Monday, April 11, 2011

What freight rail thinks of high-speed rail

The major freight rail operators are called Class 1 operators.  The three biggest are Union Pacific, BNSF( Warren Buffet owned) and CSX.  The freight operators own most of the railroad tracks in the United States.  Some are owned by Amtrak but those are mainly in the East and there are few of them. 

Union Pacific has made it's position crystal clear to the California High-Speed Rail Authority that it cannot accept any HSR tracks on its rail corridor and even will challenge HSR rail construction right next to its corridors, or crossing them.

The other freight carriers are somewhat less overtly hostile but, as we can see from CEO Michael Ward, of CSX, they are no friends of high-speed rail on or near their freight rail operations.

To say it again.  Passenger rail can only operate with government subsidies.  Freight rail is profitable. The United States has the world's best freight rail operations. Why should the freight rail operators tolerate the intrusion of money losing rail systems that impede their own business plans?  It's yet another example of the government willfully seeking to kill geese that lay golden eggs. 

Michael Ward minces no words.  Passenger rail doesn't make money.  That's why private investors will shun it.  A realistic look at this problem tells you that passenger rail cannot be a business proposition, and in fact can be harmful to freight rail, which is a successful business.

The freight rail operators used to be in the passenger rail business, sort of like a loss-leader.  They enthusiastically gave up the passenger side of their operations to Congress and Amtrak, thereby sticking with those parts of their business that were profitable. That makes sense. What doesn't make sense is now for the government to spend billions if not trillions on a national high-speed rail program that conflicts with freight rail on freight rail corridors.

The alternative, as we can see in California, is to build HSR from the ground up and away from the freight rail routes.  No wonder it's zillions of dollars more expensive.  And, HSR will never be able to produce a business model.  It can't.  Asking the CHSRA for an investment grade business plan is like trying to get blood from a turnip.  

That's what is so absurd.  The state legislature and everybody else keeps demanding the rail authority to produce an honest business plan with honest numbers.  Many of my colleagues and the Legislature asks the CHSRA to "do it right."

They can't.  They can't square a circle.  That's why they keep fudging all the numbers to make it look like they will build a highly profitable passenger rail system that pays for itself and even returns on investment.  And that's why there is one version after another.  That's what keeps the funding flowing from Washington; mindless, pointless promises.  What we are asking the rail authority to sign is their own death warrant.  

It's a stupid thing to do.  We should be closing this project down.  Stopping it in its tracks before it lays tracks.  Stopping it before it hemorrhages all the current funding it controls.  

When will all our elected officials wake up and smell the coffee?  Dreamtime is over. 

CSX Chief Says He ‘Can’t Be Part of’ Obama High-Speed Rail Plan

By Lisa Caruso - Apr 6, 2011

CSX Corp. (CSX) “can’t be part of” President Barack Obama’s rail vision because passenger trains don’t make money and high-speed trains don’t belong on freight tracks, Chief Executive Officer Michael Ward said.

“I’m a corporation. I exist to make money, OK?” Ward said today in an interview at Bloomberg’s New York office. “You can’t make money hauling passengers, so why would I want to do that? That wouldn’t be fair to my shareholders.” CSX is the third-largest major freight railroad in the U.S. by revenue.

If CSX were to advocate for high-speed rail, he said, “it’s then ‘why aren’t you donating part of your infrastructure to that?’ which I can’t do and be true to my obligation to my shareholders.”

While moving more people by train might make sense for society, letting passenger trains traveling faster than 90 miles per hour share tracks with freight trains doesn’t make business sense, said Ward, whose Jacksonville, Florida-based railroad owns 21,000 miles of track east of St. Louis.

Obama has made building a national high-speed passenger rail network a priority, and Congress has devoted more than $10.5 billion to the program since it was created in 2009. Obama is asking Congress to spend $8 billion on the initiative next year and $53 billion in the next six years, to connect 80 percent of Americans to high-speed rail service within 25 years. Republican opponents in Congress want to eliminate it.

Putting high-speed passenger trains on freight lines is not practical because “the curvature and the elevation of the freight rail” tracks cannot support trains operating at speeds higher than 90 mph, Ward said. Those trains should run on separate tracks, which may cost “tens of billions, if not hundreds of billions” of dollars to build, he said.

New York Dispute

CSX and New York are in a dispute over the state’s plan to provide passenger service between Albany and Buffalo with trains going as fast as 110 mph. CSX will not allow trains traveling faster than 90 mph on its tracks, citing potential damage. Railroads such as Union Pacific, the largest freight rail company by revenue, are working with states to upgrade their tracks for passenger trains traveling as fast as 110 mph.

Ward said another concern for CSX is that freight trains, which operate at 45 mph to 50 mph, may need more time to stop and pull over if passenger train speeds increase, causing increased disruption to its operations.

TheTo contact the reporter responsible for this story: Lisa Caruso in Washington at To contact the editor responsible for this story: Bernard Kohn at