Sunday, March 4, 2012

Why Plodding Is Important - Appreciating Problems Railroad Operations and Management

Why is plodding important? Much of railroad revenue comes from low value heavy products. Coal is the principle commodity carried and it is low value and heavy. It represents a disproportionate amount of railroad revenue. The revenue generated is not in proportion to the amount of effort and energy required to move it. So, a railroad assigns enough locomotive horsepower creating sufficient tractive effort  to move coal without stalling on a ruling grade.

To see what is involved in calculating the size of a locomotive required to move a certain amount of tonnage see Republic Locomotives explanation at Republic is a firm that leases locomotives.

While a large proportion of the commodities carried by railroads might be characterized as "low value," their value within the chain of production in an economy is certainly not of low value. Railroads often create indispensable, yes indispensable, time and place utility for a commodity. What is being transported might be of "low value," but the transportation service being created has great value.

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