ECONOMIC FACTORS INFLUENCING THE DECISION TO USE JUMBO RAIL CARS

For over 40 years engineers have concluded that very heavy axle loading lends to a disportionate degree of track wear. Economists see the important question being why management continues to purchase and use jumbo cars in the face of very pervasive evidence provided by engineers. Management lives in a world of demand functions, cost functions, accounting principles and regulation. Decision making in this maze of variables, constraints and uncertainties must be made on the basis of the best information at its disposal and given the nature of railroading. ICC costing and regulatory restraints have encouraged large cars. Economics of scale seem to justify large cars. Long term economic costs, including those associated with track deterioration, may paradoxically be the wrong basis for rate making. Inability to compete in the short run may make the long run irrelevant. Short run profit maximization may be maximum use of assets.

• Supplemental Notes:
  • Proceedings of the 12th Annual Railroad Engineering Conference held at Pueblo, Colorado, October 23-24, 1975. The complete volume is RRIS 02 132958, Pricing is for the complete volume: Repr. PC $6.75, Microfiche$2.25, NTIS PB-252968/AS.
• Corporate Authors:

  Federal Railroad Administration

  1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Authors:
  • Selzer, L J
• Conference:
  • Proceedings of the 12th Annual Railroad Engineering Conference held at Pueblo, Colorado, October 23-24, 1975. The complete volume is RRIS 02 132958, Pricing is for the complete volume: Repr. PC $6.75, Microfiche$2.25, NTIS PB-252968/AS.
• Publication Date: 1975-10

Media Info

• Pagination: p. 130-132

Subject/Index Terms

• TRT Terms: Axle load force; Cost accounting; Decision making; Economic analysis; Freight traffic; High capacity cars; Management; Planning; Profitability; Rate making; Regulations; Return on investment
• Identifier Terms: U.S. Interstate Commerce Commission
• Old TRIS Terms: Axle loadings; Government regulations; Management planning
• Subject Areas: Administration and Management; Economics; Finance; Freight Transportation; Law; Planning and Forecasting; Railroads;

Filing Info

• Accession Number: 00132973
• Record Type: Publication
• Source Agency: Federal Railroad Administration
• Report/Paper Numbers: FRA OR&D 76-243
• Files: TRIS, USDOT
• Created Date: Jun 5 1976 12:00AM