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 Post subject: Recommended railroad economics textbook?
PostPosted: Wed Mar 06, 2024 4:53 pm 

Joined: Mon Aug 23, 2004 2:28 pm
Posts: 453
Hi folks. Any recommendations for a modern textbook on railroad economics/finance?
This is just an academic interest for me. I'd be curious to find a book which addresses, preferably from a short line perspective:
1. acquisition due diligence (i.e. if you're shopping for a short line, what data do you gather, and how do you run the numbers {NPV of revenue stream for 10 years, that kind of thing}),
2. rate/price setting for customers,
3. P&L and balance sheet components.

Again, this is just an academic/educational topic for me. I am not, repeat not, looking to get into the business.

If anything, I'm curious about the dichotomy between an oft-published short line fundamental about service (you need a car moved 10 feet at 3am? No problem) vs. Class One hyper-focus on personnel costs (vs. fuel, depreciation, maintenance, etc).


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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Sun Mar 10, 2024 1:58 am 

Joined: Sun Aug 22, 2004 11:54 pm
Posts: 2384
Unfortunately, public interest in this matter peaked about a century ago; you can still get books from that era on google books or other on-line repositories.

Most of what's published on the subject today is either an academic article or a position paper; often they are narrowly focused and highly technical with all sorts of esoteric equations and jargon.

Others are thinly veiled screeds.

https://www.amazon.com/Railroading-Econ ... =8-1-fkmr1

Before going down the rabbit hole and spending a lot of money:

Try reading this, it hints at complexity and density:

https://www.ndsu.edu/fileadmin/challeyi ... _Rates.pdf

If you're still interested and want to drop a couple C-notes

See this when available:

https://www.walmart.com/ip/Railroad-Man ... 5013798145


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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Sun Mar 10, 2024 1:38 pm 

Joined: Thu May 24, 2012 1:37 pm
Posts: 2335
I am tempted tp add that he should read, and fully comprehend, the material in something like Armstrong's "The Railroad: What It Is, "What It Does" before he starts looking at anything in OR theory, capital markets, or the application of finance to various types of transportation or transportation service.

Naturally the newer editions will have much more relevant operating detail -- I haven't seen one that reflects the current PSR operating paradigm, for example, and it would be critically important to understand not only how that is supposed to work theoretically, but also the various ways in which it can be misapplied or perverted for... well, to implement or facilitate economic and financial perceptions. The person asking needs to know the best practices, and also the most expedient or short-term-cost-cutting practices, in order to figure out much of anything about how to analyze a given operation for net profitability and opportunity cost.

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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Mon Mar 11, 2024 8:10 am 

Joined: Mon Aug 23, 2004 2:28 pm
Posts: 453
Thank you both!

Quote:
The person asking needs to know the best practices, and also the most expedient or short-term-cost-cutting practices, in order to figure out much of anything about how to analyze a given operation for net profitability and opportunity cost.


For me, it's chicken vs. egg...know best practices first? Or how basic industry accounting/financial analysis works. FWIW, in general, colleges seem to teach basic building blocks...then a graduate goes out and learns industry specifics while on-the-job (at least, my BBA and MBA experience has been such).

I've been reading Trains magazine (both the business side and the enthusiast side) for decades, plus Railway Age for a few years. The former seems to have more narrative than anything else, and I have yet to find what I'm looking for in Railway Age.

I am aware that some universities (University of Tennessee and possibly Penn State) have areas of study in railroading. Perhaps they have some coursework relevant in this area.


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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Mon Mar 11, 2024 8:12 am 

Joined: Mon Aug 23, 2004 2:28 pm
Posts: 453
University of Tennessee:
https://ctr.utk.edu/training/railroad-education-training/

Penn State:
https://altoona.psu.edu/academics/bachelors-degrees/rail-transportation-engineering

Another interesting read:
https://www.nurailcenter.org/education-and-outreach/railroad-course-offerings.php

A lot of these seem to be 'hardware-oriented', i.e. the engineering side. Good, of course, but I'm curious about where/how the economic side is taught. Decades ago I got some publications from the FRA (or was it the ICC? YEARS ago), along the lines of 'so, you want to buy a railroad?'. Admittedly old publications, probably out-of-date, but with things like certain metrics (x number of car shipments per mile of track, per year), as a starting point...


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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Tue Mar 12, 2024 12:19 am 

Joined: Sun Aug 22, 2004 11:54 pm
Posts: 2384
I think you are looking more at railroad cost accounting than railroad economics.

See:

https://www.ugpti.org/resources/reports ... dp-153.pdf

https://www.stb.gov/wp-content/uploads/ ... ec2011.pdf


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 Post subject: Re: Recommended railroad economics textbook?
PostPosted: Tue Mar 12, 2024 8:37 am 

Joined: Mon Aug 23, 2004 2:28 pm
Posts: 453
Thanks, Supe!

I'm interested in looking at cost, revenue, pricing, the whole enchilada.


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