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.
1 Like
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.
Stockholders aren’t all the same. Some, maybe most, are happy with regular returns over a long period of time. Then there are those, usually in a group like the hedge funds and equity funds, that want short term, high returns and don’t care about tomorrow. The institional investors, like retirement funds, seem to be in the middle. Vanguard supposedly was behind gettin Vena pushed out at UP, yet he was able to come back at the insistence of a group with a minority position.
The CEO is an employee. If he doesn’t perform to the BOD’s liking, he gets replaced. If the majority want the company to be run in a manner that produces stock buy backs and high stock prices, but does so by consuming the physical assets, alienating and abandoning customers and lines of business and making an entire industry irrelevant, that’s how the business will be run.
Jeff
On a related note. I remember reading a little while ago that some hedge fund managers didn’t like index funds. I couldn’t understand why, at first. Then it hit me. Index funds are for long term investors and many “activist investors” only care about short term profits.
I think Woke, Zugmann, Trainsbutsmall, Backshop and Jeff have it right. Institutional investors control boards and get the short term results they want. This has largely been the case for long enough that the folks who get into management mostly have experience only with maximizes short-term returns. You confuse your position as a investor with the predominant view.
Thats fine but I want you also note the China shill is probably forever gone from the Forum after the Indonesia thread. Plop post, check reception…then depart if pushback is too much.
1 Like
This is so cool, thank you for letting me know! I don’t live anywhere near the area, but it’s exciting to see rail in the US expanding anywhere.
I think he was less a ‘China shill’ than someone interested in the ‘travel experience’ who made the mistake of parroting boilerplate claims from Wikipedia. His post was about Indonesian HSR, not whether China had designed and built the Indonesian system with autarchic technology.
I’m not so sure Woke. His profile said he was a “Global Citizen by CHOICE” (his emphasis).
One of the very few ‘bright spots’ for me, at least, is the revitalization of the East Broad Top and resurrecting a good portion of the long-abandoned right-of-way.
Recent Flickr photos from a photographer I follow:
250327_15 by akmyers83, on Flickr
The bridge at Pogue may get new ties this summer.
250327_12_pogue by akmyers83, on Flickr
I’ve been visiting the EBT since I was this big… (1961)
EJT East broad Top RR by Edmund, on Flickr
Might have to plan another visit this summer!
Cheers, Ed
1 Like
Perhaps you should try having a first hand, current experience with foreign passenger rail instead of denouncing someone who does.
Tourist reviews are OK as long as they stay in the lane. Once additional claims are added that a drive thru tourist would have no real clue on. Sorry but I will remain highly skeptical. It’s kind of like using the drive through window at McDonald’s and claiming granular details of McDonald’s operation. Opinions are ok too. However, there is no way on Earth someone riding a train can claim 100% made content. Or comment on year round system operations based on what? Which is the issue I had with Mr. Indonesia.
You continue to use demeaning and right wing media (“drive through” as used by the late drug addicted host Rush Limbaugh) terminology and other pejoratives such “tourist” to devalue the first hand experiences of others (stay in the lane) when your sinophobic bias precludes politite acceptance. Your opinions appear to be generated by sitting at a computer and reading uncited blogs, Wiki or military forums (the term “in country” is a dead giveaway). Generally in research approaches, empirical and/or primary data is preferable to secondary sources, which is what you use. You drove that new member away with your rudeness (calling him or her a “China shill” was inaccurate as well as nasty);and when called on it, you attack those who do…
Or is it because you haven’t ridden rails outside the routes from TX to WI in years? You had some good experiences with the DB, albeit in the distant past.
3 Likes
I agree completely