Re: Increased use of railroad shipping due to the high fuel cost crisis???
Author: Harold Collier
Date: 04-04-2008 - 01:49
As others are indicating, the formula/equation to exceed the final magic number which may indicate profit/success is very complex and has many components, fuel/cost of fuel is only one of them. The equation for roads/trucking is different and has different components than that of railroading. Whilst a rise in the price of diesel fuel is felt by all, the degree is not necessarily the same. One of the components of the equation has to be the rise in predilection of the US consumer market for cheap Pacfic Rim imports, the costs of which are increasing quite steeply as the economies in that part of the world play catchup. The railroads I'm sure are looking at factoring in the decrease in this traffic as the price of the goods increase and consumption falls as a result. The US Government will no doubt be looking towards Europe as a example of how to collect extra revenue in an attempt to boost an economy that is seen by some as dying by death of a thousand cuts. Fuel prices are of the order of 2/3 times higher in Europe than the US, the main reason being excessive the taxation on it, used as a means to help prop up the Economy. The downstream increases felt by industry are merely passed onto an ever burdened consumer market, resulting in polarisation and an eventual change in direction of that market place. Predicting that direction, and its timing, is the million Dollar winning ticket. Harold.