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To: Alberta's Child
"Railroads have been among the most heavily-regulated industries in the history of the United States (for a number of reasons), which explains why an agency like the Federal Railroad Administration even exists in the first place."

Which explains why the business of railroading is barely fiancially sound.

Why track right of ways are abandoned monthly and turned into bike and walking baths.

Why we have become some dependent on foreign oil to move goods via truck versus railroad.

The list can go on and on how the unconstitutional governmental regulation of private business has nearly destroyed it.

The same thing is happening the airlines.

The unconstitutional governmental mandate requiring the airlines to fund the the installaton x-ray machines in baggage handling areas, taking their property for public use without just compenssation, is nearly bankrupting the industry. (US Air and United Airlines are on the financial ropes)

6 posted on 03/10/2005 5:35:25 AM PST by tahiti
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To: tahiti
Both the airline and railroad industries underwent a deregulation process in the 1980s. The deregulation of the railroads actually started in 1976, and culminated with the Staggers Rail Act of 1980. The primary reason for the financial difficulties these industries face has not heavy government regulation, but union contracts and pension liabilities that represent a huge cost item fot them. In this sense, the railroad and airline industries are really no different than any of the other old giant industries that have experienced similar problems over the years (mining, steel, and auto manufacturing, for example).

Railroads have an additional burden that most of these other industries don't have to deal with, and that is the enormous cost of maintaining their fixed assets (railroad lines, rolling stock, etc.). And yet despite all this, railroads are actually in better financial shape today than they have been in decades.

Why track right of ways are abandoned monthly and turned into bike and walking baths.

The abandonment of rights-of-way is not a function of declining railroad business. In fact, railroad activity as measured by railcar loadings has reached record levels in recent years. What's happening is that the railroads are consolidating their operations, closing down lightly-used lines, and running more traffic than ever but on fewer miles of track. Many of these lightly-used lines simply didn't serve any real purpose anymore. Northern New Jersey is a good example . . . many of the rail lines in that region were built to serve a market in which large volumes of coal were being moved from mines in Pennsylvania to destinations in the New York City region (it wasn't all that long ago that homes were heated by coal-fired furnaces in the basement). As coal was replaced by heating oil and natural gas over the years, the need for these rail lines disappeared.

Why we have become some dependent on foreign oil to move goods via truck versus railroad.

This is another myth. Railroads have not lost business to the trucking industry. Both industries are moving record amounts of freight today, and both of them are constrained by limitations on their capacity (lack of terminal capacity for railroads, and a shortage of qualified drivers for the trucking industry). In recent years, what we have seen is both industries orient themselves toward those types of shipments that is best suited for them. Railroads are better at moving large quantities of a product over long distances, and at moving very heavy bulk loads over short distances between specific origins and destinations (coal from a mine to a power plant, chemicals from a petrochemical plant to another manufacturing facilitu, etc.). Trucks are better suited for moving smaller quantities of finished product for final distribution, and for moving time-sensitive loads over long distances.

It's worth noting that the original Federal highway system was constructed in the 1920s specifically to provide an alternative mode of competition for shippers in the U.S. The reason for this was that the railroads often had a very harmful impact on the economy of the nation (which was why they were regulated in the first place). If you go back through the latter half of the 19th century, you'll find that most of the severe economic downturns were caused by some kind of problem in the railroad industry. A strike by workers on the Pennsylvania Railroad, for example, could bring the entire nation to a standstill, as grain from the Plains, manufactured products from the Midwest, and passengers all over the Northeast could not reach their final destinations.

8 posted on 03/10/2005 7:54:23 AM PST by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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