The reported demise of railroad industry

YmeBP

YmeBP

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Dec 3, 2006
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An interesting journey into information. <== no other way to explain it ;) i'd be interested in views and opinion. Edit: My links didn't show in blue trying the underline route/differnet font route

Hello all, i've been involved in this hobby now for a very short period of time and in that time i've come to gain a greater appreciation of the work and products that travel over rail (Thank NMRA train show in Philly and Thomas the Tank Engine). Partly becuase of this board anad partly because i've noticed more trains about. They didn't just appear, but i've never really paid any attention to it in the past.

Over the past week or so there have been much to do about Warren Buffet and his investments in rail. I decided to do a little more digging and found that the rail industry world wide is on an upswing. China is due to add millions of miles of rails over the next few years China info, India has the same plans India info, in the US there is a marked resurgence in rail movement. The rail companies have been smart in their marketing methodologies and they have found that Walmart and all the people who compete w/ Walmart make them money... lots and lots of money. Everything you can think of today (including trucks) is now trasported by rail info link.

What sparked this interest? I was on my way into work and i was listening to bloomberg radio ( tooth1don't ask i am a geek heheh) and they mentioned that companies are now using rails to trasnport their trucks(!!!!!) because it was cheaper in fuel and they could use economies of scale to drive logistics costs down. Now .. me being the amateur model railroader and thinking about the costs on a micro level of building a mile of railroad between two points, buying the engine, fueling the engine, paying the mofw crew, maintenance etc it all works out to be anywhere from 20 to 40% cheaper than the same volume over the road (double !!!!!) info link. You could have bowled me over w/ a feather especially considering that the over the road folks don't own the road!!

I mentioned my new found awareness of rail traffic earlier in this post, and after doing this bit research it makes sense. In the past 6 months even i've noticed that freight traffic on a particular line on my commute has increased, funniest part is it's mostly car and covered hoppers. They increased from 1 every other day to 1 every day (i travel pretty consistent times of the day) Map Link.
I've also noticed that in this area near New York City, there has been a re-&^$-diculous increase in rail traffic. So much so they built a new exit on the NJ turnpike and a GIANT junction station Junction Link Yard Link

I'm sure we have some rail workers and engineers as members of the board. I'd be interested to see what your feelings on this were.
 
2 things that are in favor of the railroads increasing market share is that there is a shortage of truck drivers, and the relative economies of rail verses truck transport. Train crews are well paid, but when you realise that 1 train can haul the equivilant of 100-200 trucks, the costs are very much in favor of trains. The second problem is that there is a shortage of truck drivers available, especially those drivers willing to drive across country and be away from home for days at a time.
 
I think that after a long, long (long) history of government involvement one way or the other, a relative monopoly, and lots of sticking the head in the sand, the railroad industry is playing to its own strengths, and is becoming more innovative.

While the railroads cannot compete directly with truck traffic (something they should have learned 50 to 70 years ago), they are more economical over the long haul (both time and distance). For "just in time" delivery, they aren't great, unless the products can be made well in advance - but that defeats the "just in time" scheme. For bulk products, and for time insensitive, bulky goods, like TVs, furniture, lumber, coal, and so on, they should not be able to be beat. Their involvement in intermodal forms of transportation started with TOFC many decades ago, but has been revolutionized by the intermodal container that goes from truck to ship to rail.

Also, they seem to be embracing new technology in a way that has not been seen since diesels wiped out steamers more or less "overnight" in the 1950s. GreenGoat yard engines, road engines with more efficient engines and computer-enhanced control for both the operation of the engine, and for ever higher densities of traffic. They have also changed their approach to construction and maintenance of their lines, using less specialized equipment that sits idle much of the time. Better to use a bulldozer that can do several jobs than, for example, a rotary plow that can do only one.

Now all this holds true for freight... If only it could also be applied to passenger trains in North America. Alas we do not have the population density of Europe, so it is unlikely that there will be a parallel renaissance in passenger travel (despite what VIA is calling their new passenger cars ;)).

Andrew
 
This is even better news because as long as the railroads are profiting, there will always be trains...and always be model railroading!!!
 
"An interesting journey into information."

That would be an awesome tag line for an alternative data/information website, something like Wikipedia.
 
Great posts, and very true. It still seems that there are an awful lot of trucks on the road which could just as well be on railroad cars. Anyway, as long as we here realize the truth of the situation, and can work on convincing our friends and co-workers of the importance of railroads (yes, even passenger), thing will have to improve over time.

As sort of an aside, but within the theme, I just returned from a trip from upstate New York to Greenville, SC and return (for the NRHS Board Meeting), the bulk of which was by train. I am happy to report that, despite all the bad things you hear about Amtrak, my trip down was right on time and the return even better. We left Greenville about 45 minutes late and arrived in Philadelphia (my destination) 15 minutes ahead of time! The onboard staffs on both trains were friendly and helpful, making for an altogether pleasant trip.
 
I never fully understood the decline of the railroad in the first place. They have so much in their favor for bulk shipping. There must have been major issues with planning and marketing.

One train with 3 employees can easily carry the cargo of 200 freight trucks. It would consume less fuel, travel further faster, require less maintenance, and have a lower loss of cargo from damage and theft. The only thing trains are not good for is the last mile, or whatever the terminology is for freight service, where trucks have to be used.
 
this is a great thread,and love reading it because its so true!but with the new "evolution" series locos by GE with great fuel mileage,the eco-nuts will actually do something good and promote trains as a better more efficient way to travel AND ship.and besides who wouldnt want to be a, engineer :D !--josh
 
MasonJar said:
Alas we do not have the population density of Europe, so it is unlikely that there will be a parallel renaissance in passenger travel.

Andrew
Click to expand...

As much as I like travelling by train, the trade-off noted above isn't worth it, in my opinion. :D :D

Wayne
 
I think you should consider that most of the railroads were formed to really serve a particular industry. In my home state of Pennsylvania many of the lost railroads were in business to do one thing, haul coal. As the coal went so did the railroads. Other items were hauled but again the population was centered around major cities. I think the passenger train service is self explanatory with the advent of modern automobiles and the spreading of the population.

The strange fact is that railroads have learned how to survive and even grow in today’s marketplace. I can’t really say I have noticed more rail traffic even though I live near one of the busiest rail lines cutting through Pennsylvania. A good note is that except for a reduction from 2 to 1 stops in Johnstown for passenger service I haven’t noticed any less traffic.

I do know that the rail traffic in the New York to Philadelphia corridor appears to be busy and the last time I took Amtrak the passenger stations were full between both cities. Personally I think the train is the best way to get into NYC.

Now don’t get to excited about WB. He is a dollar man and the timing was right but this didn’t translate into more rail traffic for the BNSF.

"Improved yields from our well-balanced portfolio allowed us to achieve record first-quarter revenues despite flat volumes on a year-over-year basis. In addition, we continue to drive operating expense efficiencies and improve velocity, delivering our best on-time performance since 2004," said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer.

[FONT=&quot]A good note is their stock 52wk Range:63.80 - 95.47 Current price 90.57.[/FONT]
 
I've been doing more digging into the finance of the railroad industry, and how quickly they can adapt. It looks like based strictly on wall street that the consolidation efforts of the major railroads over the past 12 to 20 years have been paying off in spades on the freight lines recently. Railroads are solidy in the black and are very viable entities now aday's.

On psasenger lines it seems that there are not enough forms of mass transit at the destination to support more train travel, so people who would normally love to take the train to south carolina would need a way to travel around once they get there. So most drive instead of taking the train. I have an aunt and uncle that load their car onto amtrak and travel that way... i looked up the price .. :cry:mother of pearl was it expensive!!

To Renovo PPR's point, I've noticed that it is the electronics and large durable goods (cars are a big one there is a caryard not far from here) that seem to drive allot of the commerce on the rails around here. Apparently travel by rail results from less loss due to damage and theft than trucks. All of which i don't think i'd have ever paid a second though unless i had gotten into model railroading first.

I have a question about "of way" part of "Maintenance of Way". In today's age of astronomical realestate prices how does a railroad afford to buy land for laying track, and how much track can a railroad lay in a given day. (Arguement at work i want to win).
 
This is developing into a very interesting thread. this reply may get to be a bit long due to a bunch of ideas raised by previous posters.

Regarding YmeBP's question about railroads aquiring new property for new rail lines, I doubt if they need to buy more land anymore. I think most land aquisition for the railroads was completed prior to 1920. As railroads have merged and been bought out, the land has gone to the new railroad with the new ownership. In fact there is more divesting of excess & obsolete branch lines than aquisition of new right of way. I think virtually all "maintainance of way" consists of maintainance and repair of existing track rather than laying new routes. New regional & shortlines are not aquiring fresh land to lay track on, they are buying up branch lines that are being divested from the class 1 railroads. The shortlines often do not have unions, or union rules that force them into the inefficiensies of a class 1 so that a nonprofitable branch on a class 1 railroad becomes a profitable shortline. If an industry needs rail service that did not previously have rail service, that industry has to provide a right of way for the railroad and pay for the installation of the siding.

As far as on time passenger service is concerned, when Amtrak was formed, the government did not put anything in the contract or law to force the freight railroads to give any priority to passenger service. Amtrak has been blamed for poor on time performance when in fact the freight railroads whose right of way Amtrak uses can hold a passenger train on a siding indefinately while friegth trains are given priority. In addition, the freight railroads were supposed to maintain track that could sustain passenger train speeds in safety, but some of the freight railroads run trains at 45 mph and haven't bothered to maintain track to higher standards, thus slowing Amtrak trains on their lines. Recent emails I've received from rail passenger advocate groups have pointed out that Amtrak is putting language in their contracts with the freight railroads to provide penalties if the freight railroads don't give passenger trains priority for on time service. Amtrak has a bit of clout because a railroad as a public utility could be required to provide passenger service and Amtrak disolved, if the government so ruled. It won't happen, but the threat does give the freight railroads some incentive to help out Amtrak.

Finally regarding the BNSF ceo quotes from Renovo PPR, shortly after the Santa Fe was taken over by the BN to form BNSF, I was called on to repair some ac units on mow equipment out of San Bernardino, Ca. I talked to some of the SF management personel who were now with BNSF and asked them what difference the merger made on day to day operations. The most common answer I got was that BN had slowed the railroad down 10 years, and they weren't sure how long it would take to get the BN personel up to the speeds the SF used to run. It sounds like the BNSF might finally be getting up to the speed the SF used to run! Typical speeds across the desert down here for Santa Fe freights used to be 75 mph or faster!
 
I've been planning my next section of layout and i've been toying w/ the idea of adding passenger service, your response is helping solidify a great plan!!!!

I've been watching amtrak here in the northeast, they've built a new building in philadelphia (cira center) and the acella is insanely popular w/ the guys i work w/ in the computer industry because they can plug in and work and get to where they are going between washington dc and boston in comfort and relatively quickly. There have been rumors of internet being offered on the acella soon.


I've been thinking of how to keep excitement on my rail lines after they've been built. This thread is full of some great info and i think i'd like to model these politics and progression on my layout. I've been reading alot about how and why the freightlines are contracting more and more w/ ups (i saw about a bazillion ups trucks being pulled by what looked like some form of dash 8 w/ wings mu'ed). Does anyone have any more info on the courier business and trains?
 
hmm... I'm running steam power, so I guess I'm pre-Amtrac, which means any passenger service I run is owned by my own railroad. Let's see, I guess I can run my passenger trains at whatever priority I want!
 
Travellar said:
hmm... I'm running steam power, so I guess I'm pre-Amtrac, which means any passenger service I run is owned by my own railroad. Let's see, I guess I can run my passenger trains at whatever priority I want!
Click to expand...

You can, but in the steam days class 1 railroads ran passenger trains at top priority for 2 reasons. 1-They were in business to sell tickets on passenger trains and usually had competition from other railroads on the same or parrallel routes. 2-They had mail contracts that required priority service. A lot of people who don't model the Santa Fe don't realise that the Super Chief was not the fastest train on the Santa Fe schedule. The fastest trains on the Santa Fe schedule were the mail trains that ran from LA to Chicago and the Chicago to LA fast mail.
 
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