Dual Mode usage vs. Electrification of freight railroads in the US - pros and cons

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I'm aware the report isn't perfect but over 1/2 the cost savings come from much lower operations cost of electric locos
Even with an ROI of 20-25 years thats still decent in the slow moving world of rail
You have to realize that the baseline for their ROI isn't just other rail projects, its the S&P 500 / investment market. If a railroad has a dollar in profit, they need to either reinvest it into their own business or to pay it out via dividend. The discount rate used by the shareholders of the railroads basically determines that unless your reinvestment can beat 9-10% returns per year in the S&P 500, then the railroads are obligated as a steward of their investors capital to pay it out in dividends. To make it clear, If BSNF announces their intention to electrify, they are getting sued by Warren Buffet and Berkshire that exact same day, and Buffett wins that suit and disposes of management. Essentially the formula now says to take the minimum amount to keep profits flat and to pay the rest out in dividends.

Why invest $10B into a project that returns that capital in 20-30 years when that money will double in the market in 7 years? The day this formula changes is when a RR determines that they will cease to operate without reinvestments, at which point they cut the dividend and reinvest, but almost certainly not via electrification.

The alternative is that the government does it themselves and leases the track or electricity access back to railroads serving them in a capital light model (similar to a mortgage lender who securitizes and sells off their mortgage loans to investors in order to make more loans. This is a good thing because if lenders kept all their loans on their books, you wouldn't be able to buy a home in the US because you couldn't ever find a lender with cash).

At the end of the day to tie this all back home, electrification really isn't what is holding back Amtrak's growth and improvements. Amtrak really just needs to have access to track without railroad interference that they can maintain and dispatch over themselves. Ideally they can do this by building right next to the existing freight right of way or buying the track from them outright over time. The issue Americans have with rail travel isn't that you cant go 150mph, its that you go 20mph for a good amount of the route and show up 5 hours late.
 
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And why should the taxpayers pay for an improvement that will only enrich the assets of a private company? Also, an electrified system is essentially an improvement on the railroad's property, thus increasing the value of the property, and thus the property taxes paid by the railroad. Why should a private railroad company want to do that?
They shouldn't. I am not at all suggesting that they pay for it. My point is that they wont do it, and the government wont either (unless they get the RR's to agree to pay them for using the catenary at a rate where the government sees an ROI > the yield 30 year note, and that isn't happening either.
 
They shouldn't. I am not at all suggesting that they pay for it. My point is that they wont do it, and the government wont either (unless they get the RR's to agree to pay them for using the catenary at a rate where the government sees an ROI > the yield 30 year note, and that isn't happening either.
The government supports the trucking industry by building and maintaining (sort of) the highway system. The government builds airports and the air traffic control system. Railroads are the odd man out.

One possible solution would be for the government to own the railroad trackage and related facilities and then charge the railroads for usage. I believe that was the system in Great Britain before the pandemic bankrupted the private rail operators.
 
Just make "ALL" all improvements for electrification improvements non taxable. Include CAT, Signals, rail, impeadance bonds, etc. As well any passenger train schedule improvements. ie the 2nd track improvements allowing no freight train interferrence.
I know very little about how railroads are taxed, but if our current code increases their tax bill for improvements that they make, then we need to change it immediately. These self bankrupting cities see (NYC and Chicago) run unimaginable budget deficits, and then try to use businesses to bail themselves out. Its horrible for the economy.
 
The government supports the trucking industry by building and maintaining (sort of) the highway system. The government builds airports and the air traffic control system. Railroads are the odd man out.

One possible solution would be for the government to own the railroad trackage and related facilities and then charge the railroads for usage. I believe that was the system in Great Britain before the pandemic bankrupted the private rail operators.
Well they also pay for it via gas taxes and toll roads, plus they (the gov) own the highway roads. I'm sure that the government would happily take over the railroads and maintain them through taxes and usage fees like highways, but the railroads (of course) were built privately and they aren't likely to ever walk away from something they invested so much in building. Also they likely have no interest in sharing it as they would have to follow schedules set by the rail owner similar to airline scheduling at airports.

From a passenger rail perspective, it makes sense to have a gov owned rail system, but in reality we would likely have a situation where cargo railroads rapidly go bankrupt in covid like downturns because they have no assets to borrow against in tough times. I think the best solution involves passenger and cargo rail right next to eachother but not sharing track, simply just the ROW given how challenging it would be to build straight in any part of the USA these days.
 
They shouldn't. I am not at all suggesting that they pay for it. My point is that they wont do it, and the government wont either (unless they get the RR's to agree to pay them for using the catenary at a rate where the government sees an ROI > the yield 30 year note, and that isn't happening either.
In general, the idea of government financing of "power by the hour" was debated in the post-WWII period of surplus hydroelectric capacity. The Pacific Northwest, already with major rail electrifications (and some interurbans, too) was a hotbed of interest. The debate, as best as I can recall it, got tangled up with McCarthyism. If the BPA sold power to an electric company that sold it to a railway, that was private enterprise. If the BPA sold it directly to the railways, that was socialism. With the unexpected death of U.S. Senator Richard L. Neuberger, the idea faded away.

Some samples of material cranked out in the controversy...
1951 BPA study  001.jpg
Rynerson1945.jpg
 
Well they also pay for it via gas taxes and toll roads, plus they (the gov) own the highway roads. I'm sure that the government would happily take over the railroads and maintain them through taxes and usage fees like highways, but the railroads (of course) were built privately and they aren't likely to ever walk away from something they invested so much in building. Also they likely have no interest in sharing it as they would have to follow schedules set by the rail owner similar to airline scheduling at airports.
The feds heavily subsidizes trucking
The railroads have invested very little money compared to how much they make, they make 20-30% profit because they refuse to invest money. Airlines make ~5%
They've spent the last 50 years avoiding any bit of investment and actively removing tracks. Its hard to argue they've spent a lot of money on them in the last 50.
From a passenger rail perspective, it makes sense to have a gov owned rail system, but in reality we would likely have a situation where cargo railroads rapidly go bankrupt in covid like downturns because they have no assets to borrow against in tough times. I think the best solution involves passenger and cargo rail right next to eachother but not sharing track, simply just the ROW given how challenging it would be to build straight in any part of the USA these days.
rail moves so many required goods the overall markets changes very little in up and downturns
you may get a bit more carload lumber and stone ect, during house building high points but they've given up most of that market to road
You have to realize that the baseline for their ROI isn't just other rail projects, its the S&P 500 / investment market. If a railroad has a dollar in profit, they need to either reinvest it into their own business or to pay it out via dividend. The discount rate used by the shareholders of the railroads basically determines that unless your reinvestment can beat 9-10% returns per year in the S&P 500, then the railroads are obligated as a steward of their investors capital to pay it out in dividends. To make it clear, If BSNF announces their intention to electrify, they are getting sued by Warren Buffet and Berkshire that exact same day, and Buffett wins that suit and disposes of management. Essentially the formula now says to take the minimum amount to keep profits flat and to pay the rest out in dividends.
No traditional industry has a quick ROI, an automaker building a factory is easily a 10+ year investment, even silicon fabs given their level of cost take 5-8 years to pay back and you want to keep them for 10+ years. The auto plants build in the 40-60s are mostly still around. NUMI in freemont which reused the existing build shell took 8+ years to break even.

Announcing the goal to would not result in that. Theres a strong case that their core transcon route should be under wire.
At the end of the day to tie this all back home, electrification really isn't what is holding back Amtrak's growth and improvements. Amtrak really just needs to have access to track without railroad interference that they can maintain and dispatch over themselves. Ideally they can do this by building right next to the existing freight right of way or buying the track from them outright over time. The issue Americans have with rail travel isn't that you cant go 150mph, its that you go 20mph for a good amount of the route and show up 5 hours late.
It is a major issue on busy lines like the NEC and in California, they get rolling stock that performs worse
 
Even back in the 70s and 80s the ROI on a freight mainline with annual traffic density of 20 million gross ton-mi/mi, it only took 10-11 years for them to have payed back their investment

At some point a freight railroad will want some fed help and once 1 gets a major line down the rest will follow, then amtrak may need to get funding to fill in gaps so they can run all under wires

Didn't Conrail inherit a good many PRR GG1's but rather than retain them or replace them by new electrics, they replaced them by diesels.
 
Didn't Conrail inherit a good many PRR GG1's but rather than retain them or replace them by new electrics, they replaced them by diesels.
They also had a number of more modern E44 and E33 electrics. The reason they gave up on electric and switched to Diesel was I think more motivated by the rerouting of freight trains off of the Amtrak controlled Northeast and Keystone Corridors and onto their own trackage such as the Lehigh Line. Also the ability to run the same power through electrified and unelectrified territory rather than having to change power.

One possible solution would be for the government to own the railroad trackage and related facilities and then charge the railroads for usage. I believe that was the system in Great Britain before the pandemic bankrupted the private rail operators.
That is still the system in Great Britain. Some operators ran into financial difficulty and their routes are now operated by the government as operator of last resort, others continue under private ownership.
 
Didn't Conrail inherit a good many PRR GG1's but rather than retain them or replace them by new electrics, they replaced them by diesels.
conrail was a whole mess, amtrak was increasing pricing and they didn't expand their network to important connector lines they need
GE prototype 2 new locos and they were testing GM10B and GM6c
GG1 were not really freight locos the E33 and E44 were
 
They also had a number of more modern E44 and E33 electrics. The reason they gave up on electric and switched to Diesel was I think more motivated by the rerouting of freight trains off of the Amtrak controlled Northeast and Keystone Corridors and onto their own trackage such as the Lehigh Line. Also the ability to run the same power through electrified and unelectrified territory rather than having to change power.
PC and Conrail also de-electrified their own tracks almost as fast as they could. So they literally had no use for any electric engines in short order. Amtrak actually acquired a bunch of E44s from Conrail but never really used them for anything.
That is still the system in Great Britain. Some operators ran into financial difficulty and their routes are now operated by the government as operator of last resort, others continue under private ownership.
I don't believe there is any main line trackage in UK owned by any private railroad. Only the Train Operating Companies and Rail Equipment Leasing Companies, at least some of them are still private.

But back to dual mode and electrification in the US. In the near future I only see electrification of select passenger routes and possibly some mixed us trackage. One prime candidate is the Washington DC to Richmond segment but the boss of the passenger side of that operation, DJ Stadler, erroneously believes that you cannot put catenary high enough to accommodate double stacks under them, never mind that such catenary exists all over the NEC as we speak. With such ignorance in management the future does not look very bright.

Then again, we can;t even get NJ Transit to electrify all its trackage, which they should have done long back instead of spending a King's ransom and then some on their fleet of first generation dual mode locomotives.
 
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I don't believe there is any main line trackage in UK owned by any private railroad. Only the Train Operating Companies and Rail Equipment Leasing Companies, at least some of them are still private.
As far as I know HS1 (that is the high speed line between London St Pancras and the Channel Tunnel) is still at least partially owned by a private consortium.
 
As far as I know HS1 (that is the high speed line between London St Pancras and the Channel Tunnel) is still at least partially owned by a private consortium.
It is a pretty complex arrangement between the government and HS1 Ltd. limited to period of 30 years after which it all reverts back to the government. Quoting from Wikipedia:
By May 2009, LCR had become insolvent, and the government received an agreement to use state aid to purchase the line and to open it up to competition to allow other services to use it apart from Eurostar.[43] LCR's wholly owned subsidiary, HS1 Ltd, thus became the property of the Secretary of State for Transport.[44] On 12 October 2009 a proposal was announced to sell £16 billion of state assets including HS1 Ltd in the following two years to cut UK public debt.[45] The government announced on 5 November 2010 that a concession to operate the line for thirty years had been sold for £2.1 billion to a consortium of Canadian investors.[12] Under the concession, HS1 Ltd has the rights to sell access to track and to the four international stations (St Pancras, Stratford, Ebbsfleet and Ashford) on a commercial basis, under the scrutiny of the Office of Rail & Road. At the end of thirty years, ownership of the assets will revert to the government.[44]
 
So which freight railroad is planning to acquire electric locomotives to use said electrified freight tracks?
BNSF has been testing battery electric locos currently. the FLEX drive test I believe are over but 4 EMD Joule going to be bought for southern california they are expected to be in service by 2024. There are renders of SD70J that look as if there are space for a pantograph to be added

But back to dual mode and electrification in the US. In the near future I only see electrification of select passenger routes and possibly some mixed us trackage. One prime candidate is the Washington DC to Richmond segment but the boss of the passenger side of that operation, DJ Stadler, erroneously believes that you cannot put catenary high enough to accommodate double stacks under them, never mind that such catenary exists all over the NEC as we speak. With such ignorance in management the future does not look very bright.

Then again, we can;t even get NJ Transit to electrify all its trackage, which they should have done long back instead of spending a King's ransom and then some on their fleet of first generation dual mode locomotives.
California could likely see a growth in mixed traffic sections, BNSF by moving their main yard to barstow has opened up the ability to electrify everything west of that into the LA basin which then also means areas like the new San Clemente and Del Mar tunnels could be a lot simpler without diesels there

UP has been very anti wires on their routes which is why I think the state just needs to buy a bunch of their trackage and setup a class 2 to run on it. UP like all class 1 has no interest in carload freight which california really needs to grow.

NJT like other state operators around the NEC who own trackage inability to even propose it is frustrating. It looks like MBTA may start planning needed to electrify lines and upgrade the end of the NEC with more power
 
And why should the taxpayers pay for an improvement that will only enrich the assets of a private company? Also, an electrified system is essentially an improvement on the railroad's property, thus increasing the value of the property, and thus the property taxes paid by the railroad. Why should a private railroad company want to do that?
Taxpayers pay for both improvements & regular maintenance that enrich private company assets, such as all the locks & dams construction & maintenance for the barge operators, the ports, the airport construction & maintenance, the air traffic controllers, the roads, the public parking, the maritime infrastructure from buoys to rescues, and in fact in the past century my Dad was concerned that government contracts were an ever-increasing share of income.
 
Taxpayers pay for both improvements & regular maintenance that enrich private company assets, such as all the locks & dams construction & maintenance for the barge operators, the ports, the airport construction & maintenance, the air traffic controllers, the roads, the public parking, the maritime infrastructure from buoys to rescues, and in fact in the past century my Dad was concerned that government contracts were an ever-increasing share of income.
None of those things you listed are private assets; they are all public assets.
 
Private companies that could not operate without such taxpayer-provided assets or, like the railroads, would have to pay for their construction and maintenance by themselves, are the direct beneficiaries. Millions of taxpayers never fly, never use locks & dams, etc. and so they do not even indirectly benefit.
 
The best proposal IMO is. -=

Take some older diesel units sepecially tier 1 and convert them to AC traction elecric locos For the conversion provide for them to be connected to a diesel loco. At same time convert some AC traction diesel locos to tke power from the converted electric diesels.

Operationally connect one or two diesels to each end of the electric loco. when in yards or flat land tracks operate the diesel such that it provides power to both electric and diesel traction motors. Once a train reaches a significant grade CAT is installed, and used with diesels either idled or shut off and the electric loco provides power to it and attached diesel loco(s), Back to flat track or yards reverse process. Some what as a cow and calf works. This provides for full diesel power being provide power to more traction motord eliminating the reduced diesel power under train speeds less than 0 to 9-15 MPH. Certainly gets train out of yards and stops faster.

Of course this also improves regeneration for the train now traveling down the steep slopes. As an after thought this would allow diesel locos to be built with higher HP than the present 4400 HP liimits. Then a D - El - Diesel cofiguration could be just D - E. Certainly more fuel efficient running a 6600 diesel throttle 8 instead of 2 - 3300 HP diesels as one example,
 
Maintenance

You just gave me a headache try to follow your plan. The people who have to maintain the equipment are not going to like you either.

Driving a new truck temporarily, this model has a TV screen for a gauge panel. Totally freaked out when the display show 65 mph and I was going into a 40 mph curve/ramp. Put the brake pedal down to the floor, fell the speed drop even more, but the gauge said 65 mph still. Yeah the TV locked up, and yes I did see the outside world was going very slow by, but no clue how fast I was going into that curve.

Technology and the Maintenance of said technology requires a lot of work. Simple solution are best.
 
Oddly enough Indian Railways tried some of that and decided it is not cost effective, and discontinued the program. Instead they are simply scrapping old diesels and acquiring new electrics. I think others who try it will come to the same conclusion that the overall cost of ownership such complex Javkalopes is not justifiable.
 
progress rail will rebuild or build you new any of their Joule lineup of battery locos.
now whats not clear is if EMD will build you one with a pantograph that can bypass the batteries and run under pure electric

traditional dual modes in a single carbody are a real mess and rightfully no one wants to deal with them.
 
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