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Re: (erielack) Gas prices and their effect on the EL

To the various Pauls and other friends on the List,

Another thing to consider was that by '73, the EL was living day-to-day as 
far as cash flow went.  The oil price spike meant an immediate jump in 
expenses.  Due to ICC rate oversight at the the time, these expenses 
couldn't be immediately passed along to the shippers.  And although traffic 
volume increased a bit, as Paul B described, even that had a lag of at least 
a few weeks; most shippers can't change their distribution logistics 
overnight.  So, there was no more leeway, as far as operational cash flow 
went, for the EL to continue taking losses on a new service while awaiting 
new customers.  Too many fixed costs to meet.  Interestingly, at the same 
time, the RDG & CNJ abolished their B&O Trailer Jet operations between 
Philly and E'Port/C'Paw.  Was told by a CNJ employee that it was due to the 
oil price spike. However, I was also told that the trains had been getting 
smaller anyway due to competition, especially from the LV Apollos; oil 
prices were probably the last straw to the extremely cash-poor CNJ.   
Business for the EL, CNJ and other eastern roads got better due to diversion 
from truckers, but it was only for a handful of months; the spike in labor 
costs due to inflation, and then the recession, soon hit.

But hey, at least the EL had that last bit of glory with the Bicentennial 
units.  Personally, I would have liked to have seen a U36C in the EL r/w/b 
scheme (as opposed to the U34 in the NJ DOT Bicen scheme).  Did a modeler 
ever do up such a "what might have been" unit?

Jim Gerofsky

>From: "Paul Brezicki" <doctorpb_@_bellsouth.net>
>To: "EL Mailing List" <erielack_@_lists.railfan.net>,"Paul Tupaczewski" 
><paultup_@_comcast.net>,"Jim Gerofsky" <graytrainpix@hotmail.com>
>Subject: Re: (erielack) Gas prices and their effect on the EL
>Date: Wed, 30 May 2007 06:41:59 -0400
>
>I never did quite understand the latter-day NE99/100 either. EL of course, 
>had its own line into North Jersey. The only rationale would be the opening 
>of CNJ's Portside intermodal terminal in 1972, which significantly 
>shortened the dray for containers bound to/from the Port of Newark. However 
>this COFC traffic never developed; the intermodal traffic on SE-98/ES-99 
>was mostly conventional trailers. Another problem was clearance. TOFC into 
>the E'port area was limited to 12'6" trailers, so most had to be ramped at 
>Somerville NJ. CNJ made a point of advertising their wllingness to handle 
>containers without chassis which obviated the clearance issue for tall 
>containers, but again, this traffic never developed.
>
>As for the fuel crisis etc, a close look at the chronology of events will 
>help. The oil embargo began in October 1973 and fuel shortages ensued soon 
>after. Initially, intermodal traffic benefitted as truckers had more 
>difficulty finding diesel than RR's did. Intermodal ran strong on EL in 
>late '73, and 1974 was a record year for them. However, by the summer of 
>'74 the fuel situation began to impact the economy and traffic began to 
>decline. This was around the time EL tried to make SFE-99 an extended 
>Cx-Chicago run which turned out to be an exercise in poor timing, so it was 
>soon cut back to its previous Marion origin.
>
>Paul B
>
>In looking through Jim Gerofsky's excellent EL memories site, I noted
>this paragraph:
>
>OIL CRISIS, RECESSION AND CONRAIL: The OPEC oil embargo in 1973-74 was
>EL's last straw. The big jump in oil prices (and temporary inabilty to
>get as much as needed) immediately killed some EL service innovations
>like the SFE-99 run from Croxton and the NE-99 / NE-100 TOFC run to Port
>Newark via the CNJ. These services were in their first 6 months and were
>running with under 30 cars. The jump in fuel costs and decrease in
>availability made it too expensive for the EL to give those runs more
>time to develop a traffic base. Over the next few months, oil prices
>caused inflation, which in turn caused unions (including railroad
>unions) to demand steep pay hikes to maintain standards of living. This
>in turn contributed to an overall business recession in 1975. For the
>EL, there was no escape from the financial squeeze of increased costs
>and decreased revenues; after 4 years of bad luck, i.e. Hurricane Agnes
>and an investment in the Scranton route that didn't fully pay off, the
>EL had no reserves left for bad times. So, the EL disappeared into
>Conrail.
>
>It is indeed an interesting piece of reading, and makes some pretty
>compelling arguments. One thing I'd like to question, however: If gas
>prices were up circa 1973-1974, and the EL was losing customers due to
>higher fuel prices... where did that business go? Trucks and other
>railroads had to buy the same expensive gas, and you'd think trains were
>far more efficient than trucks.  And I would assume that trucks faced
>the same issues as railroads in relation to getting the gas they needed.
>Based on the EL's string of bad luck, did the shippers just default to
>trucks?
>
>So how did that traffic end up going?
>
>Also, I never quite understood the purpose of NE-99/NE-100. Was
>E'port-Scranton really that big a traffic flow for TOFC/COFC? I've seen
>only a few photos of these trains, most of which showed the train being
>10 pig flats or less. Huh? Was it not marketed well enough, or was there
>simply not a demand for this type of service? (particularly when trucks
>could do NY City-Scranton in about 3 hours?)
>
>Just some thoughts for the day. :)
>
>- Paul
>

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