And Why They Should.

I’m hoping that when the Executive Council has its meeting on May 15th they put politics aside remove item #111 from the table and grant the 2 ½ year state contract to Pan Am Railways.  In my last post I didn’t state why I think this is needed but I’ll answer the question now.

Norfolk Southern Locomotives headed east at North Adams, Mass. Norfolk Southern owns the rail line from Mechanicville,NY to Ayer, Mass. which is the primary gateway into NH and the state owned line to Bennington.In today’s global based deal making world the whole transportation sector has become nothing more than a cost; a cost that has to be squeezed, leveraged and at times actually given out for free.

John D. Rockefeller understood this. When he started moving his oil to the markets he was actually paying the railroads then after some time they were moving it for free then some more time passed and some reports state that the railroads were actually paying Rockefeller to move his oil. Some things have changed since the days of king oil and railroads but some things have not. Transportation is still a cost, a cost that can be squeezed whether this is moving a load of cane sugar from Laredo, Texas to Hershey, Pennsylvania or a load of crushed rock from Wilton, NH down to Boston. It’s all about the cost and what can be squeezed and the logistic strategy to make the move happen.

The law of economy of scale says that larger corporations are able to reduce or squeeze cost easier than small ones. This is the case in New Hampshire as Pan Am Railways with it large corporate portfolio will be able to offer greater cost savings than a smaller carrier like Milford-Bennington. This would be similar to McDonald’s selling hamburgers against a local hamburger stand.

This is also where New Hampshire politics comes in.

For whatever reason the Executive Council is actually looking at the local hamburger stand instead of looking at the larger picture which is McDonalds and what this state lease would do towards costs, transportation and ultimately serving business that uses rail transportation and the regional jobs that come with it.

I’d also state that the local hamburger stand has been closed for two years and if they’re granted this next lease they may very well be closed again if not more than 2 1/2 more years. I haven’t seen any information to contradict this. I don’t believe that the NH DOT has either.  

I'm also wondering where Gov. Hassan stands on this transportation related issue.