Re: [Vic] Freight return to Cold stream??

[mauried@tpg.com.au (Maurie Daly)]

In article <pkQT4.30230$PL4.609076@ozemail.com.au> "Barry Campbell" <campblbm@ozemail.com.au> writes:
>From: "Barry Campbell" <campblbm@ozemail.com.au>
>Subject: Re: [Vic] Freight return to Cold stream??
>Date: Mon, 15 May 2000 20:28:49 +1000


>Mark Bau wrote in message ...
>>
>>
>>
>>Barry I agree with your comments but please reread what MD said, (sorry I
>>wrongly attributed them to GOD)
>>
>><<<They do the same work>>> Well yes, they  pull trains over rails. Same
>>work? An NR does (can do) the same work as an X?
>>
>><<<<<<<pull the same loads>>>>>>
>>
>>See above
>>
>><<<<<<<<<<earn you the same revenue>>>>>>>>>>>
>>
>>Incorrect, A more powerful loco using the same fuel/maintenence costs as an
>>less powerful loco is going to make you more money and I don't have to be
>an
>>accountant to figure that out.
>>Of course purchase costs come into it but I was replying to the paragraph I
>>just quoted which was full of bad info.
>>
>>Barry, do you still do your accounting in a old ledger or in a
>>spreadsheet/database?
>>
>>Mark
>>
>Of course I use the best information technology available but that is in an
>industry that changes every few months.

>The problem is that we are comparing apples with oranges. Most of the
>Australian rail system other than the interstate lines and coal lines have
>more in common with US shortlines than with the Class 1 roads. It is a case
>of horses for courses and GM cater for this market by producing equipment
>that has a long serviceable life and and significant compatibility.

>To get back to your computer analogy, I started using Visicalc in the early
>80s and I use Excel 97 now. Visicalc is long obsolete. OTOH even before the
>advent of the PC, the 645 engine in the E series crankcase was EMD's
>frontline product. AFAIK it is still catalogued because it is still doing
>the job. With control system updates, turbos etc older locos will still do
>the job. I wouldn't put them on heavy coal haulage or first rank interstate
>work, but they can be an effective and economic solution for many, if not
>most, of the other tasks.

>Barry Campbell



I guess i should be a bit more clear in what I suggested.
There is no doubt that the higher power more modern loco has a higher revenue 
earning potential than an older less fuel efficient one ,but only if the 
circumstances are right.

Firstly if the Railroad has to borrow funds to buy either loco then the new 
one wins only if the Railroad has a long term contract (at least 5 years or 
more) to haul substantial volumes of freight which ensure that the new loco
is always working , ie earning sufficient revenue to cover not only its 
operational costs,but to also meet the loan repayments .
If this isnt the case , and the new loco spends even a short amount of its 
life sitting around waiting for work , the the increased interest payments on 
the loan to buy it will quickly wipe out any fuel maintenance efficiencies 
over an older loco.
In FAs case , they are a new player trying to break into a 
very competetive market and dont have the luxury ,(at least not yet ) of long 
term .hi haulage contracts like coal or iron ore.
Even some of the bigger players that do have bulk haulage contracts like 
Freightcorp choose to not buy ,but lease new locos ,(al la the 90 and 82 
classes.)

The other interesting thing about 2nd hand locos is that their 
purchase prices can be quite low based on how they are purchased and from 
whom.
For example the ELs were recently purchased by CFCLA for around $650K 
each.
On average only 6 years old ,and the new purchase price for the same loco 
would have been around $3.5 M each,which would you have bought.?

The other major advantage that the US railroads have over the Aus ones is the 
far heavier  axle loads that can be used.
This allows much higher HP locos like 4000 & 6000 HP to actually translate the 
increased HP into pulling power and thus revenue earning capability.
Whilst in Australia we are stuck with 22 tonne axle load maximums ,then 3000 
HP locos are about all that can be really usefully deployed.
While there are some 4000 HP locos running around ,their load hauling capacity 
is only very marginally better than the 3000 HP ones.
eg SRAs 81s 1100 tonnes up 1:40  (3000 HP)
     SRAs 82s 1200 tonnes up 1:40  (3000 HP)
     NRCs NRs 1230 tonnes up 1:40 (4000 HP)
Not much gain for the extra 1000 HP

So in most cases , for a short line operator like FA who face extreme 
competition and arnt in the bulk haulage business,a second hand loco will 
in most cases be a better deal.

MD