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Financial information

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  • modelrailroader4him
    Just out of curiosity, was any of the financial information about the former Chessie ferries operation ever made public? I know the railroad had claimed that
    Message 1 of 5 , Apr 9, 2014
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      Just out of curiosity, was any of the financial information about the former Chessie ferries operation ever made public?  I know the railroad had claimed that the ferries were unprofitable (and I'm sure they're correct, what with the 60-some person crews, compared to the handful for a complete train) - but the argument could also be made that the railroad has the advantage of nearly-free coal (the biggest expense incurred is the "lost" revenue hauling it for themselves as opposed to a customer), which is an expense the private owners (MWT and LMC) had to bear themselves in its entirety.  (I'm also aware of the agreement made with the City to purchase the coal from them at a bit of a discount, but that still doesn't compare to the railroad).  Also, did they have any sort of surcharge for railcars using the ferry, or was it included in the original haulage rate?  I'd be curious to know how much money they were *really* losing compared to the private owners.
    • Les Bagley
      I ve always been told that loss is a relative thing. if I give you five dollars and I give your neighbor 10 dollars, while you made five dollars, you can
      Message 2 of 5 , Apr 9, 2014
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        I've always been told that "loss" is a relative thing.
        if I give you five dollars and I give your neighbor 10 dollars, while you made five dollars, you can also claim that you lost five, because your neighbror made more.  There was a lot of that sort of rhetoric in the public proclamations the railroad(s) made about abandoning ferry service.
        Les Bagley, Michigan State Ferries historian

        On 4/9/2014 12:14 PM, ru4gzs@... wrote:
         

        Just out of curiosity, was any of the financial information about the former Chessie ferries operation ever made public?  I know the railroad had claimed that the ferries were unprofitable (and I'm sure they're correct, what with the 60-some person crews, compared to the handful for a complete train) - but the argument could also be made that the railroad has the advantage of nearly-free coal (the biggest expense incurred is the "lost" revenue hauling it for themselves as opposed to a customer), which is an expense the private owners (MWT and LMC) had to bear themselves in its entirety.  (I'm also aware of the agreement made with the City to purchase the coal from them at a bit of a discount, but that still doesn't compare to the railroad).  Also, did they have any sort of surcharge for railcars using the ferry, or was it included in the original haulage rate?  I'd be curious to know how much money they were *really* losing compared to the private owners.





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      • modelrailroader4him
        I feel the exact same way (being a relative term), so that s actually the reason I was wondering if there was actually any proof given, or just the railroad
        Message 3 of 5 , Apr 9, 2014
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          I feel the exact same way (being a relative term), so that's actually the reason I was wondering if there was actually any proof given, or just the railroad claiming "We're losing money" and the government said "Alright, you can drop it then" without any substantial evidence necessary.
        • amb3573
          I don t think C&O financials for the carferry service if they could be found would tell you much if they were published for public and/or government
          Message 4 of 5 , Apr 9, 2014
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            I don't think C&O financials for the carferry service if they could be found would tell you much if they were published for public and/or government consumption other than it lost money. Something to consider if they existed is what operations did they include or not include. I think its very possible that they would have included the Port Huron operations. The reason I think this is because not only did the Marine Workshop in Ludington service the Ludington fleet but the also worked on parts and equipment for Port Huron. (That's the reason why the propeller for the Pere Marquette 10 is in Ludington.) Also Captain Bissell in addition to working on the Ludington ferries worked on the Pere Marquette 10. I can imagine, while its easy to determine what expenses belonged to the river fleet it would be very hard to determine what revenue belonged to it, if it were included in the carferry service financials.

             

            In regards to coal being "free", that may have been true from an overall corporate perspective, but I am sure the carferry service was charged for it (probably at cost) by the mines that the C&O owned. Think about it, they needed to keep track of usage somehow. The revenue for the mines and the cost for the carferries would have been a wash on the corporate financials. Also just because that was true when the Badger and Spartan were built does not mean that it was true in the years after that. It could be possible the sometime before the Chessie System transferred ownership to the MWT that those coal mines that supplied were sold, or the C&O found a supplier that sold coal to them that was more expensive to make the books look bad when they were trying to apply for abandonment.

             

            An interesting note about the coal purchases LMC makes with the Manitowoc Public utility, those who were working against the Badger tried to claim it was a subsidy. Someone shattered that myth when they got the price of what the coal was selling for versus what LMC was paying, Turns out the Utility is making a profit on the coal.

             


             

          • Michael McGuire
            Les Bagley is almost certainly correct. Cost allocation - at that time - was probably pretty relaxed. If anyone really wants to know what the information
            Message 5 of 5 , Apr 10, 2014
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              Les Bagley is almost certainly correct. Cost allocation - at that time - was probably pretty relaxed. If anyone really wants to know what the information presented to the Interstate Commerce Commission was, it is likely available to in the National Archives.
              http://www.archives.gov/research/

              Seeing as how no major (or to my knowledge minor) railroads run ferries across large bodies of water in this country, except in Alaska where there is no alternative, it is probably not sinister that the C&O wanted to end this service (reducing its costs) and devote its assets elsewhere. The few remaining train ferries in Canada - and elsewhere in the world - operate under much different conditions - particularly regulatory and economic. 

              Train ferries seem to be a dying technology. The C&O was actually fairly late in abandoning it.

              Michael D. McGuire
              Grand Rapids, MI
              mdmcguire@...


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