If this has been debated before then please just paste in the previous thread links…if not…then let’s talk about it !!
Should track, and associated infrastructure be operated by companies seperate from the train/RR operators?? What would be the advantages? Disadvantages? Would this create new efficiencies? Better profits? Since multiple RR operators share common track would it increase competition? Would the increase in competition (a) weed out the dead wood, (b) lower customer prices, (c) increase rail traffic, (d) grab market share from the tractor-trailor trucking sector?..etc.etc??
Sure this will create new “issue”, “challenges”, and a few “growing pains” but will the new benefits outweigh the pain?
“Should” is a subjective argument. “Can” such a system work? Yes.
Better for shippers? Yes, if it results in all rail shippers having a chance for head to head rail services competition.
Better for the railroads? That’s the big can of worms. One thing is clear though, if railroads no longer have captive customers, all subsequent rates are competitive rates, and as such overall revenues may decline. Therefore, any action that results in de facto railroad competition needs to be ameliorated so that reduced profit margins are made up for with larger market share and reduced fixed costs, many of which are easily mitigated by government action regarding how railroads are currently regulated.
Now if structural separation is accompanied by governmental aid that has the effect of “equalizing” railroad ROW with the ROW’s of other transportation modes, then yes it would be better for the railroad industry. This “equaliztion” could be comprised of:
ROW property tax exemption. Such taxes vary with state and counties, but railroads pay roughly from $1000 to $1500 per mile of track per year.
Access to funds from federal fuel taxes, aka an “Intermodal Trust Fund” nee the Highway Trust Fund. This action would recognize the ability of railroad transporters to take trucks off the highways (at 50 ton/miles per gallon of fuel) to the rails (at 600 ton/miles per gallon of fuel), e.g. there is a net national benefit that justifies the utilization of road taxes. All that is needed is for the monopoly to be eliminated, so that we’re not doing the unthinkable aka subsidizing a price gouging monopoly.
The maintenance tax credit. Right now, shortlines and regional railroads have utilized this tax credit to perform badly needed track upgrades. Making such a tax credit comprehensive for open access rail lines makes sense.
No, look at the mess we have in the UK after the government (Conservative at that time) privatised the railways horizontally. Railtrack (owner of the track) was forced into liquidation by the government (by this time Labour) and sort of re-nationalised. In my area the TOC (train operating company) was Connex (a French company) who had their franchise terminated by the government and was subsequently re-nationalised and is now called SouthEast Trains. Next year it will be re-privatised and will be called Southern - at least it’s good business for the paint and vinyl manufacturers!!
Compare this to what they did in Japan where the government privatised the railways vertically - the country was divided regionally and each regional railway company owns it’s track, stations, rolling stock etc. Each regional company competes with a number of private railway companies (mostly passenger railways), the airlines and bus companies.
In principle, I feel a better case can be made for vertical integration, such as in Japan (as Folkestonekeith has pointed out). This of course needs careful regulation to avoid a monopoly situation (and a poor level of service) in a given area. A railroad company knows its own locale best, so is probably in a better position to decide the level of infrastructure provision and maintenance required.
From a passenger perspective vertical integration is desireable, from a freight perspective perhaps less so. In Japan the amount of freight moved by rail is small and has been declining. Of course because of the small size of the country that is not a big problem.
I am making an assumption that an introduction of competitive rail rates and services into every area would result in a substantial increase in the rail industry’s share of intercity freight. If that is the case, a single track OA line just about anywhere would run the risk of becoming congested rather quickly. So there would have to be new capacity built in all corridors to allow for two or three sets of tracks. Thus, from a perspective of total trackage built, it’s a wash regarding OA vs Triopoly.
The advantage of OA in terms of market share is that current non-rail entities could form their own rail transportation divisions, which would increase rail’s freight market share more so than closed access triopoly.
Can you imagine the disasters we would have if that happened!!!
Think of the lack of communication there would be between the companies owning the track and those using the track and the problems that would arise when trying to report damaged track. Also there would be nothing to stimulate upgrading or repairs on trackage that was not near tracks owned by a competing company. Shortline railroads would suffer and be put out of business while the companies owning the track fought for the business of the Class 1 railroads. I can imagine nothing worse for the railroad industry than having the tracks be owned by companies other than the railroads operating them.
I think new ROW construction is a separate issue from the separation of track ownership/train ops.
My knee-jerk response to separate ops has been that if David Gunn (ex-Amtrak prez) says it’s bad, then it’s bad. The mitigating measures suggested by futuremodal on the 31st were very intriguing - appreciate the thoughts.
Long-term, how would OA fit into the strategic development of US transportation? How would it change the face of railroading as we know it today? Right now new ROW is built to areas that supply bulk commodity (coal) revenue. In what situation would new ROW be built over any distance in an urban or even suburban area? It seems that a serious energy crunch would have to happen to get the government behind the very capital-intensive idea of building new ROW to save money or congestion to ship products. I’m sure that energy crunch is on the way, but I’m betting that governmental focus will remain on ways to make highways work more efficiently.
If there is to be a role for OA in America’s urban areas in the next 20-30 years, I would like to see intensive study and development of public transportation. Moving people, not freight, should be the focus of this effort. The cost of traffic congestion on worker productivity is not something that should be tolerated indefinitely. Technologically equipped trains can and do allow people to remain productive on their commutes. The government should give people a reason to get out of their cars and onto a train. PDO
Thanks…as far as I am concerned this thread is ‘closed’…I’m gonna go and read the OAT, no sense in having another thread when the OAT already exists, and at first glance seems to have convered a lot already. [:)]
I think that the opposition to spliting the track from operations , not just setting up a paper NE corridor RR for bookeeping purposes, was at the root of David Gunn’s problem with his Board Chair and the administration. This administration is obsessed with this model, as was the UK, and will do most anytthing to put it in place in the next few years.
Over 10 years ago, the German Federal Railroad (DB) was pseudo-privatized, meaning that it is run as a public corporation (actually more like a holding company), but owned 100% by the government. The company was split into 3 divisions: passenger, freight and ROW/Infrastructure (DB Netz). Supposedly, DB Netz was to maintain ROW and provide dispatching services to any railroad willing to pay for use. Politicians heralded this as the eve of a new age of railroading.
It has taken these ten years for private freight companies to actually break into the market as serious competitors to DB Cargo/Railion.
It seems as though these companies are up against great odds, however. As an example, I recently took a trip to the Bavarian Alps. About 1/3 of the trip was with a private passenger carrier called Euro-Thurbo. While service was better than with the former DB, my train ran late because the DB-Netz dispatcher gave “his” trains priority. This is a daily occurence in a supposedly OA network.
At the same time, DB Netz spins off supposedly unprofitable ROWs to private investors, meaning a number of small, privately owned railroads are now able to exist, but they offer their services to “captive” customers, I don’t think that there is a good way to provide OA in the US, and I would consider it a catastrophe for the rail industry, were the federal government to manage the US rail network. Forcing individual railroads to open up their track to competition would just result in the same kinds of delays I’ve experienced here in Germany (or with Amtrack outside of their corridors). I don’t think that there is an easy way to solve the problem, except for the government to provide financial subsidies or tax exemptions to the railroads to create parity with highway and air competition.