Opinion

Shareholder Value, or Public Safety?

Date: Sept. 27, 2019. News media outlets report potential life threatening situations with three different Class I railroad freight trains blocking railroad grade crossings, sometimes for hours at a time. These events seem to be increasing, both in number and length of time. Americans are not just inconvenienced. Lives are being place at great risk when a blocked crossing impedes emergency service providers from assisting people in need of help.

Short Lines: Custom, High-Growth Freight Service

Are short lines offering a better customer experience than Precision Scheduled Railroading (PSR)? The Class I railroad business seems to be all about the benefits of PSR. That’s the name of a cost minimization business strategy introduced more than a decade ago at CN, now expanding as the service model at five of the other six large North American railroad companies (Norfolk Southern, CSX, Union Pacific, Kansas City Southern and Canadian Pacific). Class I’s annually earn more than a Federal Railroad Administration-set threshold of $500 million in revenues.

STB’s Cost of Capital Dilemma

NEWS ITEM: The Surface Transportation Board (STB) proposes to change the formula for computing the cost of the equity component of the railroad industry’s cost of capital. This is of consequence to railroads, shippers and investors because cost of capital is a determinant of railroad revenue adequacy and a threshold for a host of other regulatory limitations on rail ratemaking.

Man, Those PRR Pinstripes Look Awesome!

Railroads in many ways are unique because, regardless of how many years they’ve been in business, there is usually a storied history that can be recalled. The best way to do that is by applying classic paint schemes from predecessor companies, or “fallen flags,” to the railroad’s most visible public faces—its locomotives, among the largest land vehicles anywhere. Union Pacific and Norfolk Southern, among others, have done this to much acclaim. Now, New Jersey Transit, which I like to call my “home” railroad, has joined the fold, and the results, in my opinion, are simply beautiful, inspiring.

Rails vs. Trails: The Battle Continues

Occasionally, rail advocates and bicycle advocates agree on an issue, such as placing bike racks on trains, if there is enough room for them. Often, though, relations between the two constituencies are stormy. In fact, they can be downright adversarial, especially if the right-of-way over which they stake their competing claims is not wide enough to accommodate both a rail line and a bicycle trail. The two sides have been engaged in battles around the country for years.

A “Two Amtrak” Concept

The dilemma: It’s now clear that Amtrak, the National Railroad Passenger Corporation, and its new management under former Delta Airlines CEO Richard Anderson and Executive Vice President Stephen Gardner, regards its principal responsibility as making the Northeast Corridor America’s first true high-speed rail route. That’s a worthy goal and no easy task. Running from Boston south through seven states and the District of Columbia, the Northeast Corridor is the central transportation axis for southern New England and the Middle Atlantic states. The dilemma is that Amtrak’s mandate is not limited to the Northeastern states.

Amtrak’s Interregional Growth Opportunities

Years ago, the Minnesota Association of Railroad Passengers ran an experiment. It published a quarter-page print ad in a weekly “shopper” newspaper in a small town in North Dakota served by the Empire Builder. The paper laid out the ad for free. It had no glitz, no slogans, just hard information: when and where the train went, where it connected to others, sample fares, onboard amenities, and the local station address and telephone. No “800” number, no web address, no ad agency fees. The ad ran four weeks in mid-Fall, when coach seats are abundantly available.

What PSR Is—and Isn’t: NEARS Talk

Out of a remote location in a corner of New England comes an interesting operations research view of what Precision Scheduled Railroading (PSR) is, and is not. Peter Swan, a Ph.D rail and logistics expert from the Penn State School of Business Administration, spoke Oct. 3 at the NEARS (Northeast Association of Rail Shippers) Fall 2019 Conference in Burlington, Vt.