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No horsing around: Operation Lifesaver promotes crossing safety to equestrian set

When you think about the potential victim of a grade crossing accident, a motorist or truck driver comes to mind. But a horse?

Yet, a collision between a train and horse tow vehicle or trailer at a crossing often causes a horse fatality, according to USRider, which provides nationwide roadside assistance to equestrians.

So, USRider has teamed up with Operation Lifesaver Inc. (OLI) to develop a crossing safety brochure for trailer/vehicle drivers and horse-riding enthusiasts. Unveiled earlier this month, the “Railroad Crossing Tips for Equestrians” brochure can be downloaded from OLI’s ( or USRider’s ( Web site.

USRider recently studied more than 400 horse trailer accidents and determined an “inordinate number” of gooseneck trailers got stuck at crossings. Nearly all of the incidents resulted in a human or horse fatality.

Tips cited in the brochure strongly suggest tow vehicle or trailer drivers leave at least 15 feet between their vehicle and the crossing because trains overhang track by three feet; pause if they see a train because trains might be closer than they appear and it could take longer than expected for their vehicle to clear the tracks; and never assume tracks no longer are being used, even if foliage is growing between the rails.

The brochure also provides safety tips for people riding horses near or over tracks.

OLI data shows a vehicle or person is hit by a train every two hours, on average, in the United States Although horseback riders and trailer drivers represent a small percentage of people who come into contact with crossings, OLI is being proactive by working with USRider to target a safety message at equestrians.

To stay true to its namesake, Operation Lifesaver needs to keep reaching out to organizations and interest groups that might not be familiar with railroad operations at crossings — and the risks associated with trying to outrun a train or ignoring warning signs and signals.

Posted by: Jeff Stagl | Date posted: 7/22/2008

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Posted by Gary Hyser on 8/4/2008 2:21:38 PM

Great article, we need more of this kind of support for Operation Lifesaver.

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Posted by michael willis on 8/19/2008 3:06:16 PM

TOTAL GRADE SEPARATION is the only solution... People may squawk at the cost, but it must be a priority for a smooth, safe & faster flow of all surface road & rail traffic...

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The case for high-speed rail

Midwest Airlines has become the latest air carrier to announce job and service cuts; yesterday, the company said it would be slashing about 40 percent of its workforce — and those who are lucky enough to keep their jobs could be facing a huge pay cut. The reason? Skyrocketing fuel costs have the airline on the brink of bankruptcy, Midwest says, and the airline is grounding its fleet of gas-guzzling MD-80 planes.

That's big news here in Midwest Airlines' home base of Milwaukee, where we've become accustomed to the airline's affordable fares, non-stop flights to dozens of destinations, spacious seats and, of course, the baked-on-board chocolate chip cookies. Not anymore. In a few weeks, the airline is expected to announce a new fall schedule that's sure to be short a few non-stop trips. As for fares? Last month, I booked an October flight to Florida that cost $202. As of yesterday, that ticket had gone up to $584. No word on whether they'll still serve their cookies.

Airline woes draw even more attention to the need for alternative transportation options — specifically, high-speed rail, which would be highly competitive with air travel, especially between cities that are 300 to 500 miles apart. Transit proponents have been promoting high-speed rail for years — decades, even — but without funding, their vision never has been (and never will be) carried out.

On the bright side, many of those proponents believe we're closer than ever to seeing high-speed rail in the U.S. Last week, the California High Speed Rail Authority (CHSRA) announced it approved a final route for its statewide high-speed rail system, and signed off on its final environmental impact statement — the last step before the authority takes its high-speed rail proposal before voters in November. If state residents approve the $9.95 billion bond measure, the federal government will be under pressure to develop a high-speed rail matching program, CHSRA Executive Director Mehdi Morshed told me last month.

Let's hope that's how it plays out ... and that there's a domino effect throughout the country.

Posted by: Angela Cotey | Date posted: 7/15/2008

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Posted by 7B on 7/15/2008 3:42:54 PM

You just have to believe this is a very good time to be involved with passenger rail. Our government always wait's until things reach catastrophic proportions before they treat such matters with any seriousness. We are approaching that point with these high fuel prices.

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Posted by David J. DeBoer on 7/16/2008 11:16:11 AM

This is only the tip of the iceburg. Look at the economics of air travel. The major variable costs are fuel and landing fees. The short haul airlines are taking up slots that long haul carriers (once) needed. Fuel is most expensive on takeoff and landing and at less than cruise altitude. The short haul air market - even with Federal subsidy (which many receive) is not viable and will disappear. Short haul will belong to Amtrak and regional rail (we have 12 round trips on the Capitol Corridor and the Surf Line in Ca. with quarterly double digit growth and increasing % of farebox return. If I were in the longhaul airline business I would do instant through ticketing and baggage transfer with rail. Fortunately I am a retired rail guy who spent 3 yrs. in the airline biz and decided (thankfully) not to stay

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Posted by John J. Baker on 7/16/2008 4:58:43 PM

One of the problems I have always noted with high speed rail proposals, is that they always go fromcenter city to center city. The proble with this is most people don't live in the center of cities. If Hgh speed rail wants to be sucesful it need to serve the airports along with the center of cities. This would provide parking for the rail passengers and it would also be a way to compliment air travel., especially the short haul trips.

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Posted by Pondapple on 7/17/2008 10:36:20 AM

Hight Speed Rail looks better than ever. Back in the mid to late 90s, Florida citizens voted for a High Speed Rail System. The Govenor at that time decided not to respect our vote because of cost; what a mistake.

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Posted by Jack Fuller on 7/17/2008 12:21:44 PM

There is a trade-off between airline company costs [feul, landing fees, etc.] and operating and capital costs for hi-speed rail. An airline can buy lots of gas and pay lots of landing fees to $9,500,000,000 of hi-speed rail between LA and SF. And that cost is only the start. I've seen estimates for the full CA system of $20B. And this would all be borrowed money - total cost, including interest, would be $40B! Seems like once Texas proposed a $2b hi-speed system between Houston and Dallas. Southwest Airlines responded thus: we already provide service every 1/2 hour. With 2 more planes, we can fly every 15 minutes, at far less capital cost than what's needed for rail. And that was the end of the hi-speed proposal.

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Posted by Jack on 7/17/2008 1:23:34 PM

Anytime a project of billions of dollars, it tens to become a political morass and the costs become nearly uncontrollable. Many people can speculate the reasons but it generally falls on the axpayer's back. There are a number of projects that become unsupportable from a ticket cost aspect. If people's propery is condemed, the price of the property should be at a reloacte site rather than a fictious low price set by some arbitary and outdated guidelines or standards. Quick handling of necessary property acquisitions is one way to hold project costs in check. Inotherwords, politicans need to have a hands off policy and get the project done in the current generation or leass than a decade so people feel that it was benefical if they are going to get stuck for the final bill.

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Posted by Trammco on 7/17/2008 3:48:47 PM

The comment regarding routes to city centers is well taken. Beyond that, high-speed rail, at least in the east, may have to consider a hub-and-spoke system, as land acquisition along the existing Northeast corridor would be prohibitive. However, using the Interstate 81 route as the corridor spine, with branches to the cities could work. I means a two-seat or three-seat ride, in many cases, but that's what you presently have on the airlines. The whole question is time in transit and fare cost.

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Posted by Michael McGinley on 7/17/2008 8:27:50 PM

The fusion of the long-haul air market and the short-haul rail market depends on rail connetctions to airport which are lacking in almost all of North America. A lot of the short-haul flights are connections to long flights; for rail to serve this market the transfer needs to work like it does at Zurich, Charles de Gaulle, and other first world cities.

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Posted by Dave Smith on 7/17/2008 11:22:31 PM

Jack Fuller hit the nail on the head regarding HSR vs air travel. Puddle jumpers may have higher fuel costs relative to HSR, but HSR's capital costs completely overwhelm airline fixed costs. The solution I have been advocating for years is for HSR proponents to focus on freight first, passengers second. Southwest may be able to add planes for increased schedule proliclivity, but can they haul 40 or 50 UPS trailers as well?

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Posted by Larry Kaufman on 7/18/2008 10:58:53 AM

Messrs. Fuller and Smith demonstrate why this country needs a national transportation policy, the reason DOT was created more than 40 years ago, yet never has developed one. Trying to discuss capital costs vs. operating expense is a bit like debating how many angels can dance on the head of a pin. You may come up with a number, but what does it all mean? The airline industry benefits from public provision of the airports it uses, although it does pay user fees that reimburse taxpayers in most instances (and which enables failing airlines to walk away from commitments to airports with no sanctions). In our society, people are free to put a time value on various activities. They have demonstrated they will use rail when its price and service is comparable to air service. In the Northeast Corridor, Amtrak now has more than 60% of the market, although the private automobile tops both rail and air modes. When you add in the time to get to LaGuardia and from National, or vice versa, air is no more fast than even the relatively slow Acela. It is far more highly subsidized, though. California may or may not develop a high-speed rail network, but if it does, just remember that the citizens of California will have voted to tax themselves to pay the bonds that will finance the system. Floridians some years ago voted to do the same thing only a Governor with a name remarkably like our current President's chose not to proceed with the voter-approved project. As for moving freight by high speed; why? Shippers of freight make daily decisions trading off inventory costs against transit times. I highly doubt they would pay the price to move freight much faster than it now moves. High speed rail will be for moving people if it ever is developed in this country, and it will be funded by the public through their governments, as passenger service does not cover its full costs anywhere in the world. I'm sure some regulars at this blog will be unhappy that the public will get to make the decision.

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Posted by John Pawson on 7/19/2008 7:23:00 AM

The zone of applicability of "high speed rail" is severely limited by its extreme capital cost which can only be offset by tens of thousands of daily passengers and their revenues for each corridor. Look at the size of various intercity travel markets and you will see that this concept would have to be restricted to a few corridors aggregating two or three thousand rail route miles. Those largely disconected corridors do not begin to cover all of even the top 100 intercity travel markets. Thus the general case for revived rail passenger services which would take the place of fuel-costly, highly polluting air service and driving must base on tens of thousands of miles of existing rail freight lines.

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Posted by Vinay Mudholkar on 7/19/2008 8:40:10 AM

Look ahead next 30 years; high speed rail electrically powered by nuclear energy is the answer! French have done it, nothing new. As unit cost of fossil fuel goes up more economical range of HS Rail is to travel downtown to downtown.Worked Amtrak's Key Stone to 110 mph and put air-line out of business! Now on Global HS projects, building speeds; proud of it!! Hope administration listens and sees what is happening in the rest of world: Eu, China,Gulf and others.

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Posted by Dr. M.Seshagiri Rao on 7/21/2008 11:33:45 AM

A Country pays for its High Speed Railway whetehr it has it or not.

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Posted by Morrison Renfrew on 7/22/2008 10:05:13 AM

Before the enthusiasm gets out of hand check the operating cost of the Q400 turboprop vs old jets and you'll find HSR can't get near those costs. A slight reduction in airspeed translates into huge cost reductions and it can land on not much more than a parking lot.

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Posted by psa188 on 7/22/2008 10:39:39 AM

I've ridden modern trains in other countries and feel that they have a place in the United States but I�m going to have to vote against the CA high speed rail bond in November. Why? Please see the following article: Some arguments carry more weight than others. A strong argument is cost. Right now the official estimate is $40 BILLION. But of course we all know that all large infrastructure projects like the Big Dig, the new Bay Bridge, MIA�s North Terminal, will always go over budget. It�s part of the plan because, once the project is started government says �in for a penny, in for a pound� and we pay for the overruns. Note that the author is from Menlo Park, a city full of NIMBYs. Normally I�d take such article with a grain of salt, but Martin Engel makes some good points. Another problem is the route on both ends. Rather than go directly from LA to Bakersfield over the I-5/Grapevine route, for political reasons the planners routed the thing via the Antelope Vally to serve Palmdale and Lancaster. On the north end, they opted for Pacheco instead of Altamont. Why is that flawed? See this map: Going via Pacheco [the blue line] means that a future Sacramento extension will cost much more. [see cost overrun discussion above] Finally, anybody who buys those promises of $55 SF-LA tickets hasn�t checked rail fares on Amtrak�s Northeast Corridor between Boston, NY and DC. Those fares are in the triple digits. No reason not to believe the CAHSR fares won�t be at the same level or higher, unless you subsidize it big time. I can�t support CA HSR as presented in this plan.

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Posted by Scott on 7/22/2008 12:44:48 PM

High speed rail needs to be included in our national transportation policy in a way that integrates HSR with airports and highways, to take advantage of each mode's strengths. UNFORTUNATELY, California high-speed rail plan has been hijacked by the political animals on the CAHSRA board and staff. The Pacheco decision is a blatant abuse of proper choice of alignment, manipulated by Rod Diridon to favor San Jose interests. The ideal HSR system would come into the Bay Area over the Altamont, and split 3 ways: 1) through SFO and into downtown SF, 2) down to SJ Airport, and 3) up to the Oakland airport. Anybody with a map, however, would recognize that this would obsolete BART. Much of the political push to relocate HSR over the Pacheco is coming from the "BART Preservation Society". It's no coincidence that Quentin Kopp is on the CAHSRA board, since he was the main backer of the ridiculous BART-SFO overpass into the International Terminal, despite all transportation planner recommendations to the contrary. I'm all for HSR, but this plan in California is something I can't get behind. Ed Jordan quit because he was disgusted with the political influence over key decisions. I'm also disgusted.

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Posted by Larry Kaufman on 7/22/2008 1:22:30 PM

PSA188 is free to cast his vote any way he wants and based on any information or set of beliefs. He fails to tell readers of this blog, though, that the article he cites was a response to an article in the same web publication supporting the CHSA vote this fall. So, I guess we have a case of dueling experts. Yes, cost estimates of capital projects have tendency to become more costly, especially when they are carried out by government entities. As for the $40 billion estimate for California's high-speed rail network, I suspect that amount pales in comparison to what California taxpayers have "invested" and continue to spend on California's highway system. And the highway users never will contribute anything of significance to the climate change battle. I don't live in California and won't be casting a vote either way in that election, but at least there is an attempt to do something beyond a "business as usual" reaction to some of our society's more pressing problems. Having tone to the source cited by psa188, I suspect that he/she would be opposing the CHSA proposal in any event, and the dueling experts article simply game him/her ammunition for a decision already made.

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Posted by David Smith on 7/23/2008 7:53:08 PM

If I may apply Ockham's Razor to this HSR debate: Freight can move at so-called "passenger" speeds, but passengers generally do not want to move at conventional freight train speeds. Until the HSR proponents get this through their collectively thick skulls, their grandiose proposals will fall flat one after the other. (Sorry to be so blunt, but I have no tolerance for perpetual ineptude.)

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Posted by Larry Kaufman on 7/24/2008 10:38:05 AM

May I remind one and all, and especially Mr. Smith, that there was no reference to freight high-speed rail in this discussion until he injected it in a rather ham-handed attempt to set up a straw man just so it could be knocked down. Let's all hope he was looking in the mirror when he came up with the perpetual ineptitude term. Of course passengers do not wish to move at freight speeds; freight does not move at high speed, at least not as high speed is defined. High speed rail, if the U.S. ever gets it, will be to move people and it will be funded in large part by government because passenger operations do not pay their way anyplace in the world and high-speed rail is even more costly to build, maintain and operate than conventional passenger rail.

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Posted by David on 7/24/2008 9:34:33 PM

Thank you Larry for confirming my suspicions. Ask yourself this: If trucks can move at the same highway speeds as buses, and cargo planes can fly at the same speeds as passenger jets, what is so difficult about freight moving at the same speed as passengers even in the HSR debate? The AAR talks real big about "getting trucks off the highways and onto rails", yet no one there seems to realize that to do so the rail freight must move faster than highway freight to compensate for the lack of dock to dock intramodalism of trucks. Why must the rest of the world slow down to rail freight's relatively anemic speeds?

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Posted by Larry Kaufman on 7/25/2008 5:01:13 PM

Here we go again. Under the guise of a seemingly innocent question, we have the same old, same old from a well-know hater of the railroads. Let's try to educate him, shall we? If Mr. Smith only had suspicions about the movement of freight by rail and truck and the movement of passengers by rail and air, he obviously has not studied transportation operations or economics. Oh well, not everyone is equally educable. Passenger operations do mot cover fully allocated costs anywhere in the world, whether it be Amtrak in the U.S., TGV in France, Shinkansen in Japan, or any other system. All passenger systems, high speed and conventional, are subsidized to one degree or another by government. High speed passenger service, because it must be on dedicated rights-of-way, are even more capital intensive and therefore require more subidies than conventional passenger service. (Note: In this reply to "David", I am not arguing for or against public subsidies, but am explaining some very fundamental economic truths. So, no one is considering high speed freight for the simple reason that it would have to be subsidized and the railroads in the U.S. are not seeking, nor do they need, subsidies. Freight railroads do talk about removing trucks from the highways, because when all costs are in, rail is much more environmentally friendly than trucking, and because trucks use up to four times more fuel than railroads to move an equivalent amount of freight. Even with subsidized right-of-way (public highways)that allow truckers to operate more or less profitably with operation ratios in the mid-to high-90s, near $5/gallon diesel is inhibiting truckers' ability to operate profitably. As a result, truckers are turning to rail for the long haul portion of much of their business as a means of improving profitability. They do not bog down in debate over whether they like or do not like doing business with railroads. Being capitalists at heart, they do it to maximize their own earnings. Truckers are becoming some of the better customers of rail intermodal service, with J.B.Hunt, Schneider National and UPS already ranking as BNSF's three largest customers. The volumes involved are so large that it is virtually inconceivable that sufficient high speed rail capacity could be built to handle that business. Nor is there any demand for high-speed freight rail other than from one individual on this blog. Nor would the public stand for subsidies to UPS, Hunt, Schneider or any other commercial trucking line. That was a nice try, Mr. Smith, but your seeming disengenuousness not only didn't fool me, I doubt it fooled anyone else. You really have got to broaden your interests beyond the screeds from the Reason Foundation, the Cato Institute, the National Rural Electric Cooperative Association, Dick Cheney and other right-wingers. In these blogs, most of us deal with economic issues, while you continually inject political dogma into them.

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Posted by Jack Fuller on 7/25/2008 11:45:40 PM

There are many freight trains that move at Passenger train speeds. Most pig trains do. But they are on the same railroad as the 15,000 ton coal trains ... that do NOT move at Passenger train speeds. The low speed, dock-to-dock, of freight service is not caused by slow over-the-road speed, but rather, the often zero speed in terminals. Boxcars wait to be switched; pigs wait to be loaded or unloaded; trailers wait to be picked up or loaded. Speed=0. it's the tradeoff between the speed of an individual dock-to-dock truck shipment, compared with a train's ability [and need] to handle multiple shipments in a single train.

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Posted by Larry Kaufman on 7/28/2008 12:21:05 PM

Mr. Fuller is quite right. There are freight trains that run at passenger speeds, although not at what we might consider high-speed passenger service. Unfortunately, there are a relative handful of lanes where such is possible. The principal route is the BNSF Transcan between Los Angeles and Chicago. Presumably when UP completes double-tracking the Sunset Corridor, it too, will offer passenger speed intermodal service. The point is, though, that the railroads charge accordingly for such service and customers are free to purchase the level of service that meets their needs. For the benefit of one reader, this is called differential pricing.

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Posted by David Smith on 8/4/2008 2:42:24 PM

I vote that the folks at Progressive Railroading remove Larry Kaufman from these discussions, since he can't offer a single post without a personal attack on me, or for that matter those of us to the right of Fidel Castro. Let's reiterate: Right wing = pro capitalist; left wing = pro socialist. Obviously from the standpoint of political/ecomomic interaction it's better for the freight railroads to support the right and shun the left. Let me also reiterate this modal axiom: All transportation modes, sans North American railroads, have the freight and the passengers operating at the same relative speeds. There is no reason a coal train can't run at HSR speeds, other than the presumption that you wouldn't want to move 15,000 tons en masse at that speed. So break it up into 3,000 ton segments while in HSR mode. If the utilities complain, let them run their own trains over their own rails at snail's pace!

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Posted by Larry Kaufman on 8/4/2008 3:31:16 PM

Assuming this response to Mr. Smith's attack on me clears PR editor review, I am certain Mr. Smith will not like it. Mr. Smith may vote all he wants to remove me from this vehicle for sharing thoughts and ideas and commenting on the work of PR editors. Fortunately, he isn't the arbiter of what passes the test. My replies are not irresponsible political screeds as are his. I like to think that my comments are based on sound economic principles, which is why so many of my comments are longer than I would like: it takes some length to explore and explain many of the engineering and economic issues involved. Mr. Smith doesn't seem to need many words, perhaps because he constantly is offering simplistic comments. Nothing could be more simplistic than his Socialism-Capitalism syllogism. How sophomoric! On a personal level, I find Mr. Smith's attack on me to be most offensive. I am a capitalist, but reject the label of being either right or left wing. It just might be Mr. Smith, who works for an electric coop who is the socialist, as the co-ops not only borrow directly from the Treasury, they pay no federal income tax on their earnings (I know, they're distributed to members) nor are they regulated by state PUCs as are the investor-owned utilities. Mr. Smith demonstrates his almost complete lack of understanding of railroad economics in his consistent rant that rails should operate freight service at high speed passenger service levels. Right. Break up efficient 15,000-ton coal trains into five 3,000-ton trains. That would force a rate that would drive every last coal-burning utility to close except for those that could use the energy created by the wind from Mr. Smith's comments. Personal attacks? Mr. Smith is the one who has the habit of spewing ill-thought-out and ignorant views of rail economics and operating practices. I guess he would prefer it if no one responded directly, although I don't know what satisfaction that would provide. Sorry Mr. Smith, they're your ideas and you'r stuck with them.

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Posted by william cormeny on 8/16/2008 12:57:02 AM

One would think the US would follow other nations like China and India who have large populations to move great distances. One of the major problems with the US involves the stupid separation of rates for passengers and freight.The problem on the roads and in the air revolve around the overloading of routes on the basis of profit. Why not examine the utility of carrying both passengers and freight using the same locomotives?With computers and better switching networks and more sidings we could triple the rate of passengers on transcontinental routes and most long distance routes between major cities like SF and LA,Houston and Dallas,Chicago and Minneapolis, Seattle and Portland. Dropping off freight cars and picking up freight cars does not mean the end of the passenger express,it may only mean losing two or three hours.Examine the lengths used by airlines to avoid losing freight storage on their flights where they make two times as much as passenger fares. Instead of focusing on one solution,why not examine many solutions for the present routes.

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Two chemical shippers turn to their customers to help foot transportation bills

Railroads and trucking firms long have added fuel surcharges to shippers’ freight bills to compensate for diesel cost escalations. But now, with diesel prices and surcharges at record levels, two chemical shippers are passing their staggering transportation costs onto customers through their own fuel surcharges — something I don’t remember occurring in my eight-plus years of covering the rail industry.

One of the largest chemical producers, Dow Chemical Co., will implement a temporary freight surcharge of $600 per rail move and $300 per truck shipment on Aug. 1. The surcharges will apply to North American chemical, hydrocarbon and plastic customers who require Dow to absorb transportation costs.

“We must restore margins in our businesses, both through price increases and the reduction of operating costs at certain production facilities,” said Dow Chairman and CEO Andrew Liveris, who referred to the surcharges as “extremely unwelcome, but entirely unavoidable” in a prepared statement.

Chemical shipper Oxea Corp. plans to implement the same surcharges on Aug. 1 for all rail and truck shipments within North America.

The surcharge isn’t a price increase and will be eliminated when fuel prices return to “normal levels,” said Oxea executive board member Miguel Mantas.

“We have made several rounds of tough negotiations with Oxea’s transportation providers,” he said. “However, current circumstances have forced us to pass a portion of these cost increases through to our customers.”

After checking other major chemical producers’ Web sites, I couldn’t find any additional announcements about temporary fuel surcharges. However, with U.S. diesel prices at $4.73 per gallon as of July 7 — up $1.88 per gallon since July 2007 — I’m sure some chemical companies will follow Dow’s and Oxea’s lead. Perhaps a number of shippers who move other commodities by rail and truck will, too.

Posted by: Jeff Stagl | Date posted: 7/9/2008

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Posted by Larry Kaufman on 7/9/2008 3:39:55 PM

Dow Chemical's decision to impose surcharges for transportation that it has been absorbing is a seemingly reasonable decision. First, it must have determined that it has sufficient market dominance to make the surcharges stick. More important, Dow is under no obligation to subsidize its customers. The real question will be whether Dow will accord the same logic to its rail service providers, recognizing their need to make a reasonable rate of return whether they have market dominance or not. We already know that the same utilities that demand minimum service standards and lower rates from their rail suppliers decline to give guaranteed service and pay reparations to their retail customers when they fail to perform as required. I think that's called hypocrisy.

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Posted by Dave Smith on 7/9/2008 6:30:57 PM

Didn't Dow also just win a major STB ruling for it's captive locations? CSX will have to reimburse Dow millions of dollars in overcharges. It's good to see that the STB has finally owned up to the competition caveats of the Staggers Act, and this ruling will certainly end once and for all the so-called "differential" pricing. I guess with this fuel surcharge and the STB ruling in it's favor, Dow gets two Christmases in July!

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Posted by Larry Kaufman on 7/10/2008 2:25:53 PM

Never let the facts get in the way of a preconceived prejudice. Another regular at his blog obviously believes in that aphorism. No, Dow didn't just win a major STB ruling for its captive locations. It did win an STB decision that CSX charged unreasonably high rates on several commodities moving in certain lanes. This was under the STB's new small shipments rules designed to make such rate complaints more feasible by not requiring that the complainant incur the cost of designing a mythical standalone railroad, as is the case in large shipment cases such as those pursued by Mr. Smith's electric co-ops. Mr. Smith states: "CSX will have to reimburse Dow millions of dollars in overcharges." He's technically correct, as the maximum refund under STB rules amounts to $1 million in each case, and there were three cases. Somehow, and I have no axe to grind for CSX, I don't think a $3 million refund will be the make or break for the railroad. Mr. Smith, in his anti-railroad screed, also says: "this ruling will certainly end once and for all the so-called "differential" pricing." He's wrong - as usual. The Staggers Act specifically authorizes differential pricing and nothing in the Dow decision takes that away from CSX or any other railroad. A complaining shipper still must have a rate that is in excess of 180% of variable cost AND establish that the carrier has market dominance (I have read the STB decision in Dow vs. CSX, and do not agree that Dow proved the latter, but then I'm not practicing before the STB.) Then, and only then, can the shipper try to persuade the STB that the challenged rate is unreasonably high. The end of differential pricing? Only in Dave Smith's dreams. Mr. Smith ends by suggesting that because of the small shipments case and its fuel surcharge, Dow will have two Christmases in July. I wonder if Dow customers will be at all happy having surcharges assessed. They do not have a government agency to which they can complain. Dow undoubtedly is smart enough to asses fuel surcharges only on its captive customers because any customer with a choice will take its business elsewhere. Rather than two Christmases in July, perhaps Dow is setting itself up to receive lumps of coal in its stocking?

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Posted by Larry Blazynski on 7/11/2008 12:53:39 PM

1) Dupont won the cases at the STB. To do so they had to demonstrate to the satisfaction of STB that CSX in fact had market dominance for transportation of the products involved in the lanes. 2)More an more, you will see firms posting surcharges, or raising prices frequently. If as a customer you do not like that, you can take that up with your supplier to mitigate or you can find another supplier, sometimes even in a another country. Can't do that with railroads for the most part. Maybe if you are shipping from a shared assets area to an industry on PTRA or EJE. Fundamental difference is shippers raise prices to cover increased costs for energy and materials. Railroads come with increases when rates are up for renewals with no justification other than "market level." Ask the RR rep how much costs went up...labor, materials...anything but fuel which is covered with surcharges. They don't/won't say because it doesn't matter. And the rate case decisions are telling the railroads it is OK to gouge if you gouge everyone at the same level. Has nothing to do with making too much money, so you get cut back. CSX was charging Dupont rates with higher R/VC levels than they were for similar moves with other shippers. Rates were cut back to fit in that region of R/VC ratios.

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Posted by Dave Smith on 7/11/2008 10:21:04 PM

Yep, it's DuPont, not Dow that won the captive shipper case with CSX, although all captive chemical shippers stand to gain from this ruling. I do believe that the case will have far reaching impacts that will benefit all captive shippers. Montana grain shippers stand to gain millions in reimbursements since they more than any other rail shippers have borne the onus of obscenely high captive rates. So is this the end of discriminatory differential pricing? Absolutely - If the STB does it's job and follows the letter of the law.

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Posted by Michael Willis on 7/12/2008 8:38:10 AM

The time is NOW for the return of Efficient ELECTRIC TRACTION in American railways,and to think that it was highly developed at the end of the 19th century!. Look at it this way, after more than 50 years of kerosine lighting the return of the electric light bulb would be very welcome, it would mean a great savings on matches too! With the USA close to spending close to $ 1,000,000,000 (one trillion dollars)for motor fuels in 2008, Richard Branson of Virgin Railways has compared the present OIL SITUATION to the crisis of WWI & WWII combined!

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Posted by Larry Kaufman on 7/14/2008 11:24:07 AM

In his zeal to applaud the STB decision in the DuPont/CSX small shipments litigation, Mr. Smith repeats in two consecutive posts at this blog the inaccurate view that the decision in favor of DuPont means the end of differential pricing. He's wrong, which comes as no surprise to regular readers of this blog. The Staggers Rail Act of 1980 specifically authorized railroads to engage in differential pricing, which is used by virtually every other industry. Utilities (Mr. Smith's industry) charge different rates of residential, commercial and industrial users, yet a kilowatt is no different regardless of which customer buys it. They quite properly charge their system fixed costs to their various customers based on their decision as to the customers' responsibility for fixed costs. Airline customers invariably find themselves sitting next to passengers that paid different fares. That is differential pricing, as the direct operating cost of the flight is the same. It's called yield management in the airline world, but any economist can assure Mr. Smith that it is differential pricing.

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Posted by Dave Smith on 7/17/2008 11:31:19 PM

Mr. Kaufman's analogy regarding differential pricing is very misleading. Yes, utilities regularly charge different rates for three basic customer groups: Residential, commercial, and industrial. However, if the utilities copied the railroads' differential pricing scheme, they'd charge vastly different rates within those three groups. Luckily for electric consumers, the utilities are regulated by the feds and the states to prevent such obscenities.

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Posted by Larry Kaufman on 7/18/2008 9:28:24 AM

Before anyone (someone) declares flatly that differential pricing by railroads is dead, killed by the STB in the DuPont small shipments complaint against CSX, it should be noted that CSX has appealed the STB decision to the U.S. Court of Appeals, claiming that the STB decision was no supported by the evidence. I learned a long time ago not to try to prejudge the courts or to make flat statements, but the fact that DuPont, by its own admission, agreed that there were trucking alternatives to service from CSX suggests that the market dominance finding by STB will be one of the points of the appeal. No market dominance, no regulatory right to complain that a rate is unreasonably high. Sort of like in basketball; no harm, no foul. I shall wait for the court to rule before making assumptions. Others might try the same practice.

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Posted by Larry Kaufman on 7/19/2008 11:48:15 AM

For those people (one, so far) who believe the STB small shipment rate decision in DuPont vs. CSX means the death of differential pricing, it should be noted that the reduced rate mandated by the STB remains north of 300% of variable cost. Some death!

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Posted by Larry Kaufman on 7/22/2008 10:45:54 AM

In his zeal to run from the truth, one regular at this blogpost makes the statement that utility customers are lucky that utility rates are regulated by the feds and states. I am unaware that the electric rates I pay are regulated by anyone other than the state PUC in the state where I reside, and just as so-called captive shippers like to accuse the STB of being a wholly-owned subsidiary of the railroads, I might claim that the CPUC is a wholly-owned subsidiary of Xcel Energy. And, if I were unfortunate to reside outside the area served by an investor-owned utility, I'd be served by an unregulated electric co-op. Perhaps the wholesale rates of co-ops are regulated by the feds, but I can assure this defender of electric utility rate-making practices that consumers are far less protected by government than utilities are protected by the STB. The point in all this silliness is that differential pricing is practiced by the vast majority of businesses. Railroads were denied the right to engage in such pricing prior to passage of the Staggers Rail Act of 1980, and the issue was quite thoroughly debated by Congress in developing Staggers. The utility employee who posits that utility customers are lucky, also has posited in a different blog that rail use of differential pricing has been killed by the STB's DuPont small shipments decision. Aside from a real likelihood that the DuPont ruling will be reversed on appeal (from CSX) by the Circuit Court of Appeals for the DC Circuit, neither the STB decision nor the DuPont rate complaint involved an attack on differential pricing. One should be careful about using blogs for screeds. They can get one into deep water and there always is a risk of drowning in deep water.

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