Raildudes dad wrote:Apparently locomotives are free, their maintenance is free, track gangs are free, signal upgrades are free, pushers are free, they don't use any fuel, the property is tax free. Really guys, I really don't think the coal trains are the cash cows you think they are, profitable yes.
Please note, I said revenue not profit.
Yes, those things cost money, but CSX is making a lot of money on these trains. Even when you take out the cost of the power, the track maintenance and other costs, there is a lot of profit to be made. Please note, I have already addressed the idea of fuel as well, based on CSX's own published figures.
Let's also not forget that all of the costs you mention are not along covered by the coal trains, but also by the other traffic that uses the same railroad tracks. All of these costs are spread over EVERY revenue carload and every locomotive on the system.
Simply put, the coal running from BNSF in Chicago to West Olive is making CSX a ton of revenue. This operation has to be very cash positive for the railroad, and covers expenses elsewhere on the railroad where things are not as profitable.
Let's look at crew costs for a second. Per the comment above, CSX is paying for 3 crews total for these trains (2 for loads, 1 for empties). I don't know what the average crew member makes, but based on the information I can find, the salaries for an engineer range up to 100K and the conductor up to 60K. This means a 2 person crew costs the railroad 160K in salaries. Add in another 50K in benefits and we are looking at the costs for the operating crew of 210K per year. With 3 crews per round trip, we are looking at roughly 610K in costs. Now, sometimes these normal crews don't get all the work, so let's up the total to 5 crews working these trains, to cover OT, other issues. The crew costs for these trains, assuming 2 person crews is about 1 million per year. Out of revenue in the vicinity of 70 million, there is still a bunch of profit. Even if the costs of maintenance are $100,000 per mile, we are looking at maybe 20 million per year for this line. Now considering the fact this line not only sees coal trains, but also daily freight traffic which shares in the costs, the simple fact is CSX is still making a lot of money on these coal trains to West Olive. Any way you slice it, CSX is making a nice chunk of change on this line.