Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
July 10, 2013 at 10:53 AM
Much attention concerning the Quebec rail disaster has focused on the danger of transporting oil by rail. But pipelines come with hazards, too. For example, a natural gas pipeline exploded in southeast New Mexico in 2000, killing 12. Earlier this year, an Exxon Mobil pipeline carrying Canadian crude ruptured in Arkansas, causing major environmental damage. Also, given the geographic dispersal of the fracking boom, railroads are the most efficient way of carrying much of this petroleum. Many of these fields are far from existing pipelines, and because “tight oil” recovered with fracking tends to deplete more quickly than traditional oilfields, there’s little incentive to build new pipelines in many cases.
Another issue needs discussing: Railroad crew sizes. According to the Wall Street Journal, this train of five locomotives and 72 tanker cars was in the care of one person, the engineer. One. This person stopped the train in Nantes, Quebec, headed to a hotel, leaving the diesels running so as to keep pressure in the brake lines, and was going to be relieved by another engineer. It was during this time that at least one locomotive caught fire. A track technician from the Montreal Maine & Atlantic, a subsidiary of Illinois-based Rail World, arrived to assist firefighters. The owner of Rail World said, according to the Journal’s report, “that technician wasn’t qualified to know that the engine needed to be on to keep the air brake fully engaged. It is unclear if the technician told the dispatcher.” Shortly afterward, the unmanned train broke away and rolled downhill to Lac-Mégantic, derailing and exploding, leaving 15 confirmed dead and 60 missing as of this morning.
Many things went wrong. But one engineer for such a large train carrying hazardous materials seems reckless. Yet this is the direction where much of the railroad industry wants to head, and not just short lines but giant Class 1 railroads.
June 6, 2013 at 10:28 AM
I find evidence of the Puget Sound economy’s long reach all over, including in the June issue of Trains magazine. An article highlights the 25-year survival of Montana Rail Link, with a 623-mile main line running from Sand Point, Idaho, to east of Billings, Mont. This is the former Northern Pacific, the first transcontinental to reach our region. But it became redundant with the 1970 merger involving the NP and the Great Northern and creating the forerunner to today’s Burlington Northern Santa Fe. BN did a lease-purchase agreement with MRL founder Dennis Washington in 1987; in 2047, MRL has the option to purchase the main line outright. BNSF uses the former Great Northern as its main rail route, although it sends trains over MRL, too. And MRL has been successful in keeping and growing its own traffic.
One big blow came during the recession when Seattle’s Plum Creek Timber sawmill in Pablo, Mont., was permanently shut down. As a result, MRL was forced to close an entire branch line. “Losing Plum Creek was like losing Sears and JCPenney out of a mall,” the article quotes MRL President Thomas Walsh. The company was hammered by the housing collapse. It had also become a real estate investment trust, a boon to investors who get most of the profits, but a situation that doesn’t allow executives to be patient.
Meanwhile, the magazine — and you have to buy it, this isn’t available on the “tubes” (what a concept) — has a fascinating map showing all the trains operating on Montana Rail Link at 10 a.m. on Feb. 25. Again, the Puget Sound is heavily represented.
May 7, 2013 at 10:21 AM
James J. Hill was in the wrong game and lived in the wrong era. Hill, the “empire builder” who directed construction of the Great Northern Railway to Seattle as well as the newly renovated King Street Station, joined a cabal involving some of the richest men of the Gilded Age — John D. Rockefeller, E.H. Harriman and J.P. Morgan — to create a giant rail network including the Great Northern, Northern Pacific and Chicago, Burlington & Quincy. They pooled their holdings in a trust called the Northern Securities Co.
The 1901 deal was especially good for Hill and Harriman, the latter controlling the Union Pacific. The UP received favorable treatment from the Hill lines. The competing Burlington Route was taken out as a rival. Hill kept control of railroads to the Puget Sound. These rich men were saved from the cost of “ruinous competition.” Shippers were forced to pay high rates and had no alternatives. (The Milwaukee Road’s extension to Seattle and Tacoma would not arrive until later in that decade).
What none of them counted on was Theodore Roosevelt, the new president. Unlike his predecessors in the 1880s and 1890s, he responded to the popular outcry against the monopoly and sued Northern Securities under the Sherman Antitrust Act. The case went to the Supreme Court and the rich men lost. Northern Securities was broken up, the biggest coup of the Trust Buster. I wonder what TR, who enjoyed sports as much as he loved “fair play,” would make of David Stern and the National Basketball Association?
April 8, 2013 at 9:50 AM
Last week I wrote a commentary on the deplorable working conditions of short-haul truckers at the Port of Seattle. The drivers, who face rotten wages and lack of benefits, are also only allowed to use two portable toilets at the terminal entrance. This brought an interesting response from my go-to guy in the trucking industry, Steve Gordon of Pacific-based Gordon Trucking. He said I “should keep in mind those deplorable restroom facilities are not at all uncommon in our industry in general.”
There are plenty of loading docks at Fortune 500 companies where we do work regularly where our relatively more “professional” drivers in our segment of the business are told that the restrooms aren’t for them. Then to add the cherry on top, you get municipalities like those down here in the Sumner/Auburn/Kent valley that have ok’d lots of warehousing, but won’t OK a truck stop or rest area.
Where do they think truck drivers are supposed to park and take rest breaks? They can’t merely levitate outside these facilities for hours on end. So we then end up with trucks parked on freeway off ramps and city streets, neither of which is a good thing, further reinforcing that negative perception and making it less likely to get an adequate facility.
July 31, 2012 at 10:00 AM
Shippers pay $1.25 for every $1,000 worth of cargo that goes through American ports. This is the Harbor Maintenance Tax. Canada and Mexico don’t charge a similar tax and a new report shows that the levy does put U.S. ports at a competitive disadvantage. “Pacific Northwest ports are facing an invisible blockade that is sending our business to Canada,” U.S. Rep. Rick Larsen, D.-Wash., said in a prepared statement last week. Larsen is the ranking Democrat on the Coast Guard and Maritime Transportation Subcommittee, which has jurisdiction on the issue in the House.
The Federal Maritime Commission study found that Canada and Mexico are not breaking any trade laws. It also stated that “many of the advertised benefits of foreign ports are not as significant as may be believed, for example, the transit time from China to inland destinations such as Chicago and Memphis through the Port of Prince Rupert as opposed to ports in the United States.”
American ports are found to be competitive internationally. “However, it would appear that the (Harbor Maintenance Tax) makes the challenge more difficult. This is especially the sentiment of the ports that are competitive with Canadian and Mexican ports.” It quotes Tay Yoshitani, CEO of the Port of Seattle: “A lot of factors go into the routing of cargo and a lot of carriers/shippers want diversity in how they get cargo to warehouses…cost is always an issue, and the HMT clearly disadvantages us against Canadian ports.”
June 18, 2012 at 10:30 AM
The reader should know that I hated the Sonics. Growing up a Phoenix Suns fan, I dreaded the playoffs, when my team would have to get past Seattle in its glory days.
Economics is not a hard science, so don’t expect it to provide clear-cut answers on the arena. Studies have shown that stadiums and arenas usually fail to live up to their claims as economic-development engines. Suburban Glendale, Ariz., saddled itself with Greece-like debt to lure the NHL Coyotes from downtown Phoenix. Like much else in Arizona, the deal was part of a real-estate hustle that went wrong.
On the other hand, Coors Field in Denver was a great success in the redevelopment of Lower Downtown (LoDo). Cincinnati seemed a poster child of stadium-building gone wrong, raising its sales tax in 1996 to build new homes for the Bengals and Reds and then facing massing shortfalls during the Great Recession. Now, however, those stadiums are anchoring an impressive renaissance on the once-ramshackle riverfront.
May 8, 2012 at 9:51 AM
The Puget Sound ports are only as strong as the railroads that link them to the rest of the country, as well as to the interior of Washington. Tacoma — “where the rails meet the sails” — won the first transcontinental railroad, the Northern Pacific. Then Seattle got the Great Northern. Eventually the Union Pacific and Milwaukee Road arrived, too. Now, after decades of consolidation, the main roads are the Burlington Northern Santa Fe and the UP.
The ports of LA and Long Beach enjoy straight-shot rail service to the heart of America, especially with the old Santa Fe double-track “Transcon” to Chicago and the former Southern Pacific Sunset Route to Texas and New Orleans. The latter is also being double-tracked. The ports have invested heavily in infrastructure, including the 20-mile underground Alameda Corridor, which cut congestion near the ports. Prince Rupert, B.C., the ascendant North America container port, is served by the Canadian National, which also offers direct service to the American Midwest. CN also bought the Elgin, Joliet and Eastern to speed its trains around the Chicago bottleneck.
Things are more complicated here. BNSF’s former Great Northern route runs up from Seattle to Everett before turning east to Chicago. It’s a busy, high-capacity line, but is prone to mudslides in the region. The old NP line out of Tacoma is considered a secondary route by BNSF. Thus, Stampede Tunnel can’t accommodate double-stack containers (Cascade Tunnel on the GN can). UP from Seattle and Tacoma goes to the heartland via Utah and Nebraska. Locally, dockside rail is an advantage for Tacoma.
February 13, 2012 at 9:40 AM
Non-union short-haul truckers are entering their third week of an action to get better working conditions at the Port of Seattle. According to Sage Wilson of the activist group Working Washington, a rally was to be held at 9 a.m. today at Harbor Island to show support for the drivers, organized by the Seattle Port Truckers Association and Puget Sound Sage. The Teamsters are also supporting the action.
The drivers, primarily immigrants, haul containers from the port to rail yards. They complain of poor working conditions and wages, as well as being held liable for safety violations over which they have no control. Last week, they were largely successful in shutting down movement of freight. Wilson claims “Container ships continue to back up on Elliott Bay as the movement of goods has slowed to a virtual halt. Running on Alki (Sunday), I counted at least 4 freighters floating listlessly in the bay.” (Actually, two are grain ships that have nothing to do with the truckers and today is a Longshoremen’s holiday). Last week, the truckers successfully rallied for back pay from Edgmon Trucking, one of the short-haul (drayage) companies that employs the immigrant drivers.
Meanwhile, in Olympia, the House passed HB 2395, which would grant short-haul truck drivers more of the rights of employees under state law. Currently, they are treated as independent contractors. Still, a meeting involving port officials last week produced no resolution.
February 8, 2012 at 3:22 PM
I cover the waterfront, but today I was out at the Teamsters hall in Tukwila giving a speech to a group of retirees. Meanwhile, the Teamsters are supporting an effort by non-union drayage (short-haul) truckers to shut down the Port of Seattle. These drivers haul containers from the port to rail terminals. They make low wages, complain of poor working conditions and are responsible for such things as safety violations in their trucks. They’re targeting discretionary cargo that must move on specific days to make rail schedules.
The Seattle Times’ Mike Lindblom reported on the issue last week. Today, cargo is barely moving. It’s a compelling human story. I listened to a Teamsters organizer talk about the plight of these drivers, many of whom are immigrants, trapped in low-wage jobs. Many walked off the job in protest and the trucking companies allegedly withheld their paychecks. The Teamsters and the port have been at odds over this for years, port officials saying they have limited ability to micromanage the private drayage companies on wages. Of course, the Teamsters would love to organize these drivers.
But it’s also a regional competitiveness story. Without the ability to move cargo quickly from dockside to rail container terminals, Seattle is sunk (Tacoma has dockside rail access and is less dependent on drayage truckers.
March 3, 2011 at 10:20 AM
Ridership may go up and down for Sound Transit, but it is essential infrastructure for a prosperous Northwest in the decades to come, particularly commuter rail and light rail. Gasoline prices are only going to head higher in the long run, electric cars will be expensive and are not a power source, so offering the choice of a robust multi-modal transit system is essential for competitiveness.
Some conservatives make a fetish out of opposition to transit and trains, for reasons that elude me (anti-urban bias, money from the oil companies, ???). A host of myths are thrown out about rail. In reality, no transportation system in the world exists without public subsidies, and America heavily subsidizes the automobile and airlines to the detriment of what was once the world’s finest rail system. Roads and freeways do not “pay for themselves.” Also, Amtrak is very highly patronized and would be more so if schedules were more frequent and convenient. The success of the Cascades here shows this, as does the relatively abundant rail service in California. As for light rail, one of the most successful systems is in road warrior Dallas, which just opened a 28-mile extension.
Now China and other nations are rapidly catching up with Europe and Japan in high-speed rail, and Europe is expanding its systems. High-speed rail offers faster service and more energy efficiency on numerous city-pair routes. They understand the need for rail in the mix to save fuel and address climate change. In America, we’re fighting over just creating higher-speed rail. In fact, almost a century ago 100-mile-per-hour trains were common here. Now Amtrak is often limited to 79 mph outside the Northeast Corridor. And even the Northwest Corridor is not true high-speed rail, from 120 mph to more than 220 mph. (We need to expand freight capacity, too — something Wall Street has resisted, not wanting private railroads to reinvest in themselves).