The Coming Competitive Milieu

Okay, I was off by two years. Euro was last worth less than $1 in 2002:

http://www.x-rates.com/d/EUR/USD/hist2002.html

My point is that it helps to retain a memory when looking at trends.

Oh, and I've been working in transportation economics for 31 years. What's your job, "ne plus ultra"?

Anyway, to return to the point here...transportation in the future is likely to be a lot more expensive than it's been in the past, for a whole lot of reasons (few or none having to do with global warming or the long-term decline of the American empire).

My list of reasons:

1) We're running out of capacity everywhere (liner shipping, roads, railroads, airways)
2) Investment, for a variety of reasons, has lagged demand
3) In the US at least, a focus on highways has retarded the development of alternatives
4) The Europeans and Asians have invested/are investing heavily in rail as an alternative to highways, but if one looks at travel demand and mode split, auto use is increasing in Europe and Asia just as it did in the US
5) Since gasoline prices in Europe have been very high for a very long time (as a matter of policy), increases in oil prices are not likely to have as large an impact in retarding the growth in auto transportation there as they have here.
6) Finally, we're starting from such a low base of passenger rail capacity that it's hard to see how, in the short or even the medium term, passenger rail is going to make much of a contribution to solving our problems.

NellieBly wrote:whole lot of reasons (few or none having to do with global warming

Global warming will be stopped by carbon taxes like jumping on one foot keeps away elephants indoors, nonetheless, there are enough people who think with the same quality as ne-plus-ultra that we WILL suffer the imposition carbon taxes.

3) In the US at least, a focus on highways has retarded the development of alternatives

I blame Robert Moses, and the entire public roads movement. (I think that roads should be privately owned, with the owners paying taxes JUST LIKE RAILROADS.)

6) Finally, we're starting from such a low base of passenger rail capacity that it's hard to see how, in the short or even the medium term, passenger rail is going to make much of a contribution to solving our problems.

Mmmmm..... look at how quickly electric trolleys came to American cities. Every city with more than 50,000 people had a trolley 100 years ago. I'm not predicting that trolleys will come back. I'm predicting that some overlay technology like the RUF will be implemented. But it will only take ten to twenty years before it's widespread.

http://www.nzherald.co.nz/section/2/sto ... d=10499327

"EasyJet yesterday became the latest airline to add to the dark clouds gathering over the aviation industry with a warning that the historically high fuel price is making it much more difficult to make money."

Russ Nelson wrote:

Quote:
3) In the US at least, a focus on highways has retarded the development of alternatives

I blame Robert Moses, and the entire public roads movement. (I think that roads should be privately owned, with the owners paying taxes JUST LIKE RAILROADS.)

Believe it or not, something like this was advocated in Ameerica as early as 1968-70, when the post-WW II dominance of the bureaucratic state was just beginning to lose some of its luster. There was a very-thinly-circulated booklet entitled Society Without Coercion, published by the Society for Rational Individualism, one of the better-known precursors of the Libertarian Party. But ideologues tend to spend too much time fighting among themselves, and a search via Google turned up no reference to either the booklet or the group.

The scheme for privatizing the highway system, while not practical during the high-water years of highway dominance, was nonetheless well-thought-out. It would have begun by privatizing the limited-access highways, where charges would be easiest to collect, then making local neighborhoods, housing tracts, and shopping districts take responsibility for their own roiads, just as shopping malls maintain their parking lots. Management and maintenance of the state and local roads in between, while not immediately suitable to privatization, could have been decentralized down to at least the county level, which is how highway departments are already organized in most American states.

What intrigues this writer the most, however, is that the first stirrings of this trend have actually come to pass; The newest toll road systems are springing up in exurban and resort areas, where incomes are high and the individual's time is perceived as of greater value, and a few American states have contemplated placing tolls on certain Interstate highways where truckers are the primary clientele, such as Interstate 80 across sparsely-settled northen Pennsyslvania.

So how to relate this to railroading?

Consider this: The decline of the everywhere-to-everywhere rail system which dominated surface transportation in the United States in the years 1890-1945 came about in large part because the state chose to subusidize the competition by providing a right of way and, in some cases, outlawing the most brazen forms of price competition (sometimes referred to as "umbrella rate-making"). The railroads also had to deal with stronger labor unions and a greater burden of taxation on their immovable property in urbanizaed areas; the complete strangulation of the lighterage/carfloat operations in New York harbor, and the re-birth of some of it as containerization is the most prominent example.

We're currently down to seven major rail systems in North America, but with a few exceptions, the area between the Appalachians and the Rockies is flat, and has a number of abandoned railreoad grades. Futhermore, even a couple of major transcontinental-route mountain passes (Raton and Tennessee in Colorado, Saint Paul in Montana, and the former PRR Low Grade Branch in Pennsylvania) are abandoned or underused, and entrepreneurship in the revival of shortlines and regional routes has been underway for two decades.

In the long run, just about anything is possible if the constitutional and legal safeguards are in place to prevent expropriation of the investment once it is made. The men (and women) who will ultimately revive rail transport in America are probably more avid readers of Wired than Time.

see below:

http://blog.wired.com/cars/2008/03/roads-and-highw.html

The reality is that high fuel costs has the potential to kill the economy unless the smart people get in and do something about it. "Thinking out of the box" is very cliche. You have to understand the status quo future and by doing that, you can head off the damage. In other words, you have to do something extremely dangerous. You have to step into future disasters and avert them. The computer "nerds" are extremely good at this. Most of the rest of us are not.

Air service is only going to exist to big cities and we will be there in about 10 years. Lufthansa has trains as "flights" and I think that this concept will allow a smart airline to continue to reach its customers without having to fly all over the place. 2010 is when the American domestic market opens up, but this is going to force the American carriers to protect their main markets. When the fighting ends, a lot of air service will be gone.

Subsidized mass transit is also going to start collapsing. The cost increases are eroding budgets and the falling home values are hurting tax revenues. The shock therap may result in a society that is ready for rail service.

The GAO has just released a new report: SURFACE TRANSPORTATION
Restructured Federal Approach Needed for More Focused, Performance-Based, and Sustainable Programs

As you might expect, it's a pretty dull read, but there are some conclusions in the report that should be pretty obvious to anyone who studies transportation issues. For instance (emphasis added):

Many federal surface transportation programs do not effectively address identified transportation challenges such as growing congestion. While program goals are numerous, they are sometimes conflicting and often unclear—which contributes to a corresponding lack of clarity in the federal role. The largest highway, transit, and safety grant programs distribute funds through formulas that are typically not linked to performance and, in many cases, have only an indirect relationship to needs. Mechanisms generally do not link programs to the federal objectives they are intended to address, in part due to the wide discretion granted to states and localities in using most federal funds. Furthermore, surface transportation programs often do not employ the best tools and approaches available, such as rigorous economic analysis for project selection and a mode-neutral approach to planning and investment.

Well, duh.

We can all see that a major reordering of our American economic paradigm is beginning and naturally, there is some unease about the future. Climate change is happening--we might argue about the cause, but it's pretty obvious that it's a bad time to be a polar bear. Consumer prices are rising, supplies are shrinking and petro-politics is de-stabilizing the world's peace and our national economic order. The majority of Americans seem to be asking for "change" in the political and economic order, although we're far from consensus on the meaning of "change". Just as the oil shocks of the 1970s ended Detroit's dominance in the auto industry our current problems will create new solutions that will change the way we go about our lives.

There are plenty of regions where the best and most sensible answer to our transportation problems would be a good (or even mediocre) rail system. The cities and states that can't build efficient transportation systems will suffer while regions that offer good transportation options will thrive.

RussNelson wrote:Mmmmm..... look at how quickly electric trolleys came to American cities. Every city with more than 50,000 people had a trolley 100 years ago. I'm not predicting that trolleys will come back. I'm predicting that some overlay technology like the RUF will be implemented. But it will only take ten to twenty years before it's widespread.

Looking at this page: http://hometown.aol.com/metrafan/internn.html which is a listing of New York and New Jersey interurban railroads (and it's limited to *inter* urban electric railroads), I looked at the start dates of each of the interurbans. Ignoring the "one built per year" at the beginning and end, interurbans were built from 1894 to 1908. That's a span of only 14 years.

As far as I can tell, none of these were built or funded by municipalities, counties, states, or the federal government. If you look to government for our salvation, I fear you will only find failure.

It's also interesting to note the end date of most of those interurban systems, too. Most systems failed in the late 1920s or early 1930s, during the Great Depression, and most systems only operated for 25-30 years at the maximum. I don't think you'll attract much private capital with a "track" record like that. When even potentially profitable enterprises, like LA to Las Vegas HSR are struggling to find investors, I doubt a Rochester to Syracuse prospectus is going to attract much private investment.

Looking at the linked map, it's a shame that the entire network wasn't somehow combined, maintained and operated as an integrated network. Here in the Puget Sound region we're spending billions to replicate a system that we had in place and operating until the Great Depression. But during the 1930s, private wealth couldn't afford the losses of such an enterprise and the government wasn't yet in the business of subsidizing mass transportation, except to build roads.

But you are right about the quick implementation possible for some rail lines. Here in Seattle the 1.3 mile long South Lake Union Streetcar was built and open for business in just over 2 years. However, our 16 mile light rail line from downtown Seattle to SEA airport was approved by voters in 1996 and is scheduled to open for business in late 2009, although the final leg to SEA won't open until 2010. So in some cases a system can be built quickly, but some projects will be harder to complete.

Vincent wrote:But during the 1930s, private wealth couldn't afford the losses of such an enterprise and the government wasn't yet in the business of subsidizing mass transportation, except to build roads.

I'd point out that it was the roads, with people's private investment in automobiles, which killed the trolleys. The problem wasn't that private wealth couldn't afford trolleys, it was that private wealth couldn't compete with their own wealth when taken by government and spent on competing systems.

That said, it's pretty clear that, for the time, automobiles were a better technology than the combination of horse carts and trolleys. My question is why we don't have an even better technology than personal automobiles. The USDOT looked into dual-mode transport in the mid-1970's and didn't follow-through on its promise.

For a bunch of reasons, we need a system like the RUF which uses one guideway system to transport minibusses, freight, and personal automobiles. Plus it's compatible with the system of roads, so it can be built in stages, obsoleting roads simply because it's better.

Here's a bunch of reasons why I think the RUF is more competitive with roads than are standard rails (the RUF guideway is arguably a special type of narrow gauge, since it relies on two metal rails):

• Vehicles are privately owned. This is major, since NOBODY and NO STATE is wealthy enough to own every vehicle.

• Overlay. It doesn't replace roads and personal vehicles.

• Overhead. Except during construction, it doesn't increase congestion like (e.g.) the Hiawatha Light Rail in Minneapolis has priority at traffic lights and forces cars to wait longer

• Public transport via mini-busses is included in the design. So, rather than having trolleys which can only stop along its tracks, the mini-busses can leave the guideway and pick up passengers off-system

• Single-seat transportation. Whether by private vehicle, or by being picked up at your door or a bus stop, you have a single seat all the way.

• Freight vehicles, transporting within the system, need no driver. Since people are the major operational expense of any system, this promises to greatly reduce the cost of transporting goods.

You may wonder why the RUF isn't in your neighborhood if it's so wonderful, and the answer is simply "money". We aren't yet at the state where automobiles are so expensive that alternatives are being considered. (Same applies to standard-gauge trains, too, by the way). The current cost of gas is almost twice what it "should" be if you took away the war risk premium. No sane person is going to invest in replacing the personal automobile if gas could become cheap (relatively) again.

The days of cheap fuel are dead. The war risk premium will be replaced by E-Bay style auctioning soon, since the amount of fuel in demand will soon exceed the production capability of the oil fields.

A lot of conventional rail service leads to high speed rail service. This is not the type of thing in which it is wise to skip steps. You can't go from no rail to high speed rail. In addition, it has to be cost effective. Many of the American high speed rail programs require too high of a fare to be useful. In addition, a private high speed rail system has to have NO GOVERNMENT MONEY OF ANY KIND! If the government puts in, they are going to want a say and that can hurt your project. FOX in Florida was killed by all of these factors.

If you can't do conventional rail for profit, high speed rail isn't going to get done. The conventional rail is less complicated, faster to start up, cheaper to run, and cheaper to ride. You cannot build an infrastructure intensive operation for just business travelers only.

Walk before you run i guess . the downeaster is prove of whats possible without high speed service . would be great to see more services like that start up .
or thruway services .

We are in agreement on this, Mr. Benton, but I suspect that even assuming that the states show a renewal of enthusiasm for 403(b) plans (locally subsidized service), building a fair-szed volume of new equipment might be a challenge.

Pullman indicated a number of years ago that It didn't have any interest in returning to the railcar field, Colorado Railcar isn't that big. That would appear to leave only Canada's Bombardier and any overseas manufacturers that might show interest -- not an impossibility given Amtrak's electric loco purchases involving ASEA/Brown Boveri.

One "off the wall" possibility which intrigues me is Renton, Wash.-based Pacific Car and Foundry, commonly known as PACCAR. This firm was a traditional freight car builder for many years, but gravitated to heavy-duty trucks since the late 1970's -- right about the time the bottom dropped out of the domestic railcar market. It currently manufactures the Kenworth and Peterbilt lines highly regarded by North American independent truckers, but perhaps a swing back in the other direction might be in order, given the new energy picture.

A type of railbus ?would need to be beefed up to meet fra standards , but certainly doable . would need to be able to mu .

David Benton wrote:Walk before you run i guess . the downeaster is prove of whats possible without high speed service . would be great to see more services like that start up .
or thruway services .

I think there are many US lines where a European type rail car (such as the one I saw in France last summer - see thread Noyelles) would revive service with comfortable light weight trains. But as you say the Rules would need to be changed.

Good speed is necessary, but it doesn't have to be High Speed, except for longer distances.

From what ive read on here , its unlikely the fra would change their standards anytime soon .
Perhaps then , the way for Amtak to head is a lightwieght locomotive , pulling one or 2 cars .