Railroads: The Calm After the Storm

As the United States begins the shift away from an oil-driven economy, the dawn of the Post Carbon Era, railways will play an important role in that transiition. Aviation, due to its vulnerabilty to oil depletion, will continue to be hit hard. But railways will need to make important infrastructure alterations so that they can effectively take up the slack when the airlines...

Railroads key to growth is theire pricing strength and the ability to make money on fuel increases. The fuel surcharges they charge more than offsets most of ther expense. The nation needs strong and vibrant railroads for the movemnent of large quantities of freight because the HIghways just can not accomodate it.  

The recent reports about the crop problems in Iowa and the flood problems for the railroads operating in the region have greatly exaggerated their impact on railroad profits in 2008. The news media might be excused for inflating reports of local problems into national importance in order to garner more readers, but UP executives are probably hiding behind the Midwest flood stories to keep from having...

Will railroads return to the importance level they were in 1900 when the big railroad stocks dominated the NY Stock index? If not to that level how far? Will the boom in railroad usage last? Will the convenience of truck usage overcome the cost advantage of rail freight? What will environmental rules do to increase or decrease the advantages of railroads?

    Railroads, unlike airlines and trucking firms, are able to pass along the high cost of fuel in  transportation agreements.  Below discusses this and the value to the railroads for coal transportation.