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To: Fraxinus
Unless there is a typo, these time estimates tell the real problem with our current rail operators. Rail should take about as long as truck (from terminal to terminal), possibly less for truly long distance trips. I have been told that the biggest problem with shipping things by rail for many companies is that they find rail to be unreliable, i.e. freight car is not a designated delivery point at the time designated

Years ago, when there was still significant passenger rail service, the now-defunct Interstate Commerce Commission established uniform accounting rules for the railroads. Certain costs were incorrectly allocated to passenger service. On paper, the railroads couldn't make money on passenger service, so they slowly abandoned it. However, with the demise of passenger service, the costs didn't go away, since they weren't related to passenger service in the first place. As a result, the railroads are still losing money because of incorrect allocation of costs.

Ironically, the ICC was originally established at the behest of the railroads, who wanted to form a cartel but couldn't do so because they had no way of enforcing their "agreed" prices. Individual railroads would agree on specific tariffs for specific goods, but then "cheat" by offering "rebates" to big customers. Finally the railroads got the ICC to enforce their cartel. What they didn't realize was that the ICC, a political body, would pay more attention to the larger number of railroad users than it would to the railroads themselves. The railroads got their cartel, but the ICC set rates at money-losing levels.

One more illustration that you should be careful what you wish for. You might get it.

6 posted on 12/18/2005 4:53:05 PM PST by JoeFromSidney (My book is out. Read excerpts at www.thejusticecooperative.com)
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To: JoeFromSidney

Norfolk Southern seems to be making money.


9 posted on 12/18/2005 5:04:22 PM PST by patton ("Hard Drive Cemetary" - forthcoming best seller)
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To: JoeFromSidney
I never heard this about cost allocation, but it seems credible. Is there further documentation on this?

We are told that it's impossible for railroads to make a profit on passenger service; this might be true for all I know, but it's never been put to a fair test. Of course Amtrak loses money hand over fist; that's what usually happens when the government runs a business.

31 posted on 12/20/2005 4:21:31 AM PST by Christopher Lincoln
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