Sunday, March 9, 2008

End of the Line

The spreadsheet that has been under construction is now finished. I think it exists now as it will exist in its final state. The spreadsheet was designed to support the thesis:

Despite other contributing factors, American railroads adopted Diesel locomotives primarily because Diesel technology promised mechanical advantages to alleviate real economic problems.

The spreadsheet as it is now is avaliable at:
http://www.4shared.com/file/40524635/2f1502f5/Senior_Exit_Project_-_B.html

Over the course of the project, the spreadsheet has evolved from a model, to both a model, as well as an index. I will now provide an overview of the spreadsheet, highlighting the functionality of each section of the spreadsheet as well as its importance.

The Model
Starting at the top of the spreadsheet, the first thing visible is the model. The first component of the model is a tool to calculate the cost of operating three very widely used Diesels for a given number of hours. The Also HH1000, NW2, and E3AB were all widely used around the mid 20th century, and were important first-generation Diesel engines to the railroads. The data provided was collected in 1939.

The model itself is inflation adjusted for 2007 dollars, to provide more tangible results for a modern user. From the results, it can be seen that from the costs seem rather low. This can be attributed to several factors. Firstly, the cost of labor, which is one of the largest components of locomotive operation, is not listed. This cost was unable to be found through research. Also, the price of many supplies for the operation of these locomotives has inflated much more quickly than the US dollar. An inflation calculator was found to determine costs in 2007 dollars, but a better means to measure the costs in 2007 dollars might be to trace the value of each individual component from 1939 to 2007. This would be impossible however, because the categories found, are relatively vague, and do not consist of one commodity that can be traced.

The second portion of the model consists of two parts. The first part is a tool to calculate the maintenance cost of a Santa-Fe Railroad 4-8-4 class steam locomotive per mile in 1944. The cost of maintenance was found to be $5.28 per mile in 2007 dollars from the data that was found. This is considerably higher than the cost of Diesel locomotives that was found. The Diesel locomotives had maintenance costs per hour around three or four dollars. The average speed at which locomotives operated was around thirty miles per hour. This means that the Diesels cost three or four dollars for up to thirty miles from the information provided. This is significantly higher than the steam data found on the Santa Fe 4-8-4 engines found.

It is important to note however, that this comparison is seriously flawed. The cost of operating a giant locomotive is most certainly more than 3 or 4 dollars per hour, or 5 per mile, for maintenance. In my personal opinion, I believe costs were omitted in both of these sets of data. An interesting comparison is provided however, showing, with the limited data available, that Diesel technology may be cheaper than steam at least in maintenance costs.

The third section within the model deals with the average cost of a steam locomotive in 1891. The data was found in a study investigating the costs of a new type of steam locomotive then introduced, the condensing locomotive. The data includes material and labor costs, costs previously unseen in the other data. What can be compared to the Diesel locomotives is the cost of maintenance. The average cost of maintenance for a steam locomotive in 1891 is even higher than the cost of maintenance per mile of a 1944 Santa Fe 4-8-4. Diesel offers an even greater advantage here. Also, the cost of fuel can be compared. Considering the number of miles a locomotive runs in an hour, the average cost of coal at $2.51 an hour, creates an hourly cost of coal much higher than the cost of fuel for the Diesel engines.

From this model, although comparisons are very difficult because of different types of data (cost per mile vs. cost per hour), it has been shown that Diesels provided mechanical advantage over steam locomotives in the cost of maintenance as well as in fuel.

Index

The index provided here shows long-term trends in the railroad industry.

The first list of data shows the number of locomotives in operation. From the data, it can easily be seen that by the mid-20th century, the number of steam locomotives was declining, and the number of Diesel locomotives was increasing. After 1952, there were more Diesel locomotives in operation than steam locomotives.

The next list of data is perhaps the clearest indicator that Diesels helped alleviate real economic problems. The next set of data illustrates the operating ratio of engines in three major categories. An operating ratio is defined as:

Cost of a particular element of a locomotive
Total revenue generated by the locomotive

The operating ratios for engineers (labor), fuel, and repairs are shown. A high correlation is seen between the widespread advent of Diesel technology and a drastic drop in operating ratios. This demonstrates the economic benefits of Diesels.

The next list of data describes the number of locomotives per train. Fewer locomotives mean less cost. The correlation between the advent of Diesels and fewer engines per train also demonstrates the benefits of Diesels.

The next list of data describes the average tonnage and average number of cars per train. Correlation can be seen again. Tonnage for both passenger and freight trains, as well as train length all increased with the advent of Diesels. This allowed for better financial performance by the railroads.

Finally, revenue ton-miles are listed. Revenue ton-miles are defined as:

(Number of tons carried by railroads for revenue) x (number of miles the tons are carried)
More ton-miles indicate that railroads are busier and are generating more cash flow. This is generally good for the railroads. Again, there is high correlation between the advent of Diesels, and high ton-mileage per year for railroads. It should also be noted that ton-mileage increased with the advent of WWII in the early 1940’s. Higher rail traffic due to WWII may have been represented in higher ton-mileage, but ton-mileage remained high after the war. The advent of Diesels is the most major change in railroads before and after the war, so if any change in the railroads led to sustained high ton-mileage; it was therefore the advent of Diesels.

Conclusion

From both the index and model portions of the data, the superiority of Diesel technology over steam can be seen economically. The many different sections of the PowerPoint and the series of data all show that Diesels improved the economic conditions of the railroads, alleviating real economic problems faced by the Railroads. The data found in this spreadsheet fully supports the thesis:

Despite other contributing factors, American railroads adopted Diesel locomotives primarily because Diesel technology promised mechanical advantages to alleviate real economic problems.

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