MichaelSol: If I understand what you’re saying,you think that dieselization was not a move in the right direction for railroads, based on costs in the 1940’s and 1950’s. Wouldn’t that equation have changed, as labor costs per man/hour increased? This brings me to this question: If steam is such a bargain, compared to diesel, why did the Chinese, with a big supply of cheap labor available decide to dieselize?
Michael…The “other” factors happening at the time of change over from steam to diesel has to be a reality…but I’m not a professonal railroader so we’ll leave someone with proper expertise to delve into the specifics…We as ordinay fans realize there was all kinds of factors besides the change over taking place and will always be taking place in any given time slot…
State owned railroads pose interesting questions, no doubt. Most of them tended to electrify.
I have no more idea why the Chinese did what they did with their state-owned railroads, or when they did it, or why they did it, than I do why they decided to put a “steel mill in every back yard” during the Great Leap Forward or why they starved 80 million people to death nor do I assume they were the result of rational decision-making processes.
Best regards, Michael Sol
Which explains … what?
Dieselization was the biggest single investment decision ever made by American railroads. And the rates of return declined. Now, if the impact was positive, from this huge investment decision with so many ramifications, and the rates of return still declined, then something enormous must have been happening to more than offset the positive effects of dieselization.
You’d think someone would have noticed something that had more effect on railroads than dieselization, even to drag earnings down to half of what they were, when, it is proposed, earnings should have increased dramatically.
Whatever it was, it must have been really, really something.
But no one knows what it was.
The much-vaunted “bottom line” seems pretty clear as to what happened.
Best regards, Michael Sol
Sir please expand on your information. Dropped form half of what, in what year, this is very intesting let’s hear the specifics.
OK So you’re saying that since this goes against your thought process, it must be incorrect and not worth your consideration. Whatever.
…Michael…The shifting economy, interstate highways and various other realities impacted railroads bottom line…and as I said before…professonal railroaders in management would have to itemize many more situations…The massive east coast area economy was changing and so were the heavy industry haulage previously available to railroads…I’m sure you have heard of the “rust belt” stretching from the mid west to the east…
Very well put Murphy. I think what may be part of the problem with what he is saying is this. Let’s take a look at the broader scope of the dieselization period (1940’s-1950’s). WWII provided a large increase in the traffic for the railroads, no matter what the railroads did, when the war there would be no war traffic. Linked with what I said earlier about the vastly rising number of cars and the dropping passenger trains it is not surprising that profits were down for the railroads. I am not arguing with his facts, but with his conclusion based on the facts. What is the evidence that the diesels caused this loss of revenue, that it wasn’t inevitable?
James, go easy.
Mr. Sol,
Let nobody ever call you a man without vision. Please show some specifics, though.
Sincerely,
Daniel Parks
I am saying that I have no reason to believe a state-owned railway system in a developing country for which I have no data presents anything particularly relevant that I can discuss in a discussion regarding private railroads in a developed country for which we have tons of data.
I have nothing on China, and, notwithstanding your generous invitation to speculate about cheap labor there and its effect on dieselization, I will spare you my completely uninformed diagnosis about what it means since I don’t know, nor do I have a reason to be interested in it because of the paucity of data.
If you know something about China we need to know, by all means don’t be coy.
Best regards, M
I’m open to your idea and find it intriguing, however, I think you are going about your analysis wrong. When you go by the bottom line you include a lot of other factors that may or may not be related to diesel vs. steam. The bottom line also does not tell the whole story as it is just one of many different measures needed to paint a complete picture.
A few questions about your cost of steam vs. diesel per pulling power unit:
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What are you basing your steam loco on? I’m no expert but I’m sure it varied greatly by type.
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If you base it on a “state of the art modern, heavy-haul steam-turbine-electric locomotive” what is the cost of such a unit?
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Why wouldn’t purchasing all new state of the art steam locos put the railroads in the same position as buying new diesels?
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Are you considering the way railroads actually use their equipment? Are you considering all the different duties a locomotive must perform in your analysis and the fact that you need different types of steam locos for each task? The efficiency of each, the total ownership cost of each?
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What about the impact of steam locos on the rails and the cost to repair the damage?
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What is the cost to upgrade branch line rail and bridges to allow the operation of the larger more efficient steam locos?
It would be great if you could post your complete analysis showing how you came up with total ownership cost for each model of steam locomotive and each diesel locomotive and how you allocated the cost of all the support equipment and labor.
The next step would be to pick a sample railroad, a year (say 1945) and determine the freight moves, what equipment would be needed for each and the cost. Compare using only modern equipment (c. 1945) and then again using realistic equipment m
At the beginning of the full-blown process of dieselization, 1945, railroad rates of return on net investment averaged about 4%. By 1960, which can be viewed as the effective close of the dieselization era, the net return was approximately 2%. Then, subsequent generations of new, more expensive equipment were required because of the unexpectedly short economic service life of the diesel-electric locomotive in road service. Even by 1957, railroads were realizing that the depreciation schedules originally adopted on the basis of EMD recommendations were far too optimistic, and the IRS was pursuaded to reduce the depreciation period from 20 to 14 years.
Unfortunately, for the machines in heavy road service, even this did not reflect the reality that new generations of locomotives were necessary on approximately eight year cycles. New financing piled onto existing financing, further eroding profitability. MOW budgets declined to accomodate the need to replace the first and second generations of road diesels.
It was a mess.
Best regards, Michael Sol
Thank you. So how long did the old diesels last compared to the steam engines in their service life?
I don’t think China should be ignored, I think it should be researched, since they kept steam around for so long, maybe they discovered some of what you have been saying and having plenty of coal (compared to oil) waited for a more opportune time to switch to diesels. Of course that is just speculation.
Michael,
A Question: In your modern steam turbine example, is that direct drive aka Pennsy’s S-2 or electric traction aka N & W’s TE-1?
Regarding China’s late dieselization, I will speculate that they used their steam locomotives to their fullest life potential, thus squeezing every penny out of the investment, before switching over to diesels. By that time, there were few if any steam locomotive manufacturers left in the world, while diesel locomotive manufacturers were aplenty. Perhaps if modern steam was still being marketed, they’d have continued with steamers at that time.
But of course this is pure speculation.
“Joe” Stalin believed that railway electrification was necessary to show the world that the Soviet Union was a modern, industrialized country. So, Soviet railways began to electrify. The decision was based on Russian nationalism, not economic analysis. His interesting acknowledgment of Milwaukee Road pioneering technology was, of course, memorialized by the Milwaukee’s “Little Joes.”
State owned railroads generally aren’t as concerned with the “bottom line,” that is, they make decisions which are often based on national interest or national perception rather than ‘rate of return.’ How those decisions might be relevant to American railroad management and the investment decision making process may be interesting, but probably not useful nor even informative without the kind of detailed statistics available, for instance, in Transport Statistics of the United States.
Best regards, Michael Sol
Let me revisit that notion. It’s been a while since I put away my Pickett slide rule and left the chemical engineering field, but, as I now recall, finely crushed coal takes on an almost liquid character, and has identifiable flow characteristics. In the late 1970s, producers were looking seriously at coal slurry pipelines as an alternative to rail transport. Coal may not be that difficult to utilize.
Best regards, Michael Sol
This is easy. They didn’t want to lose face. People see Steam as backwards and China is doing everything under the sun to show that they are NOT backwards people.
They as a society are trying to modernize everything from telecommunication to the military. They saw the steam locomotive as backwards and old fashion, whereas desiel was new and modern.
Great debate guys. Many good poings.
Yes, something enormous did happen at the same time of diesilization. The Interstate Highway System. This was far more enourmous that the dieselization, particularly the diesilization of such already efficient railroads as the Norfolk and Western, which had managed to coax near-diesel economy from its steam locomotive fleet.
The general consensus is, and I agree, that diesilization SAVED most of the railroad lines that are around today. Without diesilization, we would either have a nationalized tax supported money loosing naitonal railroad system or just a few profitable core lines remaining, those with heavy coal traffic and double stack containers.
Just as the economies and decent ride of the GM and Mack diesel buses (as compared both with Birney streetcars and gas buses) saved transit in many of the USA’s smaller cities and larger towns until subsidies on the basis of traffic-congestion relief and economic growth rejuvinated the transit industry and made possible new light rail lines.
That does not, however, in my mind contradict the somewhat predatory nature of GM when they first bought New York Railways in 1926 and helped establish National City Lines in the 1930’s.