The Corporate Deathwish of American Railroads
The Class I railroads, the biggest, baddest dogs in the junkyard, don't care if passengers are inconvenienced. They don't care that fewer businesses are served. They don't care that their industry is shrinking.
The American railroad industry has a corporate deathwish. I wouldn't mind so much if they were only offing their evil selves. Unfortunately, they're taking the rest of us humans down with them. Burn down the planet so long as they make a short term profit.
Their core problem is that they only look like they're profitable. Running a railroad efficiently and effectively doesn't make a profit. They make money hand over fist by holding monopoly on a territory and keeping others out. They also make money through corporate stocks, bonds, and tax subsidies, and more.
How Did Those Soulless Corporations Drag Us Straight to Hell?
No brand new, never before seen railroads have been allowed in the United States since 1890.
Despite that legal barrier, railroads continued to grow until between 1924 and 1929 reaching 429,054 track miles.
From 1929 to 2006 US track mileage fell, a 77 year decline, down to 162,056 track miles.
They oppose passenger service, not only on roads they own but on any other railroad connected to their freight service.
Governments have the ability to marshal vast amounts of money to upgrade their privately owned system as well as build brand new government roads.
But the Class I railroads don't want additional investment from the government, even if they don't have to pay the money back. They'll stand in the way of high speed rail, mag-lev, electric freight shuttles, or any other improved transport.
The lowest volume, lowest profit areas of a major rail system get the least reinvestment. Once that area is sold off as a shortline the newly created road can only pay their operating costs but not their major capital costs.
http://tcbmag.com/news/articles/2017/june/short-lines,-big-problems
Their deathwish downside is the potential disappearance of all American railroads by 2053.
If that decline in track mileage starting in 1929 had continued going from 2006, with 162,056 track miles, then within 47 years, by 2053, there would be no more functioning freight railroads in the United States.
For some reason the statistics show the decline stopping in 2006 and track miles even increasing. Why the stabilization from 2006 to 2014?
https://www.railserve.com/stats_records/railroad_route_miles.html
All my interviews, all my reading, all of our lawyers and investors couldn't get our group past this 124 year old blockade.
We want to buy the shortline railroads being offered for sale by CSX Transportation. Our plan includes running both passenger service as well as freight service in the same organization and contracting with Amtrak for oversight. Management would be done by the workers themselves.
CSX gives the appearance of selling shortlines. But really, they want to hang on to ownership.
They have a clever method of diguising outsourcing. By retaining passenger easements, no new owner can get government money to expand passenger service or improve freight service or anything else.
If long term freight is so profitable then why did CSX decide to sell off those pieces of the company? From 2006 to 2016 CSX fired workers, mothballed locomotives, destroyed service, and drove the company toward some delusional, self cannibalizing, 60% profit ratio.
Then in 2017 they hired the turnaround king cum robber baron E. Hunter Harrison. He put that same program into overdrive to the degree that customers were walking away and those who remained were repeatedly complaining to the railroad regulator, the Surface Transportation Board. The STB simply forwarded the shippers complaints to Congress.
In the past, when there's a downturn in the economy other roads have probably done the exact same thing as CSX's leadership. Is it like that in the rest of the US railroads? There are so many museum locomotives probably because dead and dying railroad corporations had stored engines waiting for an upturn in the economy that never came.
If ruthless turnaround kings have succeeded in creating long term profits then there's no reason to sell off portions of their business. But those economic criminals don't create long term profits. They only cut costs. The problems of missing, experienced workers and broken machinery, pending lawsuit settlements and more, occur later. Those chickens come home to roost after the company or portions of the company have been sold.
With CSX their core business will continue to look profitable, but the new, outsourced roads will absorb hidden costs and have to deal with a decade, or more, of capital under-investment. Based on shortline roads that were created in the 1980's all these new shortlines will probably go out of business within five years of their creation.
Say goodbye to union jobs with decent pay and benefits. Say hello to isolation of travelers, towns, and tripling or even quintupling of transport costs for businesses formerly served by those roads.
Our organization can imagine running things well on a newly purchased shortline but that can't happen if there's no major government investment. And what good is it to make a fragile, skinflint, paper profit, if passenger service as well as freight service aren't upgraded and the surrounding economy improved?
Here's What We Want Instead
How about making rail transport the first choice as the least polluting, lowest cost form of transport for goods and services? Do they especially care about lowering the cost of food transportation? What about making rail transport lower cost and more convenient for exporting goods from the United States? How about making railroads a convenient, reliable, low price option for passengers? Move both their individual cars and the people? Integrate heavy rail and light rail so people can work or get and education further from home? How about covering their own derrieres by making their railroads safer for workers, passengers, and communities? Why do they call them bomb trains when they're carrying frack oil and petroleum products?
None of those things above are part of the railroad owner's short term business plans. If you look closely you'll find some very wealthy families behind those limited liability corporations. Their wealth is inherited. That money isn't from some imaginary, innovative entrepreneur, installing new technology, finally running their companies with some new found efficiency and effectiveness thing that someone did within the past 50 years. No. Their wealth comes from the criminal behavior of some robber baron from around a hundred and fifty years ago.
The Class I railroad owner/management operates as an upper class street gang that doesn't have to do much to rake in the money without too much work. No application of money towards new technology, no major renovations of existing capital, constantly cutting employees, raising rates, lengthening trains, and getting rid of low profit or unprofitable lines, and charging rent for storing delayed trains, despite those things being caused by the railroads themselves. Oh, and continue to pay the vigorish to the elected officials.
Which Criminal Cabal Do You Prefer?
Writers keep implying that rail transport is one third to one fifth the cost of truck transport. Despite having everything going their way the railroads are shrinking. The US population is higher and much more dense than in 1890. US manufacturing has expanded tremendously, as imports and exports have expanded. All manner of transportation needs should have been enhanced by railroads in combination with highways, autos, buses, and trucks.
So how come the railroads are shrinking? Auto companies did lots of damage to public transport but that wasn't enough. The railroad companies themselves don't mind being whittled down so long as they can look profitable.
So we see large businesses being predated upon by even larger businesses. Business customers elicit little sympathy. Given lower transport costs there's no rule that they would share the benefits with consumers.
The squeezed businesses don't talk about or think about involving the public. If they were willing to share with the public instead of grabbing all the imaginary profits for themselves, they might improve things for everyone. But no.
Taking on the railroad corporations means looking at the possibility of getting price squeezed further, or having their business denied or disrupted. They look at the cost of attempting to outbid the Class I cabal in cash loyal Congress. They think of a public campaign against the roads. But that means getting the public to support them. Inviting in the public in a fight for fairness means a possible demand by the public for fairness, back. So the squeezed businesses are successfully blackmailed because they don't want to come clean.
There are no good guys in this rat cage.
So what's in it for me? That's the mentality of private, for profit companies. Businessmen have run up against this wall before. With a dedication to profits, i.e., plunder, they started looking for easier ways to make money and easier marks.
Better Roads and Gardens
We need public input and participation to demand sharing of infrastructure investment benefits. Shrinking roads, archaic technology, and destruction of our environment are the results of this system.
It wouldn't be so bad if it was just those nasty businesses flushing themselves down with their deathwish. Unfortunately, they're taking all of us with them.
Let's turn some of those trillions in myth money that saved the big banks into real money to save ourselves and our planet.
Someone reading this is part of the 1,365 who have enough interest to do the research, or focus on this situation, and persuade the money and power people to address this problem.
Numbers
The number of major freight transport railroads have shrunk from approximately 132 in 1900 to 8 in 2014.
Railroad track mileage fell from 1929 to 2006, railroad employment fell from 1947 to 2006. From 2006 to 2014 track mileage and rail employment stayed approximately the same, even growing, slightly. I agree with the employment numbers but I'm suspicious of the track mileage report I suspect that many miles of roads have been de facto abandoned despite being de jure in use.
Below is one writer's explanation of the stability of railroad employment.
According to Cory Cramer, September 10, 2018, Tracking How Far They Fell: August Service Sector Edition.
https://seekingalpha.com/article/4205367-tracking-far-fell-august-service-sector-edition
The Class I railroads, the biggest, baddest dogs in the junkyard, don't care if passengers are inconvenienced. They don't care that fewer businesses are served. They don't care that their industry is shrinking.
The American railroad industry has a corporate deathwish. I wouldn't mind so much if they were only offing their evil selves. Unfortunately, they're taking the rest of us humans down with them. Burn down the planet so long as they make a short term profit.
Their core problem is that they only look like they're profitable. Running a railroad efficiently and effectively doesn't make a profit. They make money hand over fist by holding monopoly on a territory and keeping others out. They also make money through corporate stocks, bonds, and tax subsidies, and more.
How Did Those Soulless Corporations Drag Us Straight to Hell?
No brand new, never before seen railroads have been allowed in the United States since 1890.
Despite that legal barrier, railroads continued to grow until between 1924 and 1929 reaching 429,054 track miles.
From 1929 to 2006 US track mileage fell, a 77 year decline, down to 162,056 track miles.
They oppose passenger service, not only on roads they own but on any other railroad connected to their freight service.
Governments have the ability to marshal vast amounts of money to upgrade their privately owned system as well as build brand new government roads.
But the Class I railroads don't want additional investment from the government, even if they don't have to pay the money back. They'll stand in the way of high speed rail, mag-lev, electric freight shuttles, or any other improved transport.
The lowest volume, lowest profit areas of a major rail system get the least reinvestment. Once that area is sold off as a shortline the newly created road can only pay their operating costs but not their major capital costs.
http://tcbmag.com/news/articles/2017/june/short-lines,-big-problems
Their deathwish downside is the potential disappearance of all American railroads by 2053.
If that decline in track mileage starting in 1929 had continued going from 2006, with 162,056 track miles, then within 47 years, by 2053, there would be no more functioning freight railroads in the United States.
For some reason the statistics show the decline stopping in 2006 and track miles even increasing. Why the stabilization from 2006 to 2014?
https://www.railserve.com/stats_records/railroad_route_miles.html
All my interviews, all my reading, all of our lawyers and investors couldn't get our group past this 124 year old blockade.
We want to buy the shortline railroads being offered for sale by CSX Transportation. Our plan includes running both passenger service as well as freight service in the same organization and contracting with Amtrak for oversight. Management would be done by the workers themselves.
CSX gives the appearance of selling shortlines. But really, they want to hang on to ownership.
They have a clever method of diguising outsourcing. By retaining passenger easements, no new owner can get government money to expand passenger service or improve freight service or anything else.
If long term freight is so profitable then why did CSX decide to sell off those pieces of the company? From 2006 to 2016 CSX fired workers, mothballed locomotives, destroyed service, and drove the company toward some delusional, self cannibalizing, 60% profit ratio.
Then in 2017 they hired the turnaround king cum robber baron E. Hunter Harrison. He put that same program into overdrive to the degree that customers were walking away and those who remained were repeatedly complaining to the railroad regulator, the Surface Transportation Board. The STB simply forwarded the shippers complaints to Congress.
In the past, when there's a downturn in the economy other roads have probably done the exact same thing as CSX's leadership. Is it like that in the rest of the US railroads? There are so many museum locomotives probably because dead and dying railroad corporations had stored engines waiting for an upturn in the economy that never came.
If ruthless turnaround kings have succeeded in creating long term profits then there's no reason to sell off portions of their business. But those economic criminals don't create long term profits. They only cut costs. The problems of missing, experienced workers and broken machinery, pending lawsuit settlements and more, occur later. Those chickens come home to roost after the company or portions of the company have been sold.
With CSX their core business will continue to look profitable, but the new, outsourced roads will absorb hidden costs and have to deal with a decade, or more, of capital under-investment. Based on shortline roads that were created in the 1980's all these new shortlines will probably go out of business within five years of their creation.
Say goodbye to union jobs with decent pay and benefits. Say hello to isolation of travelers, towns, and tripling or even quintupling of transport costs for businesses formerly served by those roads.
Our organization can imagine running things well on a newly purchased shortline but that can't happen if there's no major government investment. And what good is it to make a fragile, skinflint, paper profit, if passenger service as well as freight service aren't upgraded and the surrounding economy improved?
Here's What We Want Instead
How about making rail transport the first choice as the least polluting, lowest cost form of transport for goods and services? Do they especially care about lowering the cost of food transportation? What about making rail transport lower cost and more convenient for exporting goods from the United States? How about making railroads a convenient, reliable, low price option for passengers? Move both their individual cars and the people? Integrate heavy rail and light rail so people can work or get and education further from home? How about covering their own derrieres by making their railroads safer for workers, passengers, and communities? Why do they call them bomb trains when they're carrying frack oil and petroleum products?
None of those things above are part of the railroad owner's short term business plans. If you look closely you'll find some very wealthy families behind those limited liability corporations. Their wealth is inherited. That money isn't from some imaginary, innovative entrepreneur, installing new technology, finally running their companies with some new found efficiency and effectiveness thing that someone did within the past 50 years. No. Their wealth comes from the criminal behavior of some robber baron from around a hundred and fifty years ago.
The Class I railroad owner/management operates as an upper class street gang that doesn't have to do much to rake in the money without too much work. No application of money towards new technology, no major renovations of existing capital, constantly cutting employees, raising rates, lengthening trains, and getting rid of low profit or unprofitable lines, and charging rent for storing delayed trains, despite those things being caused by the railroads themselves. Oh, and continue to pay the vigorish to the elected officials.
Which Criminal Cabal Do You Prefer?
Writers keep implying that rail transport is one third to one fifth the cost of truck transport. Despite having everything going their way the railroads are shrinking. The US population is higher and much more dense than in 1890. US manufacturing has expanded tremendously, as imports and exports have expanded. All manner of transportation needs should have been enhanced by railroads in combination with highways, autos, buses, and trucks.
So how come the railroads are shrinking? Auto companies did lots of damage to public transport but that wasn't enough. The railroad companies themselves don't mind being whittled down so long as they can look profitable.
So we see large businesses being predated upon by even larger businesses. Business customers elicit little sympathy. Given lower transport costs there's no rule that they would share the benefits with consumers.
The squeezed businesses don't talk about or think about involving the public. If they were willing to share with the public instead of grabbing all the imaginary profits for themselves, they might improve things for everyone. But no.
Taking on the railroad corporations means looking at the possibility of getting price squeezed further, or having their business denied or disrupted. They look at the cost of attempting to outbid the Class I cabal in cash loyal Congress. They think of a public campaign against the roads. But that means getting the public to support them. Inviting in the public in a fight for fairness means a possible demand by the public for fairness, back. So the squeezed businesses are successfully blackmailed because they don't want to come clean.
There are no good guys in this rat cage.
So what's in it for me? That's the mentality of private, for profit companies. Businessmen have run up against this wall before. With a dedication to profits, i.e., plunder, they started looking for easier ways to make money and easier marks.
Better Roads and Gardens
We need public input and participation to demand sharing of infrastructure investment benefits. Shrinking roads, archaic technology, and destruction of our environment are the results of this system.
It wouldn't be so bad if it was just those nasty businesses flushing themselves down with their deathwish. Unfortunately, they're taking all of us with them.
Let's turn some of those trillions in myth money that saved the big banks into real money to save ourselves and our planet.
Someone reading this is part of the 1,365 who have enough interest to do the research, or focus on this situation, and persuade the money and power people to address this problem.
Numbers
The number of major freight transport railroads have shrunk from approximately 132 in 1900 to 8 in 2014.
Railroad track mileage fell from 1929 to 2006, railroad employment fell from 1947 to 2006. From 2006 to 2014 track mileage and rail employment stayed approximately the same, even growing, slightly. I agree with the employment numbers but I'm suspicious of the track mileage report I suspect that many miles of roads have been de facto abandoned despite being de jure in use.
Below is one writer's explanation of the stability of railroad employment.
According to Cory Cramer, September 10, 2018, Tracking How Far They Fell: August Service Sector Edition.
https://seekingalpha.com/article/4205367-tracking-far-fell-august-service-sector-edition
"I took a pretty hard look at railroads this month, especially given CSX's strong performance since I wrote about it. I included Norfolk Southern (NSC) in my research even though I hadn't written about it, and it had very similar performance to Union Pacific, while CSX has been performing exponentially better. What made me curious about the stocks was how different they behaved during the past two recessions. (During one they fell early, and during the other, they fell later along with the wider market.) Eventually, the best hypothesis I could come up with was that the rise of fracking in the US beginning in about 2005 may have shifted the dynamics of the rail industry and linked their prices more closely to oil and commodity prices in general than to the wider economy. This would also help explain the dive railroad stocks took in 2015 after oil prices collapsed.
One of the things I like about these tracking updates is that I can loosen up a little bit and just let readers know what I'm researching and thinking about without having to make fully researched and bullet-proof theses with solid conclusions. So, let it be noted that this is more about what I'm currently examining than it is a solid conclusion that I've arrived at regarding railroad stocks."
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