100 to 150 years ago people who started out with modest means (like the Big Four, JJ Hill, Gould, and others) were able to build railroads…Alot has been said about buying existing lines, but would building new lines be possible today?
A couple of opportunities that might be worth looking into: Newfoundland & Labrador…NF proper currently has no rail service…and when CN left in 89 NF was a have not province that probably didn’t need a railroad. Today…thanks to the oil industry…NF is a HAVE province…and a railroad linking east and west like the old narrow gauge did might prove profitable. Other areas that are currently not serviced by rail are most parts of New Brunswick (Canada) and Prince Edward Island… The benefit for a new operator might be that the old roadbed is still there on which to build.
Re: “100 to 150 years ago people who started out with modest means (like the Big Four, JJ Hill, Gould, and others) were able to build railroads.”
Today, there are N. Americans of modest means who grew up to become Bill Gates or Jeff Bezos. Rail was the “high-tech” of the late nineteenth century. Not now. All I can say is, if railroading of any kind offered the opportunity for vast wealth (amid a crowd of competition), there would probably be people stepping up today to start or try to run railroads . . . but they’d have to get venture capital . . . which is difficult for a project that does not offer at least some hope of high returns – and that was even before the financial establishment gave us the shaft.
As you say, Newfoundland is a HAVE society so since it has a democractic, stable government, people will probably make the desire known if some latter-day version of the “Newfie Bullet” is re-established or rebuilt. BTW have you forgotten that the ROW in NF was built for narrow gauge? - a.s.
Business is always attracted to low tax states if those states can provide a supply of workers and other logistics. As this recession develops, there is an abundant and growing supply of workers everywhere, and a growing number who are willing to relocate to find work. At this same time, there is also a growing mobility in services provided by workers utilizing the Internet. So with the mobility provided by the web, and the abundance of workers willing and able to go anywhere, business is nimble, or some might say, fluid.
Also, as this recession develops, there is an increasing difference between states with runaway spending and rising deficits, and states that have not grown to the point where they are in the same condition. The states heading further into debt will require higher taxes. So these low cost states are becoming scarce and valuable resources just like natural resources such as timber and minerals.
When and if this economy begins to recover, there will be a surge of business shifting from the high tax states to the lower tax states. Unlike in the past, the terms of the decision will be decisive and stark because the big spending states will be in so much trouble that they will raise taxes so high that they will simply drive their businesses out. Business will have no ch
One thing that could be a major stumbling block for any major railroad expansion would be all the bureaucratic obstacles that would have to be overcome. The proposed DM&E extension into the Powder River Basin would be Exhibit A. It took nearly 10 years to clear all the obstacles as well as millions of dollars in legal fees. In the end they got the authority to build but no one was willing to finance the operation.
During the railroad building boom of the 19th century nobody had to file an Environmental Impact Statement. Many cities and towns begged the railroads to come and often offered incentives including cash and free land. In today’s regulatory environment it is doubtful that many of our most prosperous roads could even get permission to build.
A lot has changed in the regulation of land use and railroads since the days of massive land grants and competition by communities to issue bands to host the railroad in their town. Costs which bankrupted many, many groups seeking to construct new lines even in those times are even more burdensome now. There is virtually no more open range to build across as the landscape is now occupied by NIMBYs who will fight any new line tooth and nail and double or triple the already prohibitive costs of construction.
For example, a recent construction project we worked on for a spur track was estimated at $1.4Million per mile including only the construction of track and earthwork. Not included are the ROW acquisition costs, any extra costs including signalling, grade crossings, bridges, tunnels, culverts or any other structures. So, a better estimate would be at least the $2Million/mile average range plus ROW costs. That is beyond anyone nowadays of “average” or even above average means. As to building on “old” ROW, most of that trackage that was long ago abandoned has reverted to adjo
Business is always attracted to low tax states if those states can provide a supply of workers and other logistics. As this recession develops, there is an abundant and growing supply of workers everywhere, and a growing number who are willing to relocate to find work. At this same time, there is also a growing mobility in services provided by workers utilizing the Internet. So with the mobility provided by the web, and the abundance of workers willing and able to go anywhere, business is nimble, or some might say, fluid.
Also, as this recession develops, there is an increasing difference between states with runaway spending and rising deficits, and states that have not grown to the point where they are in the same condition. The states heading further into debt will require higher taxes. So these low cost states are becoming scarce and valuable resources just like natural resources such as timber and minerals.
When and if this economy begins to recover, there will be a surge of business shifting from the high tax states to the lower tax states. Unlike in the past, the terms of the decision will be decisive and stark because the big spending states will be in so much trouble that they will raise taxes so high that they will simply drive their businesses out. Business will have no choice but to flee to the lower tax states in order to s
Business is always attracted to low tax states if those states can provide a supply of workers and other logistics. As this recession develops, there is an abundant and growing supply of workers everywhere, and a growing number who are willing to relocate to find work. At this same time, there is also a growing mobility in services provided by workers utilizing the Internet. So with the mobility provided by the web, and the abundance of workers willing and able to go anywhere, business is nimble, or some might say, fluid.
Also, as this recession develops, there is an increasing difference between states with runaway spending and rising deficits, and states that have not grown to the point where they are in the same condition. The states heading further into debt will require higher taxes. So these low cost states are becoming scarce and valuable resources just like natural resources such as timber and minerals.
When and if this economy begins to recover, there will be a surge of business shifting from the high tax states to the lower tax states. Unlike in the past, the terms of the decision will be decisive and stark because the big spending states will be in so much trouble that they will raise taxes so high that they will simply drive their businesses out. Business will have no choice but to flee to t
The other issue I see with this is that your argument is really based upon the near term economic cycle. The short term changes arguably resulting from the current financial crisis. Large scale plant location decisions where expenditures of $50Million or more are common are generally long term decisions with time horizons of at least 10 to 30 years. Locating a steel mill, coal mine, power station, automobile manufacturing plant or other major rail dependent industry large enough to be of consequence to a Class 1 railroad is no small undertaking. I think it unlikely that such decisions are or will be made on the basis of a single cycle regardless of how profound. For some information concerning plant location you may wish to take a look at Site Selection magazine or thei website at www.siteselection.com.
I understand your point about the long range planning for heavy industrial plants.
The business migration that I am talking about would be near term, and there are reasons why it might not materialize at all, the most probable of which would be an indefinitely prolonged recession. But as I mentioned, if such a migration does occur, I am not expecting it to be a mass relocation of heavy, rail-dependent industry that would spawn a rail construction revival. Indeed, there may be none of that.
All I am suggesting is that this recession may produce unprecedented economic disparity betwe
Our greatest demand for new industrial trackage last year and this year is in many of the so-called high-tax, bad business climate states such as California, because (according to the shippers who want the spurs) there is lots of economic activity there, good government services, good living conditions, good labor pools, good markets, etc. Many of the so-called business-friendly states are in the doldrums, industrial-spur wise. Those shippers are investing with 25-50 year time horizons. I presume they know what they’re doing.
Sure, certain industries have gotten whacked – forest products, for example. But there is intense demand even in this climate for rail-served trackage in and around the
That’s interesting and makes alot of sense given the amount of highway congestion in and around big cities. Are these urban industrial spurs viable operations for class 1s or is this business most suited to smaller operators?
Some of both. It’s hard for me to find a pattern because some cities have existing shortlines with lots of industrial property access, and some don’t. Only really large shippers or logistics parks justify a third-party switching operation (as opposed to a shipper-owned or leased TrackMobile or switch engine to respot cars internal to the plant). I don’t think we’ll see too many spinoffs in cities these days of new short lines. Maybe the opposite, in fact – some selective reacquistion of short lines that were spun off.
Companies exit states for a number of reasons. For example, Northwest Indiana for years was the beneficiary of Illinois’ high tax rates. Many companies jumped across the state line. Most of these companies were small to medium sized. For a large industrial plant to move a number of factors must make it a sound investment.
Recently I lost a major account to a low tax state. One of the factors was the age and condition of the old plant. The new plant enjoys a very low tax rate plus modern operating conditions. On the downside is a very poorly educated workforce with a high rate of drug/alcohol problems. It will be interesting to see how it plays out, those jobs are gone and they aint never coming back.
Many of the states with deficit problems are the so called “blue states”. Not all, but many. I am not here to discuss the blue state/red state issue…that was settled in last November, but there will be considerable pressure on Washington to step in. Interestingly, there is a move now to downgrade government debt…as Great Britain saw its treasuries downgraded last week from AAA to AA. There are many discussions this is inevitable here with the massive deficits and bond offerings.
States will be caught in a tough spot. To attract new business lower taxes will be offered, but there will be tremendous pressure to raise taxes to pay for the excessive spending binge.