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

Jim, Paul and List,

Here are some figures for trailer handlings at Chicago 51st St illustrating the EL traffic picture at that time.

Loaded trailers, Dec '73 vs Dec '72: up 50.7%

All trailers, first half '74 vs first half '73: up 21.4%

Since fuel consumption rises exponentially with train speed, rising fuel price disproprtionately impacts higher-speed service such as TOFC, and as you say was probably the knockout punch for a service that was on the ropes anyway. Jim, do you know exactly what month the CNJ-RDG trains were discontinued?

Paul B

From: "JG at graytrainpix" <graytrainpix_@_hotmail.com>
Subject: 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.




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