 |
Re: IPH up to its old (same) tricks! Abandoning SNC
Author: J.K. Trowling
Date: 03-30-2018 - 07:58
You can't separate Ellis' problems from the SNC because they are hopelessly intertwined. His zeal to play 1:1 scale trains has sucked the life out of every line in Iowa Pacific's portfolio.
That said, I'll give you my industry perspective: you don't start up a line hoping on freight to come along and pay the bills while you run a bunch of money-losing passenger trains. The tailings haul on the SNC could have worked out to provide some nice income, as long as the operator didn't have a ton of debt and overhead to service elsewhere in the company. Even if the freight worked out, any profits would have been sucked right out the door. Robbing Peter to write Paul a bad check. That's how this company has rolled for years. So short of having a business plan that actually works, there is nothing more Iowa Pacific could have done other than a lot more homework and either not started the SNC operation to begin with or waiting until firm contracts were in place to move the freight before launching operations.
That said, I'll give you my industry perspective: you don't start up a line hoping on freight to come along and pay the bills while you run a bunch of money-losing passenger trains. The tailings haul on the SNC could have worked out to provide some nice income, as long as the operator didn't have a ton of debt and overhead to service elsewhere in the company. Even if the freight worked out, any profits would have been sucked right out the door. Robbing Peter to write Paul a bad check. That's how this company has rolled for years. So short of having a business plan that actually works, there is nothing more Iowa Pacific could have done other than a lot more homework and either not started the SNC operation to begin with or waiting until firm contracts were in place to move the freight before launching operations.
