I hear a lot of hooplah about the rail industry these days - none of it good for the industry. Amtrak potentially being privatized to die at the hands of the market, PSR causing railroads to degenerate, shortsighted stockholders making poor decisions… I rarely hear anything remotely good, let alone words like “new construction” or “expansion”. Is there any good news that anyone would like to share?
There’s plenty of positive news in Trains magazine.
Brightline
Brightline West
614, 3001, 5550, etc. 2926 already done
Railroad freight volume has been holding steady.
Are you sure it is not management response to stockholders? I think stockholders get a bad rap here. It’s always been the goal of a stockholder to make money on an investment over time. Response to stockholders is where the issues arise. From my observation as a stockholder, in a lot of cases the issue is with a railroad CEO being too stuck in the past with little vision for the future. If you have nothing to offer the company, you shouldn’t be in the CEO position. Unfortunately some of the railroad CEO’s feel entitled to the position for one reason or another and want to occupy the position and not add much value.
The embrace of PSR was done more because competing railroads could offer no competing vision or compelling vision to the improved financial performance of railroads that adapted PSR or explain why their operating ratios were so stagnant over time. So the easy choice? Switch to PSR and look like a hero.
No, he’s right, it’s stockholders.
A railroad is a transportation provider. Effective management for a transportation provider maximizes shareholder wealth by providing and assuring efficient transportation – and if that includes growing the business to increase wealth efficiently provided, fine.
On the other hand, from before the days of William H. Vanderbilt, running a railroad purely for monetary shareholder return involves slower trains, less-safe operation, and charge-what-the-traffic-will-bear, rebate-extracting, illegal traffic-pooling machinations, exactly what produced knee-jerk regulation then, and renewed GAO scrutiny only a year or so ago.
You don’t see nearly as much of that crap from an outfit run by value investors, for shareholders who trust value and long-term investing.
How about the new commuter rail line connecting Boston and the south coast of Massachusetts for the first time in 65 years? Just opened Monday.
Then why do we keep recycling the same group of executives from railroad to railroad to railroad to railroad, while anyone that tries to modernize the companies get shown the door pretty quick?
I’m surprised they haven’t fired up a backhoe to dig up EHH and put him in charge of something again.