Revealed: Top US Corporations Raising Prices on Americans Even as Profits Surge

[mahatmakanejeeves]

26. Where does moving ten times as much product not require an increase in expense?

Last edited Wed Apr 27, 2022, 04:25 PM - Edit history (8)

All I can think of is floating logs down a river maybe, but that practice went out decades ago.

If you're talking about moving refined product in a pipeline, it certainly requires more energy to move 1,000 units of product than it does to move 100 units. Further, the energy you use to move that product costs more than before, if crude oil is priced at $100 per barrel now, when it used to be priced at, say, $40 per barrel.

Not a pipeline? Let's try something else. You're CSX or Norfolk Southern, and you're moving automobiles from a factory to an automotive distribution center. Three hundred miles sounds about right. You've got 720 cars to move. An autorack holds 12 cars. That's one 60-car train. Put two 3,000 horsepower diesel locomotives on the front. Average train speed, 30 mph end to end. That's ten hours. I don't know how many miles per gallon they get, but someone on the railroad will know the expense for moving a 60-car train carrying 720 automobiles 300 miles using two 3,000 locomotives to get the job done.

That was then; this is now. Business is up tenfold. Now you have to move 7,200 automobiles. Same distance, but let's increase the train length to 75 cars. This can still be done with two locomotives per train.

600 autoracks in 75-car trains means you'll have 8 trains. You'll need more locomotives.

Train weight has gone up by 25 percent. The increased weight per train means that the locomotives will be working harder, thus getting worse mileage. The trains will slow down too and take longer for the trip. Trains headed in the opposite direction will have to take the siding more, so operations for all trains will slow down along the segment of track over which the trains are operating.

You can speed the trains up, but only by adding a third locomotive. That means more fuel, but now it costs more than it did back when the factory had orders for only 720 automobiles. It's up to $100 per barrel now. What that works out to per gallon of diesel fuel, I don't know.

You'll need an engineer and a brakeman per train, depending on the contract. The train crews will probably want to be paid too.

Any delays? Whoops, you'll need a second crew, as the first crew runs out of hours and ties up the train at the nearest point where it can. Call a taxi and take the crew to a terminal. You'll need only one taxi; the new crew can ride in it on the one to the tied-up train.

The railroad can figure out the cost for doing this, but it's certainly going to be a lot more than for the first movement of automobiles.

Every step of the operation costs more now than it used to.

I believe I am using realistic figures.