Eastern Railroad Discussion > Time to break up the railroads?

There's a lot of discussion in the business world about how big is "too big". Too big to manage, too big to be nimble, etc. Banks that were too big to fail in 2008, are even bigger now. Is the same problem true of the railroads?

No question that the "shared assets" rail program has worked well in NJ, and in the Philly area. A terminal railroad runs local operations, builds outbound trains, etc. NS and CSX are responsible for marketing and sales. The Public Belt performs many of the same functions in New Orleans.

Would a similar program work in places like Baton Rouge, Lafayette LA, Jacksonville FL, Houston TX, maybe even Miami? Create a terminal railway to offer shippers a full choice of how they want to ship...

Lackawanna484 Wrote:
-------------------------------------------------------
> There's a lot of discussion in the business world
> about how big is "too big". Too big to manage, too
> big to be nimble, etc. Banks that were too big to
> fail in 2008, are even bigger now. Is the same
> problem true of the railroads?
>
> No question that the "shared assets" rail program
> has worked well in NJ, and in the Philly area. A
> terminal railroad runs local operations, builds
> outbound trains, etc. NS and CSX are responsible
> for marketing and sales. The Public Belt performs
> many of the same functions in New Orleans.
>
> Would a similar program work in places like Baton
> Rouge, Lafayette LA, Jacksonville FL, Houston TX,
> maybe even Miami? Create a terminal railway to
> offer shippers a full choice of how they want to
> ship...

The industry as a whole is making money hand over fist and making huge reinvestments of capital in infrastructure. It's far from perfect, but there's little emperical evidence to support the kind of draconian changes you seem to be in favor of.

As you know, years ago, every major city or industrial areas had a terminal or belt line railroad that was jointly owned by major railroads. Even smaller cites like Fort Wayne, Kokomo, and Elwood Indiana, for example, had them. However, I see that CN purchased the "J", however, the B&OCT is still an entity, but the Chicago & Western Indiana is just part Of NS now?

Victor A. Baird
http://www.erstwhilepublications.com



Edited 2 time(s). Last edit at 01/18/15 13:07 by wabash2800.

I agree with Pittsburgh Mike. The industry is very capitol intensitve and needs to rake in all the money it can.
Shippers are ungrateful whiners.

wabash2800 Wrote:
-------------------------------------------------------
> As you know, years ago, every major city or
> industrial areas had a terminal or belt line
> railroad that was jointly owned by major
> railroads. Even smaller cites like Fort Wayne,
> Kokomo, and Elwood Indiana, for example, had them.
> However, I see that CN purchased the "J", however,
> the B&OCT is still an entity, but the Chicago &
> Western Indiana is just part Of NS now?

B&OCT exists pretty much on paper. They own a lot of CSX operated trackage in the Chicago area and Barr Yard, but they have no locomotives or rolling stock of their own. It is a wholly owned subsidiary of CSX. Some of the other RRs in the area have at one time or another claimed that B&OCT is a sham, and exists just as an excuse for CSX to collect some additional revenue.

Chicago & Western Indiana no longer exists. What trackage still remains is owned by UP, NS and Metra.

Chicago's terminal RRs are IHB and BRC. For how much longer is unclear.

wabash2800 Wrote:
-------------------------------------------------------
> As you know, years ago, every major city or
> industrial areas had a terminal or belt line
> railroad that was jointly owned by major
> railroads. Even smaller cites like Fort Wayne,
> Kokomo, and Elwood Indiana, for example, had them.
> However, I see that CN purchased the "J", however,
> the B&OCT is still an entity, but the Chicago &
> Western Indiana is just part Of NS now?
>
> Victor A. Baird
> http://www.erstwhilepublications.com

Once upon a time there was the Allentown Terminal Railroad at Allentown, Pa it handled all the interchange and passenger operations of the Reading Railroad, The Central Railroad of New Jersey, and The lehigh Valley Railroad. It was jointly owned by all 3 railroad companys.
Jim

jim6300loco Wrote:
-------------------------------------------------------
> wabash2800 Wrote:
> --------------------------------------------------
> -----
> > As you know, years ago, every major city or
> > industrial areas had a terminal or belt line
> > railroad that was jointly owned by major
> > railroads. Even smaller cites like Fort Wayne,
> > Kokomo, and Elwood Indiana, for example, had
> them.
> > However, I see that CN purchased the "J",
> however,
> > the B&OCT is still an entity, but the Chicago &
> > Western Indiana is just part Of NS now?
> >
> > Victor A. Baird
> > http://www.erstwhilepublications.com
>
> Once upon a time there was the Allentown Terminal
> Railroad at Allentown, Pa it handled all the
> interchange and passenger operations of the
> Reading Railroad, The Central Railroad of New
> Jersey, and The lehigh Valley Railroad. It was
> jointly owned by all 3 railroad companys.
> Jim


Yes. That's a good illustration. As would be the Niagara Junction, Hoboken Connecting, or the Indianapolis Union,
etc. Conrail wrapped up many of these lines when it assumed their parents.

But the issue remains that the customer / shipper gets a better deal when there's an even choice of routes.

Houston has a terminal railroad owned by the Houston Port Authority, KCS, BNSF, and UP. It's the Port Terminal Railroad Association. I have two brothers in law that work for this railroad, and from what I've seen of the operation it runs pretty smoothly.
Dan

Posted from iPhone

dschlegel Wrote:
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> Houston has a terminal railroad owned by the
> Houston Port Authority, KCS, BNSF, and UP. It's
> the Port Terminal Railroad Association. I have two
> brothers in law that work for this railroad, and
> from what I've seen of the operation it runs
> pretty smoothly.
> Dan
>
> Posted from iPhone

Thanks for that. Although I've seen the railroad several times, I thought it had been broken up among the owners.

Not an outrageous idea but probably not what folks are thinking.

The way big business with competing routes usually works these things out is by reducing parallel resources, in this case parallel routes. It often works out to have a circuitous route serving multiple locations as opposed to multiple straight line routes serving the same number of locations. A western example would be UPRR letting go of the I-5 north south corridor that is also served by the heritage Portland-SLC-LA routing. That also justifies the expense of absorbing the SP with UPRR, the only thing holding the I-5 route together is the Intermodal competition and inefficiencies in the Donner/FRC routes but also the capacity of the SLC routing. Drastic example but there's plenty of parallel routes in the East. If everything Economic went into the drain likes folks want to believe, that would be a definite sign of it.

Terminal or Belt roads seem to agree with the big RR strategies, similar to the Regionals doing all the switching and handing the long haul to the big RR's.

obviously u havent shipped anything re

raytc1944 Wrote:
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> I agree with Pittsburgh Mike. The industry is
> very capitol intensitve and needs to rake in all
> the money it can.
> Shippers are ungrateful whiners.

While the industry is indeed capital intensive, I kinda think there would be more than a few shippers who would disagree with you. Rather strongly.

I happen to be the son of one, and grew up (many years ago now, and my dad is deceased) hearing a very great deal about the railroad industry from the viewpoint of a large corporation that was a significant railroad shipper. There was a lot more appreciation about the capital-intensive nature of the railroad business than you might imagine. And even back then in the days of regulation and early post-Staggers dereg, there was a desire to have the rail industry's infrastructure and operations supported financially in a way that helped assure good service. Dicey service, poor track, and other unreliable infrastructure served no one, least of all shippers seeking good service. This was very well understood, I assure you.

As for present times, we live in an era of customer-centered business practice. It is a very high competitive value in many successful businesses, and I think it is in the railroad industry, too, as I see things today only from my current interested-party perspective. To call the customer base a group of "ungrateful whiners" is incredibly and inappropriately dismissive.

MC
Columbia, Missouri



Edited 1 time(s). Last edit at 01/18/15 16:20 by ironmtn.

Thanks for the info.

calumet Wrote:
>
> B&OCT exists pretty much on paper. They own a lot
> of CSX operated trackage in the Chicago area and
> Barr Yard, but they have no locomotives or rolling
> stock of their own. It is a wholly owned
> subsidiary of CSX. Some of the other RRs in the
> area have at one time or another claimed that
> B&OCT is a sham, and exists just as an excuse for
> CSX to collect some additional revenue.
>
> Chicago & Western Indiana no longer exists. What
> trackage still remains is owned by UP, NS and
> Metra.
>
> Chicago's terminal RRs are IHB and BRC. For how
> much longer is unclear.

raytc1944 Wrote:
-------------------------------------------------------
> Shippers are ungrateful whiners.


Doug? Is that you? Once upon a time I was customer service manager at a regional carrier and while in an argument over service, I had a manager of train operations tell me in a load and angry voice that I was a pain in his "posterior" and that he could run one hell of a railroad if he didn't have to put up with me and all my G-D customers. If you are not this MTO, you certainly are cut from the same cloth.

scraphauler Wrote:
-------------------------------------------------------
> raytc1944 Wrote:
> --------------------------------------------------
> -----
> > Shippers are ungrateful whiners.
>
>
> Doug? Is that you? Once upon a time I was
> customer service manager at a regional carrier and
> while in an argument over service, I had a manager
> of train operations tell me in a load and angry
> voice that I was a pain in his "posterior" and
> that he could run one hell of a railroad if he
> didn't have to put up with me and all my G-D
> customers. (snip)

Many companies have people who believe they could run a better operation without customers. They often get to find out the error of their ways. It's never pretty. Fortunately wiser heads will usually prevail. But when anyone has a monopoly, and can tell customers to take it or leave it, sometimes ugly things happen.

That's why I posed the original question. Making sure customers have real choices may help everyone to run a good business, with intelligent decision making.

You should sit in on a shipper meeting when they speak about service excellence, local service measures, etc and still have this opinion. Shippers for the most part are CAPTIVE. Not whiners. Calling them whiners and only worrying about one thing, profit, is what drives people to want to set legislation to reregulate the railroads and make them smaller and more manageable. Sadly, profit is the only thing that matters on wallstreet. I wonder how these meetings sound on the BNSF now? I presume similar because afterall, Warren Buffett is only worried about his wallet too.

Joe

raytc1944 Wrote:
-------------------------------------------------------
> I agree with Pittsburgh Mike. The industry is
> very capitol intensitve and needs to rake in all
> the money it can.
> Shippers are ungrateful whiners.

calumet Wrote:

>
> B&OCT exists pretty much on paper.

It is a wholly owned
> subsidiary of CSX. Some of the other RRs in the
> area have at one time or another claimed that
> B&OCT is a sham, and exists just as an excuse for
> CSX to collect some additional revenue.

I think every railroad knows this-----hence the reason to this day all the employee "free-be's have the B&OCT logo, telephones are answered "B&OCT", interchange instructions are labeled BOCT, labor agreements are BOCT, etc. From what I've heard every car that rolls on B&OCT trackage in Chicago collects a "switching charge" even if it's a unit train that never gets switched!! Pretty good scam, eh?

There is no such thing as a "captive" shipper. If they don't like shipping by rail lef them ship by truck.
Oh you say trucking cost more. I guess the railroads are the CHEAPEST way to ship. If they want
low rates let the shippers help pay for the railoroads' capital costs. I have NO sympthy for the
shippers who most often enjoy a better return on investment than the railroads!

CSX_ENG Wrote:
-------------------------------------------------------
> calumet Wrote:
>
> >
> > B&OCT exists pretty much on paper.
>
> It is a wholly owned
> > subsidiary of CSX. Some of the other RRs in
> the
> > area have at one time or another claimed that
> > B&OCT is a sham, and exists just as an excuse
> for
> > CSX to collect some additional revenue.
>
> I think every railroad knows this-----hence the
> reason to this day all the employee "free-be's
> have the B&OCT logo, telephones are answered
> "B&OCT", interchange instructions are labeled
> BOCT, labor agreements are BOCT, etc. From what
> I've heard every car that rolls on B&OCT trackage
> in Chicago collects a "switching charge" even if
> it's a unit train that never gets switched!!
> Pretty good scam, eh?

It's a terminal railroad in the Chicago Switching District. So are BRC and IHB. All three of them are paid per car for cars interchanged.A train moving on trackage rights does not pay the fee, only cars received in interchange and delivered in interchange. Look at History. B&O never owned a railroad into Chicago. B&O owned track between Pine Jct. and the IC connection at Brookdale. That was operated by B&OCT, but it was B&O track. B&OC between Beverly Jct. and 75th Street was a wholly owned B&O subsidiary operated by B&OCT. The rest of B&OCT was a separate railroad, Chicago Terminal Transfer, which B&O purchased. At least, B&OCT owned locomotives and cabooses before CSX. B&OCT had a general manager who worked exclusively for B&OCT and was located in Chicago (in Grand Central Station until we moved out). He was the highest B&OCT official. Is there still such a position? If so, is it still in Chicago?

TAW

If a company is "too big to manage" that really means its managers are self-interested, protective of their turf, communicating badly, screwing their fellow employees over, not listening to the rank-and-file that does the work, and that sort of thing.

It means the top layer of management isn't really listening to the people that make up the system.

One example: When the internet became part of life, most of us started out using Internet Explorer. Now I can't stand using IE and much prefer Chrome! Microsoft just wasn't listening, and every change they make just sucks worse.

Railroads need to get bigger, in my opinion, to compete/partner with trucking and barges more effectively, not smaller.