Railroads Struggle to Deliver Coal to Utilities

You say that Dave said essentially this:

“Railroads were abandoning track because they were shortsighted and not following trends, and – because they were monopolies – they could get away with it.”

How are there two “sides” to that statement? Without agreeing or disagreeing with the substance, the two thoughts appear consistent. I’m not certain you could say one without saying the other.

Once again, the “baloney meter” is pegged off the scale. I think FM & Co. disconnected the wires and just left it there. The concept of real world marketplace pressure in a freemarket economy is ignored. [V][V][V]

PS- Michael Sol: Grenville Dodge, Ted Judah, AA Robinson, Bill Palmer & company had it right. When the construction engineers and the real railroaders lost control of the railroads to the operating management clowns (MBA’s, Business Administration grads and the related Wall Street Trash/ Fa$t Buck Artist$), they rolled over in their graves. They’ve gotta be wondering how far an engineering enterprise can be dragged off course before it recovers. (Should have shot Durant on the spot to get the point accross when they had the chance)

Maybe this will help DME get past it’s Mayo roadblock. But wait we need the clinic more than PRB coal to have another line. NOT. Power companies might help relocate either DME or MAYO but I’m not holding my breath.

So your asking me to predict what rail management will stumble into 10 or 20 years from now? We don’t even know what the outcome of pending legislation in Congress will be. Where will new coal fired plants be located? Or will anti-coal politicians sweep into office in the next few elections?

And most of such lines are already condos and bike paths, aka most of the lopping took placel in the last two decades. Is there anything left to cut?

But since you asked, I’ll give it a start. Keep in mind these are lines that should be saved, and I’m not predicting that they will saved (in fact, the good money is on further retrenchment). Sticking with the PNW -

UP Pocatello to Silver Bow and BNSF Great Falls to Helena -

Once part of the vital I-15 rail corridor, traffic on the UP was relegated to

The auto industry.

Yes you can. If the railroads knew that they were monopolies, and abandoning track would make them a stonger monopoly, then they were not being shortsided, but brilliant. That is what my point was. Do I think they were shortsided, yes. However it is very easy to sit back 20 years later and tell people how stupid there actions were.

Bert

Nope, you’re thinking of a few specific companies like GM or Ford, but not the aggregate industry as a whole, which continues to add assets.

GM and Ford aren’t shutting those plants to extract more pricing power, they’re rather on the losing end of the intra-industry competitive battle, e.g. losing market share to other auto makers, subsequently closing their plants while others open new ones. Toyota, Nissan, Lexus, et al are not lopping off assets, are they?

Mudchicken - what was your college degree? Or did you have one?

Stick to what you know - rotten ties, rusty spikes, and weedy ballast. Leave the economics to those who have the degree.

You’ve got an interesting logic. The proposition was that it was shortsighted. They got away with it because they were monopolies – which can get away with short-sighted actions because there is no alternative. You may disagree that it was shortsighted, but the logic of the statement is consistent. Your question was not.

Railroads take in about 15 cents of every dollar spent on inter-city freight transportation dollar spent on the U. S. That is a long way from a monoply except for a Beltway Bandit selling his cause to Congress.

Dave - Are you starting to feel lonely? Suggest you knock off the childish coments if you want anyone to even read your posts.

Methinks that these are the rantings of an intellectual snob.

Dave, whenever you turn your ears off to what others have to say, especially those who disagree with you, you have closed your mind and have decided that you have nothing more to learn.

A mind is like an umbrella, it only functions when it is open.

Well, you kind of just proved my point there buckwheat.[;)] You’re saying that someone with your economic pedigree can’t predict the future, because of some uncertainties? [;)] Come on- you chide the railroads, after the fact, for not doing it.[:-,] Wouldn’t you think the view was just a little bit fuzzier in the crystal ball 20-25 years ago? And they had to do it without your intellectual insight.[:p]

Paul, we could easily ask him the same thing. Look at his profile and you’ll find out his name is “Dave.” Nothing else there.

To bring up another old saying, people who live in glass houses shouldn’t throw stones.

I think YOU missed the point there spanky. Railroads have emasculated themselves with the belief that certain lines were “excess capacity”, yet they have no crystal ball in determining that those lines actually were excess in the railroad’s long term planning (which goes out on a limb in assuming they do engage in long term planning!). Why would you lop off body parts if you did not know for sure that you absolutely would not need them anymore? The cost of keeping an asset is much less than the cost of having to rebuild such an asset from scratch.

Again, I ask you, do you know of any other industry that engages in asset reduction as a part of their long term business strategy? Or do I have to explain “asset” to you?

Tom,

My college degree is in economics.

What’s yours?

United States Steel closed and demolished the South Works because it was excess capacity and had already been idle for several years. The same applies for several other now-gone mills in the Calumet Region and elsewhere. Should management have retained these assets against the day that demand for steel would rise?

Holding onto idle unproductive assets will not sit too well with shareholders in this day and age and this is a factor that management has to keep in mind whether they like it or not. This may not sit well with Dave’s economic theories but it is the real world.

Hello, I have t o let my “wisdom” out on this one.
Today the railroads are geared towards Wall street and profit only. But this is not the most important thing for a rail road. I think the rail road has to invest in it self to keep up with the assets they own. Because once it has deteriated to a point of no return. or ripped out, it is gone and will cost an exesive amount to bring back. It is almost like a farmer that you have to plant your seeds bevor you can harvest. Yes it takes time to do that. Today time does not exist anymore in busines. To bad. So for a rail road it would mean to spend more money on infrastructure than shares. Keep excessive capacity as long as possible because if a service is there a customer will come. Reintroduce or keep, should have kept, capacity and the coal or other goods will be able to flow.
Georg

[quote]
QUOTE: Originally posted by futuremodal

I think YOU missed the point there spanky. Railroads have emasculated themselves with the belief that certain lines were “excess capacity”, yet they have no crystal ball in determining that those lines actually were excess in the railroad’s long term planning (which goes out on a limb in assuming they do engage in long term planning!). Why would you lop off body parts if you did not know for sure that you absolutely would not need them anymore? The cost of keeping an asset is much less than the cost of having to rebuild such an asset from scratch.

Again, I ask you, do you know of any other industry that engages in asset reduction as a part of their long term business strategy?

Why isn’t that on your profile?

Are you ashamed of it?