Reminded of the Laws of Physics

I once had a great conversation with a former airline flight attendant. We talked about the different things we had seen in our collective time in business travel. While I may have thirty years of business travel under my belt, dating back to the days when there was a smoking section in the last four rows on a flight, she may have more air miles amassed than I do, since she has flown four days a week for almost five years.

Our conversation turned to turbulence in flight. For so many people it is nothing more than a bumpy ride, the nagging by the flight attendants about buckling up the belts, and the flight deck messages about looking for smoother air. In thirty years of air travel, I have had my share of rough flights on which the carts remained parked and there was no meal or drink service. It does not take much to make one of those beverage carts rocket into a passenger.

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Reinvesting in Infrastructure

It is quiet 20 miles to the East of where I sit; Congress is out of session. The warring factions on Capitol Hill did pass a Transportation Bill, under the wire, before they left for their summer break.

While the public sector of highway, water, and air transport searches for yet more funds to pour into the budget, the private entities of transport infrastructure, the railroads, are doubling down on capital improvements. The US Class 1 railroads committed to $16 billion in capital for track and equipment in 2014. Shippers are putting money to work too as they lease commodity specific railcars, like new DOT-111 tank cars designed for the volatile Bakken Crude where demand may be over 10,000 new tank cars. US industry could be investing over $25 billion in 2014 in additional rail infrastructure. All of that investment is real investment, an investment of private money.

Land and Tracks

Perhaps the longest life asset on a railroad is the right-of-way and the track. The railroad owns the land under the tracks, leaving railroads as large owners of real estate. While in total the land makes up thousands of acres, most of that land is in right-of-way, long strips of land only 10’ or 20’ wide. Mile long narrow strips of land are not attractive real estate packages, so the value of the land the railroads sit on is almost worthless. In fact, when a railroad abandons a track, the best use of the land is as a public trail.

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