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(continued from last week's blog about the relevance of railroads today)
Now let’s move on to economic relevance. Here the railroads shine more in the handling of freight rather than of passengers. In all passenger modes currently available for rail, no proven model makes passenger rail economically viable as a stand-alone entity. But if you take the economic benefit of having the option to ride passenger rail to all the places and events that benefit from having customers, providing housing, and possessing a viable workforce, then passenger rail also starts to shine. In my opinion, the economic benefits of freight rail are just more straightforward. First, moving long trains of commodities and goods by rail takes thousands of trucks off the highways (refer to environmental relevance). Highways just wouldn’t be capable of moving this volume in their current North American configurations. Second, only barges and marine freighters can carry larger bulk freight than railroads. I don’t think Boeing could move its giant aircraft parts by truck, although I may be wrong. Rail serves nicely, however.
Third and most important, railroads move all this heavy freight, for the most part, on their own rights of way. Critics of railroad profits will immediately point to joint terminal operations and public improvements funded by government, but these are just a drop in the proverbial bucket when compared to the total capital budgets and value of infrastructure of the freight railroads. Yes, many railroads of today started out with government incentives, but that was mostly government land that was valueless (back in the 19th century) without the railroads.
Last, but not least, there is commercial relevance, which I see as distinctly different from economic relevance. The economy is the big picture, the wrapper on the package, and the ribbon that ties everything else together. Commerce is the ability to transfer something from one place to another, or from the possession of one person to another, in return for gain that may or may not be economic. It is the ability to make contracts that may call for economic gain, but the value of that contract depends not just on the economy but on the willingness of the person or place to take a risk that the transaction will work. Railroads are commercially relevant in that they provide the avenue for commercial transactions, for the movement of people and goods, thereby lowering the risk for the participants. The commercial relevance of railroads, however, depends strongly on how competitive they can be in the eyes of those participants. In this way, all modes of land transport are commercially relevant, in that commerce thrives where there are choices, a fact recognized by the STB and the old ICC in determining whether certain business transactions of railroads are anti-competitive.
And now I come to a relevance that I intentionally omitted at the start of these blogs: Political relevance. The world didn’t come with lines defining things like states, countries, city limits, or even more exotic political entities like port authorities and transit districts. Human society has constructed these lines presumably to cope with orderly management of those aspects of life for which government, or at least government sanctioned entities, are responsible. To the extent that a railroad or lack of one can benefit or harm one of these political entities, railroads become political battlefields. While the US federal government has done an admirable job trying to keep the overall regulation of railroads to itself, just about every other political group wants in on how, when, where and to what level of service railroads, both freight and passenger, are deployed. Sometimes I think if railroads did not exist, the job of government would be half as hard and cost half as much. An interesting twist on relevance!
So ask me again if I can find something more interesting to write about, and I’ll probably answer in the negative. With all this relevance—and this is only a summary—railroads will never bore me. And they shouldn’t bore you.
© 2016 – C. A. Turek – mistertrains@gmail.com
(Charles A. Turek is a writer and novelist based in Albuquerque, NM. After four decades working in areas of the insurance industry related to transportation, he now writes on all aspects of American railroading. Charles is a political conservative but believes in public funding of passenger rail as a part of the federal government’s constitutionally conservative obligation to provide for defense and public infrastructure so that private enterprise may flourish.)
