OK, so here is a perfect example of Federal stimulus money ron amok, as blatant "corporate welfare".

http://hosted.ap.org/dynamic/stories/U/US_STIMULUS_FREIGHT_TRAINS?SITE=PAPIT&SECTION=BUSINESS&TEMPLATE=DEFAULT

I have been very involved in the logistics business, and I can tell you that for the past seven years, the railroads have done nothing but jack up prices and restrict capacity as much as possible, in order to keep prices propped up high.

If you are a shipper who is rail served, it is most likely that you have access to only one railroad, and thus they have a monopoly on your business and can price at will.  (Smart companies locate their plants so that they can be served by at least two railroads, to establish competition).

Anyway, the Department of Transportation just handed the CSX Railroad $98,000,000 of your and my tax dollars so they can "expand capacity".  Once this "expanded capacity" is built, you can be sure that the railroad will jack up prices to the max, in accordance with its monopoly status.

Oh, and by the way, last year the CSX made about $1 Billion profit, even during the Great Recession.  It is not like these guys are going broke.

Sickening stewardship of our tax dollars.  8-P

Railroads? Monopolies? Government corruption?

Never heard of such a thing!

http://deathby1000papercuts.com/wp-content/uploads/2008/05/sjff_03_img0979.jpg

I don't know, sounds like a good idea to me.  Better transport, less pollution.

I don't know, sounds like a good idea to me.  Better transport, less pollution.


Don Carlos,

If this were some sort of funding for unproven technology then I would look at it less harshly.  But the bottom line is that this money will go straight to the railroads' bottom lines.

I have considerable experience in freight railroad matters and I can tell you that the railroads could have done this project easily without government funding, and the rates that they charge are almost completely unfettered by any government oversight.

I've shipped millions of tons of freight from the East Coast into Ohio over the past decade (and thus the empty trains going back) and track capacity was never an issue.  What WAS an issue was the railroads parking rail cars because they wanted to maintain "pricing discipline", and as a result we switched some transportation to truck because it was cheaper.  Six or seven years ago we regularly shipped these routes by rail because it was vastly cheaper.  But then the railroads got greedy.

Regarding this project, the government was either asleep, corrupt, or bamboozled.

Admittedly, I know nothing about RR technology, rate setting etc, and I do know that RR's historically have been only too happy to suck at the public nipple.  But empty cars going back is like ships returning to home port in ballast, something that every shipper hated and tried to avoid.  Is there a parallel?

Admittedly, I know nothing about RR technology, rate setting etc, and I do know that RR's historically have been only too happy to suck at the public nipple.  But empty cars going back is like ships returning to home port in ballast, something that every shipper hated and tried to avoid.  Is there a parallel?


Don..

Empty cars going back is a dynamic issue and all transportation providers (rail, truck, barge, ocean, laker) try to minimize "deadheads" to the maximum amount possible.

The reason that I mentioned the deadhead run is because the millions of tons of traffic I managed went from the East Coast to the Midwest, and there was never a bottleneck in either direction, empty or full.  What we did regularly deal with were railroads who intentionally restricted car supply in order to prop prices up.

Without naming names, for decades, one of my customers was served by a nice little connecting railroad which was tough, but also served them well.  A couple of years ago, the small railroad was "consolidated" into one of the Class 1 railroads (I will not name names here), which immediately started jacking up prices, withholding cars, and so on. 

We told this railroad that if they did not stop being such A-holes, we were going to build out a railroad feeder track to another railroad and cut them out.  The called our "bluff"... took us a few months but we built new tracks that connected to a different nearby railroad who was happy to get our business at fair rates etc.  UNFORTUNATELY 99% of rail customers do not have the capability to do what we did, and so they suffer with little/no recourse.

Don..

Empty cars going back is a dynamic issue and all transportation providers (rail, truck, barge, ocean, laker) try to minimize "deadheads" to the maximum amount possible.

The reason that I mentioned the deadhead run is because the millions of tons of traffic I managed went from the East Coast to the Midwest, and there was never a bottleneck in either direction, empty or full.  What we did regularly deal with were railroads who intentionally restricted car supply in order to prop prices up.

Without naming names, for decades, one of my customers was served by a nice little connecting railroad which was tough, but also served them well.  A couple of years ago, the small railroad was "consolidated" into one of the Class 1 railroads (I will not name names here), which immediately started jacking up prices, withholding cars, and so on. 

We told this railroad that if they did not stop being such A-holes, we were going to build out a railroad feeder track to another railroad and cut them out.  The called our "bluff"... took us a few months but we built new tracks that connected to a different nearby railroad who was happy to get our business at fair rates etc.  UNFORTUNATELY 99% of rail customers do not have the capability to do what we did, and so they suffer with little/no recourse.


First, not to pick knits, but isn't Don, it's Carlos.

Second, what you point to is a lack of regulation.  How would the Repub majority of 41 in the senate respond to a Dem initiative to regulate railroad rates?

First, not to pick knits, but isn't Don, it's Carlos.

Second, what you point to is a lack of regulation.  How would the Repub majority of 41 in the senate respond to a Dem initiative to regulate railroad rates?


I think that there already exist laws to address the abusive service monopolies in the railroad industry.  Sadly, the collective Dem and repub administrations, over the past 20 years, have not chosen to use them.  Every time a railroad bought out another one, the government had full authority under the various Antitrust acts, to enter into consent decrees with the railroads, which would have placed constraints against anticompetitive and abusive practices.  This opportunity was squandered or ignored.

If for some reason that turned out to be politically unachieveable, and I felt compelled to spend Federal $$$ on rail projects, then I would spend them on projects that INCREASE competition; the $98MM gift to the CSX is simply a late Christmas gift to a largely-unregulated monopoly.

Or... I would provide a viable, expedited appeals process for railroad rate increases or service curtailments.  (I'd need to think how to structure that to keep it from being a quagmire though).

Note... before the railroad deregulation, almost every railroad in the USA was going bankrupt and service was terrible.  I do not really want to take us back to that scenario.  But the pendulum swung WAAAAAY too far in the opposite direction.

I think that there already exist laws to address the abusive service monopolies in the railroad industry.  Sadly, the collective Dem and repub administrations, over the past 20 years, have not chosen to use them.  Every time a railroad bought out another one, the government had full authority under the various Antitrust acts, to enter into consent decrees with the railroads, which would have placed constraints against anticompetitive and abusive practices.  This opportunity was squandered or ignored.

If for some reason that turned out to be politically unachieveable, and I felt compelled to spend Federal $$$ on rail projects, then I would spend them on projects that INCREASE competition; the $98MM gift to the CSX is simply a late Christmas gift to a largely-unregulated monopoly.

Or... I would provide a viable, expedited appeals process for railroad rate increases or service curtailments.  (I'd need to think how to structure that to keep it from being a quagmire though).

Note... before the railroad deregulation, almost every railroad in the USA was going bankrupt and service was terrible.  I do not really want to take us back to that scenario.  But the pendulum swung WAAAAAY too far in the opposite direction.



You point to a real issue - gov't not using powers already in place.  And not only re railroads.  But unfortunately that was the prevailing philosophy in DC for too many years.