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Discussion in 'Getting Started' started by kf4jqd, Apr 22, 2008.
Believe it or not. They are!
Norfolk Southern Ekes Out Higher Profit
It's more cost effective to many businesses to use trains for transporting large amounts of cargo across land so it's no real big surprise to me, especially with rising prices in fuel
The fact that product doesn't get held up in traffic must be a big plus too.
The problem faced here in Colorado is that the railroads tore up their branch lines decades ago, leaving them with a surfeit of customers but no way to get the goods to the desired destinations.
A railroad's one insurmountable obstacle is that it can only go to a destination that has been planned for well in advance, and to which existing trackage is in place and fully operational.
I think we will see more and more freight being diverted to the railroads that were wise enough not to tear up branch lines for short term profit. Many of the railroads sold off unprofitable branch lines to individuals or small companies who operate the previous branches as short lines. There are at least two factors working in favor of the railroads. #1 The hight cost of fuel is going to have an effect on the trucking industry. #2 The lack of qualified truck drivers willing to run across country. A second factor related to #2 is if a small trucking company has too many traffic accidents, the insurance company raises their rates to the point that they are forced out of business because the insurance costs more than they make for a load. A lot of trucking companies are now putting their trailers in piggy back service and just using trucks for local delivery. In fact that may be the solution for the Colorado railroads that Mountain Man refers to.
I think all of the comments above are correct but one of the most interesting facts is that for the most part the Class I's have eliminated the small business that buys in bulk and sold those lines off to the lower overhead Class II's and shortlines. I have been following a couple of shortlines and many of them are making good money. They act as the interface with the Class I's and the businesses and seen traffic increase as they can expand their territories. They don't have the overhead required for cross country business.
Also when they disolved Conrail (sold off) after Conrail became profitable. The smaller railroads got to expand because of some of the laws in place to protect Conrail from having to compete. This has actually helped the Class I's to become more profitable. This would help mostly in the NorthEast US.
Part of the reason for selling off branches to short line or class 2 railroads is that most of the class 2's don't have to deal with unions or union work rules that eat up the profit of the class 1's when they try to work those branches, especially if the work load on those branches was of a low volume.
Guys,The biggest problems right now is:
1.Terminal dwell time that can leave a loaded car set up to 39 hours.
2.Average train speed of 22 mph.
3.Track Maintenance windows that leads to a backlog of trains.
5.Trains parked in sidings waiting for rested crews or yard entrance.
Nothing new there except the increase in freight traffic.
Reference for train speeds and dwell times:
For other reference see various Trains magazines.
Factor in the delays and difficulties with the airlines, and it sounds like our national transportation system is broken and on one knows how to fix it!
There is no shortage of people who know how to fix things; there is a shortage of people in charge who will let them do it.