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CSX's '09 agenda includes ONE Plan overhaul

Make a good thing better. That’s what CSX Corp. is aiming to do with the ONE Plan. Since the Class I rolled out the operational planning/execution software tool in second-half 2004, the railroad has reduced train starts about 6 percent, eliminated terminal handlings, increased car velocity and cut transit time between origins and destinations (O-D) for certain shipments.

Now, the One Plan — which CSX has continued to tweak along the way — is due for an overhaul to “squeeze out a few more trains” from the network, Executive Vice President and Chief Operating Officer Tony Ingram told me during a visit to the Class I’s Jacksonville, Fla., headquarters last month.

“We have a good model and a good handle on our traffic base,” he said. “We need to revamp the plan and reset it.”

The changes will help CSX improve customer service and reduce operating costs by consolidating more trains, which will cut fuel usage; further minimize terminal handlings; and prevent train stops and transit delays.

The railroad currently is developing a new traffic forecasting strategy, and analyzing and refining data to “work out impediments for O-D pairs,” says Ingram.

“We’re trying to determine what traffic to use for the plan – from the past 30 days or what is forecasted?” he says.

CSX expects to have “good, critical numbers” by the end of the first quarter, says Ingram. For example, the revamped plan will enable the railroad to optimize traffic flows at a Cincinnati yard by programming the software to recognize the facility optimally can handle 4,000 cars while 5,000 would be too many.

The timing is right for the revision because traffic is lighter and the plan now can incorporate new federal rules governing hazardous materials shipments. In addition, the railroad has new resources (including locomotives), more capacity and historical traffic data that’s been gathered since the plan’s roll out.

Plus, traffic managers are more educated about and comfortable with the plan than they were in 2004, says Ingram.

“We better positioned now than we were four years ago,” he says. “We have better discipline in the field.”

CSX also has a better-than-average chance of advancing its National Gateway double-stack corridor between three mid-Atlantic ports and the Midwest — but for more on that, you’ll have to wait until mid-January, when my cover story on the subject comes out in the next issue. In the meantime, happy holidays.

Posted by: Jeff Stagl | Date posted: 12/19/2008

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Posted by John Licht on 12/22/2008 1:00:28 PM

Now is the ideal time to implement infrastructure and equipment upgrades requirements (Train Control, Air Brakes & Tank Car Vessel Tests). Last minutes deadlines always seem to arrive before we are ready.

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Posted by michael willis on 12/28/2008 3:05:42 PM

2009 INAUGURATION TRAIN TO ARRIVE IN WASHINGTON DC!: President-elect Obama & family will depart Philadelphia and proceed to Wilmington to pick up Vice President-elect Biden & family and continue on to Washington Union Station. This historic occasion will make for some great coffee table inauguration train books filled with full page photos. The designated railway route closely follows that traveled by President-elect Lincoln in 1861! After 50 years of massive and almost total dismemberment of the worlds largest national passenger railway network the new leadership in Washington realizes the value of passenger, freight railroads and railway infrastructure as strategic social, economic and military assets. Compare the use of railway travel on this historic occasion to the ''ROYAL TRAIN'' that Queen Elizabeth Prince Phillip Prince Charles & family use frequently for travel in the UK for family, business and matters of state.

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Posted by James Mancuso on 1/7/2009 10:19:54 AM

It's about time we got a president who recognizes the importance of both passenger and freight railroading as a vital part of the nation's infrastructure. I am glad to see that peabrained moron from Texas going. He has left this country more screwed up than when he first found it. Not only that, but here in New York State, we have Mr. Magoo for governor!

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Posted by James Swidergal on 1/7/2009 11:05:40 AM

Dear James Mancuso...I'd rather have Mr Magoo then this deadbeat,senate seat selling moron here in Illinois. What's an Illinoisan to do with an ex-governor in the slammer,and the present one on his way,maybe here in Illinois we should make it a pre-requisite that if you want to run for political office here one requires to be a convicted felon at the least...haha!

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Posted by Larry Kaufman on 1/8/2009 11:38:11 AM

How about a bit of decorum, eh, guys? The governor of NY has a serious sight problem that makes him legally blind. That doesn't appear to affect either his judgment or his ability to govern. If you are capable of using the Internet and participating in blogs, I would hope you are capable of expressing yourselves without resorting to language that demeans. Mr. Magoo was a cartoon character; I've not seen anyone other than at this blogsite referring to the NY governor as a cartoon character.

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Wanna stimulate the economy? Invest in transit

Like many economy-watchers, President-Elect Barack Obama believes the recession is going to get significantly worse before it gets better, as he said during an interview with Tom Brokaw that aired on Sunday's "Meet the Press." The good news is Obama and his economic team are formulating a new stimulus plan to infuse more money into the economy — and it likely will include funding for ready-to-go infrastructure projects.

Obama's plan calls for "making the single-largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s," as he said in a radio address last weekend.

Mr. President-Elect, meet Mr. Bill Millar, president of the American Public Transportation Association, who issued a statement yesterday regarding your stimulus plan. Bill would like to congratulate you on your support for transportation infrastructure investment ... and tell you that investing in public transit can create hundreds of thousands of jobs ... and let you know that APTA's member agencies have more than 700 public transportation projects that could be ready within 90 days of federal funding approval ... and remind you that public transit ridership is continuing to soar to record levels despite the drop in gas prices. He also wanted to mention that public transportation plays a critical role in helping to reduce our country's dependence on foreign oil and lower our carbon footprint.

So if you could, please keep all this in mind when formulating your infrastructure plan, Mr. President-Elect. The transit industry can use all the funding it can get — and, increasingly, the country can use all the transit options it can get.

Posted by: Angela Cotey | Date posted: 12/9/2008

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Posted by Joe McKinney on 12/10/2008 11:34:04 AM

When I review the web sites of transit authorities around the country I see many plans for transit improvements in existing systems, and increasingly new transit lines and capabilities in places formerly without effective mass transit. So many of these projects have been planned, surveyed, initial designs, environmental challenges, delay and delay--but highway projects seem to appear instantly. It is now time to use these transit projects as both economic stimulae and land use shaping, especially since so many of them are one type or other of "brown-field" projects, revitalizing now decaying portions of our cities and town. For example, in the Washington DC area, let's accelerate the Dulles line of the Metro (but with a tunnel in Tyson's Corner, no an El), accelerate the Purple Line in Maryland, then extend the Orange Line to Centreville, and perhaps the Green Line to the new major destination development just south of the Woodrow Wilson Bridge. An M-street Line with Georgetown service will just have to wait. New York City has the 2nd Avenue Line; Philadelphia should extend the Lindenwold Line to University City; Chicago has plenty of projects and solid direction, as do Denver, Los Angeles, Dallas, Ft Worth, and many more for sure. The Interstate Highway System served its purpose, and it funding methodology should be adapted at today's rates and needs. But few new highways are as critical as the need to eliminate highway demand by creating truly leading edge transit systems. Thanks for this chance to speak out.

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Posted by Michael Willis on 12/10/2008 3:17:38 PM

TEREX CEO Ron DeFeo supports HIGH-SPEED RAIL infrastructure investment spending in the USA! Mr. De Feo said this to CNBC "Street Signs" TV host Erin Burnett during her Wed Dec 10th 2:00pm show. "Terex applauds the infrastructure plan that President-elect Obama has discussed" Mr.DeFeo said "US has neglected its infrastructure too long"."Lets figure out what''s going to move our people". Erin Burnett asked Mr. Defeo "what is project #1? Mr. DeFeo stated very affirmatively "I''d put in high-speed rail projects between the major metropolitan markets and we''d have a 21st century way to move people, and I''d change the intermodal mentality" Guess what! A company founded in the 19th century achieved this efficiencies-of-scale very effectively-the NEW YORK CENTRAL SYSTEM RAILROAD 20th CENTURY limited accomplished this in the the 1930''s)President Eisenhouer''s gift of an infinite interstate ribbon of concrete fueled by hostile petrostates got the nation into it''s present economic condition. Since there are lots of concrete roads that have outlived their usefullness, many could be quickly converted to rail use. Tip the rails-to-trails scenario on its head and you might come up with this:(roads-to-rails/malls-to-train-stations with existing retail/empty car-dealerships-to-trolley-tram-streetcar stops).

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Posted by Peter Cooper on 12/10/2008 11:26:02 PM

We should stop bailing out the industries that got us in this mess in the first place (Auto, trucking, and airline)If we didn''t spend our consummer dollar on foriegn oil and TV''s we could buy the more expensive american stuff and then those workers could turn around and spend their money on stuff shiped by rail. If you want to save the economy raise your kids to say "please and thank you" instead of "give me" and buy train tickets instead of a new car. Our country has 250 million cars - more cars than drivers, we don''t need any more. By appropriately taxing oil, we then can raise shipping rates to cover the cost of our rail infrastructure by our selves with out massive government interfearance. Mayby we should levy a crime tax on the auto industry to cover the cost if incarcerating criminals when they use a motor vehicle in the course of a crime. Peter Cooper

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Posted by Garl B. Latham on 12/11/2008 3:55:42 PM

Does the United States need greater investment in rail-based transit options? Absolutely; but, we shouldn't stop there. Massive benefits would also be derived from the expansion of existing railway infrastructure, allowing increased movement of both freight and passengers over long distances. To continue ignoring the promise of conventional passenger train service is illogical. No matter how important true high-speed intercity operations and modern local transit services may be to our collective future - and they are, they'll still do nothing toward assisting today's freight train operators in their quest to move the raw materials and finished goods so vital to our economic well-being. Most of today's travelers would be shocked to see how fast and comfortably one could travel by train 50 or 60 (or more) years ago. The reestablishment of a comprehensive intercity railroad passenger network would help win over a new generation of riders, while reducing demand for foreign sources of energy and generating capacity necessary for the continued efficient movement of freight.

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Posted by GLen Lynch on 12/12/2008 8:42:21 AM

I have invested in BNSF and KCS so far. I hope the Obama group invests in grade crossing elimination by using overpass and underpass roads. This would speed up frieght movment.

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Posted by tom keith on 12/12/2008 3:58:51 PM

I propose taking this a step further.Lets eliminate the subsidies the truck, airline, and barge industries currently enjoy. If we truly want amtrack to work we need to build track that transports only passengers and grade separate them so we can achieve premiem speeds. How about converting some of the old right of ways from trails back to rails.

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Posted by Donald Maywald on 12/13/2008 9:47:22 AM

The idea of spending billions of dollars to improve rail transit is of itself a good approach to improving our economy and transportation systems. We must be careful as to how this investment is made. Too many transit systems, even before the current resesion were already having trouble with the costs of maintaining the systems they have. To allow more infrastructure to be built with out verifying the resources to maintain them in the long term will only increase future revenue needs that may not be availble. We need to make certain that the current FRA standards for new construction capitol are not bypassed in our rush to spend the money provided.

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Posted by Larry Kaufman on 12/13/2008 11:10:34 AM

Sorry, but the auto, truck and airline industries have not committed any criminal acts. They, like any other business, have advanced their technologies and have served markets. No customer ever was forced to use their services. The suggestion that subsidies to other modes be ended, though, is a fine suggestion. Trucks never have paid their allocable share of the publicly provided rights of way they use. Every independent study has come to that conclusion. If we throw billions of dollars into infrastructure rehabilitation without commensurate increases in user charges, we will be subsidizing motor carriers even more than at present - and will be doing positive harm to the railroads, which not only own and maintain their own rights of way, they get to pay property taxes for the privilege. This is a perfect example of why this country needs a national transportation policy. While I applaud the Obama decision to spend on infrastructure, I am disappointed that there isn't even talk of a new leadership at DOT, which means the infrastructure plan under consideration is viewed as a public works project, not as improving mobility for America. A public works approach soon becomes port barrel spending.

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Posted by Steve on 12/15/2008 6:33:58 PM

Inter-Modal Railroading is here to stay! Unless BNSF or CSX has big problems moving their goods in this financial climate, we'll survive all of this! Yeah, Federal help will! But have we heard from these big shippers about their problems?

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Posted by James Swidergal on 12/16/2008 11:26:59 AM

Great comments.. but the Obama administration will get to placing a new Trans Secy..almost sure of it, Mary Peters surely has taken the lead,I believe she's a rubber stamper..Her direction comes from her boss Chertoff and the DHS crowd. ie,TWIC,Licensing RR Conductors,elimination of those with felony convictions employed and working in and around inter-modals,etc. Obama has to adress Transportation,its the life blood of this country and perhaps the only industry left that can't be outsourced to India,China,or some third world cheap labor source. Now as far as paying for it all well like Larry said there's no government funding that built the RRs, they are privately held companies,the trucking industry gets their roadbed from fuel and tax dollars,the shipping industry gets their ports o call and some of their ships built thru govt subsidised funding, and the airlines just continue to hemmorage money because they'll just beg for another bail-out. The railroads are the only way to go and thru investing and continued support we will keep it all running smooth. At this time I just wish these carriers didn't give in to the decaying proposition that all the rest of America's industries are on that lay off bandwagon. Now is the time especially our Class 1 Carriers should stand strong and not be laying off employees(ie 60 conductors at the UP in one particular service unit, I don't have the exact total thru out the system yet) instead I would like to see these Carriers continue to hire and move on with their own infrastructure revamps and nows the time to retrain TEY personel, and America will follow a leader like that and we'll end this economic slump that we're in even if some other industry started all this crap.

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Posted by Bruce Gillings on 12/16/2008 12:14:45 PM

Want to help transit, specifically passenger rail that shares freigth rail lines or ROWs? Then make a very strong case for investing in freight rail. The best way to do that is not through government hand-outs, but through investment credits. Not the 25% the industry is seeking, but let's take a look at a 100% credit! Let freight railroads get a full, complete, 100% credit for investing in ANY sort of infrastructure project, whether it be terminal construction (the biggest issue I think) AND associated land acquisition costs; track capacity enhancements; grade separation projects; etc. Let railroads sell unused credits or create a credit exchange program. A strong, healthy freight rail industry, unhindered by an inability to invest, will in turn be able to support rail transit much more.

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Posted by Larry Kaufman on 12/17/2008 10:22:25 AM

James Swidergal: Ah, James, James, where to start. First, a minor technical point: Michael Chertoff is not Mary Peters' boss, at least not officially. She works at the pleasure of GWB and has kept her job by slavishly following GWB's ideological fixations rather than any rational transportation policy. And, yes, she's as good as gone, as quickly as her Harley can carry her back to Arizona. Yes, President-elect Obama will name a new SecDot. And this is where this Obama supporter is getting a bit concerned. All Cabinet positions except SecDot have been named. I realize some department always must be last, but considering the multi-billion dollar stimulus package under consideration, it might be nice if DOT played some role in setting the needs and priorities. Absent DOT participation, the stimulus program becomes nothing more than a huge public works program, which lends itself to becoming the same kind of pork barrel spending we've seen over the years. No one seems to be thinking in terms of mobility of freight and people. Too bad. As for the poster who wants a 100% investment tax credit, that might be nice, but it won't fly. The railroads themselves are asking only for a 25% credit and only for projects that add system capacity. We need not be greedy; plenty of others will. Remember also that railroads are privately owned businesses and do not share their facilities with competitors except under certain circumstances. Truckers do not pay their allocable share of highway costs, but they also share their rights of way with millions of other users, some of whom are an absolute menace.

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Posted by Floyd Mason on 12/17/2008 10:33:33 AM

Commuter Expansion and high speed rail will be an important part of improving America's infrastructure, but steps must be taken to ensure that permanent railroad jobs continue and are created. If we look at the model created in the 70s for commuter rail in the Northeast we see permanent professional railroad jobs that have lasted a generation and will continue. We also see a record of safety. Don't be fooled by plans to contract this work out to non-railroad employees. A public private partnership that does not include the professional railraod workers is a recipee for disaster. The employees that currently work on freight lines where this expansion will occur will be the first employees of expanded commuter rail and they will be the source to transfer the current institutional knowledge that newly hired railroad employees will learn. A plan that allows the moral hazard of awarding contracts to business friends and that excludes the current professional employees will only make a few conected firms rich at the expense of public safety. Railroad employees are the way to run a railroad, not a slickly promoted backroom deal between corporations and politicians. Floyd Mason represents professional railroad employees and has worked in the rail industry for 34 years promoting good jobs and a safe transportation system.

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Posted by Larry Kaufman on 12/17/2008 11:24:50 AM

Might Floyd Mason be a union official? His message above reads like an election campaign platform. I, too, think railroads should be operated by as highly qualified people as can be found. But I also recall that it was the operating unions that prevailed in legislation that requires that engineers and conductors must be qualified to operate trains over their assigned territories. Sorry, Mr. Mason, but you don't get two bites of the apple. Whether union or not, whether employed by contractors or directly, those who operate trains are required to be qualified.

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Posted by Paul on 12/17/2008 4:25:08 PM

High Speed passenger rail should have been here a long time ago. People have ignored the need until recently. Our nation was brought up on automobiles and the infustructure was built around people driving. The problem now is that other than the northeast, long distance travel by rail is more a novelty than a premium service. Also, you still have those who think they are too good to sit next to a stranger on a train during their ride to work. As for Obama and his big plan, I have mainly heard him talk about highway improvements more than anything. I will be surprised to see the plan because so far he has done a lot of talking with no substance to show that he actually has a map to get to where he is going. Freight railroads pay to maintain and expand their right of way. They buy their own new locomotives as well. They are publicly held companies and need to stay unregulated in order to provide better service. Most of the profits they have made over the last few years has been reinvested into thier infuostructure to provide better service and more reliable transportation. With that being said, they get pennies to host Amtrak. Passenger rail needs its own rails. The Northeast Cooridor is somewhat efficient but its till amatuer compared to passenger rail in Europe and Japan. I hope that the "CHANGE" we were promised comes and that it be for the better, especially in the form of better passenger rail.

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Posted by MICHAEL WILLIS on 12/17/2008 9:34:57 PM

A TALE OF TWO TERMINALS 95 years ago the MICHIGAN CENTRAL DEPOT opened its doors for business in Detroit on the 16th of December 1913. At 17 stories it was the worlds tallest railway station and was as impressive as Grand Central Terminal or Pennsylvania Station in NYC. Amtrak & Conrail vacated the Michigan Central in 1988 thus hastening its steady fall into ruin, but today it faces the city that turned its back on passenger rail travel still facing the entrance ramp to Interstate I-75 a thousand feet or so to its North. December of 2008, the gleaming new US taxpayer subsidized $431,000,000 North Air Terminal at Detroit Metro Airport opens, at 824,000 sq ft with 40,000 sq ft of retail space and 604 freshly minted parking spaces for the penny-pinchers price of $10/hour. The adjacent ''GROUND TRANSPORTATION CENTER'' is a bit of a deception since the air traveler finds very limited ground transport options with taxi-limousine or shuttle-buses that only go to to rental car outfits. A taxi or limo can run up to $100 one way to the northern suburbs of Detroit. Most of the (modern) worlds Airports have rail service linking them to one or more major adjacent cities. For example-Chicago, London, Paris, Rome, Berlin, Moscow, Beijing & many more cities have fast rail service inside their air-terminals thus demonstrating the total compatibility of rail & air for seamless travel.

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Posted by GLen Lynch on 12/18/2008 9:08:45 AM

Obama will find it tough to implement all that is described here. Pie in the sky. Typically most is wasted on projects that will have no benefit. Need to explore alternative power sources, yes. Need to drill for oil here and now, YES. Central planning is Russian/Socialist approach and as they have proved, does not work.

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Posted by Larry Kaufman on 12/18/2008 1:47:15 PM

Glen Lynch tries, as the Brits might say, to throw a spanner into the works. He is quick to use the dreaded "s" word: socialism, and to condemn Soviet-style central planning. That no one has suggested the U.S. follow the Soviet example or become a Socialist nation is of no consequence. After all, when one's mind is made up, why bother with facts. Socialism is a system in which the state owns the means of production, nothing more, nothing less. That the U.S. has taken senior securities of banks and insurance companies as part of a bail-out is troubling, but really doesn't equate to socialism. Pie in the sky? That one just won't hunt. It is the standard rejoinder of those who oppose but who have no real facts to offer in opposition. The fact is that our government(s) have favored trucking and aviation for more than half a century, providing them with facilities for the use of which they do not pay their full allocable share, while treating railroads for the most part as the bastard child. Had railroads been treated differently by government, perhaps pie in the sky would be the epithet used to object to massive expenditures for highways and bridges on the ground that rail handles American mobility and "wasting" taxpayer dollars on such is pie in the sky. Obviously, I believe the national infrastructure needs better care than it has been given, but as I have stated here, I think the issues and the amounts deserve more than mere epithets like "pie in the sky" and "socialism."

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Posted by Bruce Gillings on 12/19/2008 2:42:43 PM

Larry, Couldn’t disagree with you more about the investment tax credit. It is not greed to argue for a national infrastructure policy that meets our nation’s needs without having everything go through the government, and be subject to irrational decision-making (not that THAT has ever happened before…) and pork additions. The issue of open access is not relevant here: the issue is if freight railroading, which by its nature is predominantly privately owned, can remain so and meet the nation’s needs. The only way to do that is to level the playing field as much as possible relative to trucking and inland water carriers, and the make-or-break item is infrastructure. That other modes get use of a national infrastructure without paying their full share of their impact on bridges and roadways, and less tangible but real issues such as congestion (lost time) and health (cost impacts from pollution) should be the focus. I am not criticizing truckers: several of them are excellent clients of mine, and their positive impacts on our overall wealth and consumption are huge. I also find them to be very good corporate citizens, not the “bad” guys they are often portrayed to be. Rather, I am criticizing a national transportation policy that has for over 80 years hidden the true costs of distribution, thus being detrimental to our having the most efficient system; passing costs on to unwitting and ill-informed taxpayers. And, we are now seeing it has also kept us from achieving today’s new buzzword, a (relatively speaking) “green” goods delivery system. Rather than try to completely restructure our national transportation policies and funding mechanisms, which will take years, if not decades, let’s make some immediate, simple changes now that will produce results within a relatively short period of time. Railroads need an immediate mechanism to meet the land and capital costs of new terminals and right-of-way expansions: a 100% tax credit is the fastest way to achieve that.

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Posted by Larry Kaufman on 12/20/2008 10:43:07 AM

Bruce Gillings: You say you couldn't disagree more with me on the subject of tax credits. I went back and reread what I posted on the subject, then read your post. I think, and I'm a pretty fair reader, that you and I disagree only on the degree or amount of investment tax credit that should be extended to the freight railroads. As I originally said, a 100% credit would be nice, but it won't fly politically. The carriers themselves are seeking only a 25% credit and would restrict that only to investments that contribute to additional capacity. I also was pleased to see you make the distinction that truckers are not "bad guys." They are an essential part of the national logistics system and if we didn't have them we'd have to invent them. That they do not pay their full allocable share for the rights of way provided by taxpayers at large is a fact. They are only taking advantage of the laws and system created by trucking industry lobbyists and members of Congress who wouldn't know a truck from a locomotive if they were standing in the middle of a grade crossing. I do differ with you in your reference to a national transportation policy. We don't have one. DOT was created more than 40 years ago to develop one but since the first few secretaries, there haven't even been any attempts to develop a national transportation policy. And by appointing a fine man with little or no transportation background or experience as the newest SecDot, I am not optimistic that Mr. Obama will push for a national transportation policy either. That just means that more decisions will be made on ad hoc bases and that uninformed (how's that for being polite?) members of Congress will be able to posture to their hearts' content.

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Posted by James Swidergal on 12/30/2008 12:18:38 PM

Ok to the union type hype guy out there..Your unions ...well,suck. You must be some union radical or something along those lines.Your organization UTU and/or Ble are out of date and out of touch with what is going on in the rail industry. Your bickering over ancient issues the in ability to force a contract,and your good ole' boys approach to who stays and who gets fired,leave you and yours like beached whales rotting on the beach. You can't have your cake and eat it too!

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Posted by James Swidergal on 12/30/2008 12:31:59 PM

Glenn speaking of Central..ized control not working? Aren't the Carriers' themselves a centralized mono..something or other..I hope your right then..that means the Carriers' will take a tumble too! Or perhaps we need to step in and decentralize. Mostly because decentralizing works. What works here in the Midwest doesn't always work out west or east kind of theory. Also...I stand with the others posted here Qualified is qualified and that's what railroading is and should be operated by those of us who are qualified,and age should not be the determining factor.I'd rather run with most old heads because these kids ain't worth a damn. But determining qualified doesn't necessarily equate to union loyalist.

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Posted by Larry Kaufman on 12/30/2008 3:18:57 PM

I find it amusing the way some people are able to make almost any blogsite into a forum for an anti-union rant. That applies to any industry that has extensive union representation and is not restricted to railroads. I am not a member, nor have I ever been a member of a railroad union. That said, perhaps it's time that the anti-union crowd be reminded what a union is supposed to do. It is supposed to represent its members interests, negotiating and gaining for them the best wages, benefits and work rules possible. That's really the only reason unions exist. Where union wages are higher than non-union wages, please remember that the management negotiators agreed to those wages and benefits. If anyone has the photo of the union chiefs pointing guns at the rail CEO's heads, please produce it for all of our amusement. Work around unions, whether a member or not, and it doesn't take long to recognize the rhetoric. Intimidation is a favorite union word. Relations once were bad, but have been quite civil for many years. The last nationwide rail strike was 18 years ago and could be characterized as an accident as union leaders backed themselves into a corner and left themselves with virtually no option but to take their members out, relying on Congress to impose a settlement on them that they couldn't negotiate themselves. The rhetoric of anti-unionism is as silly as the anti-management rhetoric we get from union officials.

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Two small-road takes on ’09 capex

Capital expenditures sure were a hot topic last month while I gathered information from Class I chief executives for our annual “looking ahead to next year” coverage in the December issue.

Most railroads expect to spend less on capex in 2009 for obvious reasons: the recession and soft traffic volumes, which I mentioned in a Class I “outlook” article I wrote (the issue should hit mailboxes by mid-month). But I couldn’t squeeze the capex forecasts of CEOs at two regionals into a sidebar I authored for the article.

Here’s what I learned from Iowa Interstate Railroad Ltd.’s Dennis Miller and the Indiana Rail Road Co.’s Tom Hoback.

Iowa Interstate doesn’t plan to cut its capex budget for 2009 (the 550-mile regional budgeted about $11 million for ’08). The railroad will continue to spend money on infrastructure improvements and equipment as long as Iowa Interstate generates a “decent” return on the investment, says Miller.

Conversely, Hoback expects to reduce the Indiana Rail Road’s capex budget from $9.4 million in ’08 to $9 million in ’09. Yet, the 500-mile regional will spend the most it’s ever spent in its 22-year history because of two major (and separately budgeted) projects, he says.

The railroad will build a spur into a new southwest Indiana coal mine and construct an 8,000-foot siding to expand capacity between Sullivan and Dugger, Ind. — projects expected to cost between $15 million and $20 million.

On the drawing board the past two years, the projects will advance to the construction phase in 2009 because the railroad can take advantage of slower traffic and reasonable costs for certain materials, says Hoback.

“The time to do them is now,” he says.

Posted by: Jeff Stagl | Date posted: 12/5/2008

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Posted by James Swidergal on 12/30/2008 12:35:16 PM

Agreed...now is the time everything is cheaper.

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Posted by Pat on 1/5/2009 11:25:36 AM

IT APPEARS THAT THE MAINTENANCE CREW WHO IS CHARGE OF KEEPING THE TRAIN GOING HAS SOME DRUGGIES AND OTHER ILLITERATES RUNNING IT. THIS IS SPEAKING FROM PERSONAL EXPERIENCE WITH SEVERAL OF THE CREW MEMBERS.

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Posted by Larry on 1/6/2009 11:38:33 AM

What on earth is "Pat" talking about? I've reread the original blog and see nothing in it that would trigger a response about "druggies" or train crews. The numbers may be small by Class 1 standards, but the two carriers involved are doing exactly what any business must do -- investing and reinvesting in their facilities so they can serve customers and thereby make a profit for their owners. That's not really a radical position, at least not for us capitalists.

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