specifically,
- if open access came in the form of a split of the current rail networks into infrastructure and operations, there would be no purchase required. If there is a need for new rail lines (something that is already apparent today), the “best” option in terms of “fairness” across modes is for new rai lines to be funded out of an infrastructure trust fund, supplemented by a tax credit similar to the recent shortline ROW tax credit. With these two aids, it is possible for private investment in rail infrastructure, if you approach it as a regulated utility with the “safe harbor” low risk but low yield ROI’s. Most portfolio managers will advise investors to have a diversified portfolio inclusive of both low retu
If operations and right of way are to be divided into separate entities, where is the statutory authority required to accompli***his?
Asking local government to provide the terminal facilities is unrealistic since they barely have enough money to finance their current services. Although the Port Authority of New York and New Jersey operates the PATH subway and has financed MU cars for the Long Island, they may not be willing to provide the complete infrastructure for all raial operations in the New York metro area.
That law hasn’t been passed yet… Remember, we’re in the conceptual stage.
Depends a lot on what “local terminal facilities” are. Current trackage? More than a few municipalities have picked up track that was going to be abandoned, if for no other reason than to prevent a local industry from leaving town. If they can charge for the use of the facility (which most airports do), then it’s not the money pit it could be, and they can often balance the cost with the income that’s derived from property and sales taxes generated by the business served by the rails. It’s not a cash cow, either, so don’t expect a lot of “get rich quick” types to be picking up these little branches.
Would a municipality build an intermodal terminal? I believe stuff like that has happened before…
As far as terminal operations go, it depends on the customer using the containers and where it is. To avoid competition and create efficient movement, intermodal containers can be loaded up and the loads be divided in a way so that they go out at different times. To explain myself better forexample, Via and Amtrak operate between Toronto and Niagara Falls, Ontario. They don’t go at the same time though. VIA heads to Toronto at 7:07am EST, then an Amtrak from yesterday heads to Niagara Falls at 11:15am, then another Amtrak heads to Toronto at 6:30pm and the VIA returns at 7:15pm.
Same kind of thing can happen for the intermodal trains. For New York to Chicago forexample, CSX has a South Kearny to Chicago train at 7:00am then a NS has a South Kearny to Chicago train at 8:00am, CN at 9:00, CSX at 10am, CP at 11am etc.
Now for places like Chicago and New York area where several railroads have their own yards, the staging can be from their own yards but their loads could be picked up whenever as containers always arriving from somewhere land or sea, and the loaded are picked up by local switchers from whatever railroad and delivered to their own yard. CSX picks up or drops off whatever is available at 5am, 7am, 12pm; CN at other times, CP at other times but ne
I noticed something interesting in MWH’s April 2005 column “Investors aren’t public servants”. He states, “If we don’t like this type of hardball railroading” (refering to monopolistic pricing practices of railroads in general and CN in particular) “, then we must head to the polls and demand the federalization of railroads, or at least purchase the track and pay for the repairs ourselves.”
Could it be that the armour of anti-open access is starting to crack? He makes the argument, perhaps inadvertently, that the public response to monopolistic railroad practices should be a takeover of the infrastructure. This sounds like a subtle approval of the open acces arguments made by rail shippers. Of course, he leaves out the option of the vertical corporate split of rail companies (with infrastructure co. becoming a regulated and perhaps public/private utiltiy, and transporter operations given unregulated freedom to roam the nation’s rail grid where ever it pleases them), but since this article remark comes from the “Rail management is infallable / rail shippers are ignorant greedy SOB’s” clique of Hemphill/Kaufman/ et al, it is rather remarkable.
Because of the very real and forseeable problems that would arrive with the open access implemented, and so far there are zero answers to the down-to-earth problems I and others have stated, I think general open access is a very, very bad idea indeed. Just as bad as driving Amtrak into banckrupcy and hoping something out of thin air will emerge that is better. Just as plain stupid, in my opinion.
HOWEVER!!! That does not rule out open access completely. Indeed, open access in a limited way is what Conrail Shared Assetts is about. And there may be specific situations, possibly even the Houston Chemical area trackage or similar situations, where the local industries can raise the capital, buy the trackage from the current owners, and establish a switching district that can be accessed by every railroad abutting the district, either by its own trackage or trackage rights. If this system works in small area, then some of the problems I mentioned might be worked-out practically, and with that experience, it might be possible to extend the concept to larger areas, and again if practical solutions to the problems are found, eventually the railroad system could become open access. But until their practical solutions to the very practical problems I and others on this thread have seen, a general open access would be a very bad idea indeed. Penn Central merger and UP meltdown ten times worse!
I have fallen in with the Hemphill/Kaufman/etal. clique because they look for practical answers to practical problems. “Open Access” has often been used as a cover for looking for a better rate, usually by utilities who are constrained by the fact that they can’t shut down their business and move somewhere else.
As daveklepper has noted in the above post, a variation of open access already exists in terminal areas with operations such as Conrail Shared Assets, BRC, PTRA, and various other joint terminal operations. Most of them exist for practical operational reasons, not by regulatory order in order to foster competition. Because of this, I don’t think that the success or failure of open access can be extrapolated from these examples.
Open Access sounds good on paper, but I think that it would create more problems than it would solve.
Isn’t there something to be said for good old private property? Like in owning your own home? Has been one of the underpinnings of a general stability through time.
Sometimes sharing space/property is better than sole ownership/consolidation.
Look at owning your own home versus a condo and compare the likeness to open access (my version). If you look at condos, mulitple people can live in the same building and share the costs. Sole ownership means you pay for and maintain everything on your own.
An alliance of rail users for 1 line is a great way of conserving money and sharing the costs. Keep in mind; I am a firm believer in only licenced rail entities should be allowed to use that kind of line (ie shortlines, industries-short distance switching (steel mills-blast furnace to slag dump), class 1s, passenger/ commuter ).
Bad analogy by Junctionfan. In a condominium, the owner owns his individual unit, which is not shared by anyone else and for which he alone is responsible, and has a fractional share in the common areas, which are administered by the building association. The closest analogy to the common areas would be the jointly owned terminal railroad, such as BRC, with the individual units being comparable to BRC’s six owner roads.
It is not logical to compare private property ownership of a home or brick and mortar business with the private property ownership of transportation infrastructure. It is precisely the proprietary owner-operator setup of the nation’s rail network that is causing problems for U.S. shippers relative to their foreign counterparts. All transportation corridors in the U.S. sans the rail network are publicly owned open access corridors. Because the proprietary rail ownership causes higher rates and less incentive for innovation than would otherwise occur under an open access system, it is forcing more companies to either shift to trucks, move overseas, or shut down all together. Added to that is the reality that many proposals for new production and manufacturing facilities in the U.S. stay mothballed because these investors don’t want to put up with the hassles of monopolistic pricing practices. What logical industrial investor would want to deal with the rail oligarchy today?
Rather than creating more problems than it sovles, the body of evidence regarding the state of U.S. manufacturing and production, and the needlessly higher shipping costs for U.S. firms relative to overseas firms, it is axiomatic that some kind of open access rail system in the U.S. would solve a whole slew of problems. You need to look at these things from the perspective of what’s good for the nation as a whole (and by inclusion the future of the rail industry), not just what’s ostensibly good for the current rail oligarchy. As has been stated before, the pool of captive rail shippers can only shrink over time because only a fool would construct a new industrial plant with access to only one Class I, and since the merger option has been pretty well maxed, what other options does the rail industry have for improving ROI’s?
Maybe I’m just on a different page. I look at a supermarket. It’s privately owned. The population of a good-sized city walks through its doors each week. Almost all of what it offers is available elsewhere through internet ordering. It’s got to serve its customers to make itself successful. What is it about a railroad that is so much different? How long does a “customer” have to exist to be deemed “captive”?
Here’s a solution. Tax all railroad proerty and fuel and labor out of existence. Then the govenrment (local, county, state ,federal, take you pick) can mop up the unused rights of way for a song. (we won’t discuss inverse condemnation here). Then with all the relatively flat and fairly wide rights of way, roadways can be constructed and restricted to only trucks. Extra long combination vehicles can be accomodated on these highways thus freeing the interstates for the passenger autos. These former rail routes serve industries directly, and old railyards can be paved into transfer areas, where the long combination vehicles can be split into single vehicles for local deliveries. Jurisdiction of these new roads will be under the FHWA just like any other highway.
Now you have most of the trucks off the interstates, Ma & Pa shippers would have access to anyone with a tractor. and the rates MUST go down, as there would be hundreds of people aggressively seeking everyone’s business.
Judging by what has happened to Amtrak funding, and again, I believe that long distance cruise trains like the Capitol Limited, the Sunset, and the CZ are essential for an important if small segment of the American people, can we just imagene how the infrastructure would be maintained if the Government owned the right of ways for open access?
The market for constructing and/or closing supermarkets is elastic. New stores are popping up all the time, and at the same time other stores are closing. It is the epitome of the free market.
The market for constructing and/or closing railroads is inelastic. It is nearly impossible, both financially and jurisdictionally, to construct new railroads. It is up to the discretion of the STB if an owner can close a railroad. Because of this inelasticity, the few remaining owners of railroads can extract monopolistic pricing practices unavailable to other markets, including other transportation modes. That makes shippers who otherwise are logical rail shippers captive to that particular mode if they want to be competitive with other like businesses. When railroads raise rates by triple digits or cut back on service to logical rail shippers, it causes an unnatural shift in economic variables to less than perferable alternatives (from the standpoint of national interests). If the preferable alternatives are a shift to less economical transportation modes, shut down, and/or a move overseas, then clearly it ends up hurting the U.S. economy and contributing to the imbalance of trade.
I’ve said it before and I’ll say it again. There are better alternatives for curing the railroad ROI problem than to allow monopolistic retrenchment of the industry. Taking the sole responsibility of infrastructure costs away from the rail service providers and fostering that cost onto the public in some wa