US rail chiefs in plea on grain delays

Financial Times ^ | September 4, 2014 | Robert Wright

[null and void]

“XL”ent!

[Crazieman]

I feel like I’m reading Atlas Shrugged again...

[ClearCase_guy]

How is Taggart Transcontinental doing?

[bert]

The market solution is to increase the price paid for hauling grain to a level exceeding the cost to haul oil.

[SeeSharp]

The market solution is to increase the price paid for hauling grain to a level exceeding the cost to haul oil.

And then increase the price of both above the cost to build more rails.

[Alberta's Child]

That's not going to work because farmers have already been paid for their harvest through futures contracts. Adding cost to the shipment process won't fix anything.

A better "market solution" might be to break up the railroads and undo the last 30 years of consolidation in the industry, then grant a blanket waiver for any environmental permits on projects involving restoration of tracks on abandoned rights-of-way. That would provide some additional rail capacity faster than anything else.

P.S. This is why the U.S. railroad industry remains so heavily regulated even after a heavy dose of deregulation in the 1980s.

[DUMBGRUNT]

STB Chairman Daniel R. Elliott II,

a former transportation UNION LAWER,

presided http://www.agweek.com/event/article/id/24018/#sthash.nmxEowu8.dpuf

[Alberta's Child]

These railroads are going to be facing a serious political problem down the road. This sort of thing helps galvanize support in Washington for an interesting "deregulation" measure that the railroads have been fighting for years, and rears its head every decade or so.

It's called an open access concept, and it basically involves the break-up of the railroad industry in way that allows the railroads to own their rights-of-way and manage their own network, but allows access to the rail system by any company with a locomotive and rail cars that wants to serve customers on any railroad.

I'm not sure I know enough about the whole thing to give a serious opinion on it, but it is some interesting food for thought.

[Wyatt's Torch]

Time to add the Rio Norte line...

[bert]

The cost paid would not be by the farmers, but the grain grain owners Bunge, Archer Daniels Midland, General mills etc

One aspect that effected me personally was the elimination of Amtrak trains. Back in may we had reservations on an Amtrak train from Seattle to Chicago....... They trains were simply cancelled. We ended up flying.

I think the problem is a great problem for America to have. Scarcity yields growth. It would seem the growth of pipelines will end the pressure on the railroads. You noted rebuilding abandoned trackage that is also growth that would be beneficial.

It will get sorted out and the bottlenecks will be eliminated. There is simply too much $$ involved

[SeaHawkFan]

The best market solution would be to build pipelines.

[thackney]

Oil and refined products account for about 5% of the total Rail carloads in the US

http://www.freerepublic.com/focus/news/3198100/posts
8/28/2014

Eight of 10 of the carload commodity groups posted increases compared with the same week in 2013, including petroleum and petroleum products with 16,396 carloads, up 28.4 percent; grain with 18,721 carloads, up 17.6 percent; and nonmetallic minerals with 40,279 carloads, up 10.5 percent. The commodities that posted a decrease were coal with 115,050 carloads, down 3.9 percent; and chemicals with 30,003 carloads, down 0.1 percent.

[bert]

I know what you are saying but the pressure seems to be on the rails where there is transport of grain and crude over the same tracks.

Meanwhile, on the tracks near my house, the coal trains run all night full and return empty during the day.

[thackney]

For reference:

So grain deliveries are up by 3,208 carloads compared to last year, Nonmetal Minerals up 2,457 and Petroleum is up 1,462, but it is Petroleum's fault for the delays?

[raybbr]

“””Ithink the problem is a great problem for America to have. Scarcity yields growth.”””

That used to be true. Now with regulation, environmentalists, bureaucrats and local governments growth is only “deemed” growth. Who wants to fight a battle with all those entities taking that big a risk when they can glom onto what already exists.

[Wyatt's Torch]

Good chart. Thanks. What’s the source link?

[bert]

The truth is I don’t know.

Having said that, It is my impression that the problem is with railroads that move both products over the same tracks across North Dakota to Minnesota and thence south along the Mississippi river.

We don’t for instance have the problem here in east Tennessee where we don’t have crude and grain traffic.

[thackney]

I don’t know either. I just know there is a strong tendency to blame oil by the media, regardless if it is really the cause.

[thackney]

Association of American Railroads.

Click picture for their weekly report where the chart was published.