I spent much of this week watching trains on the CSX North End Subdivision, between Richmond, Va., and Rocky Mount, N.C. Usually, you can count on spotting on this heavily trafficked, mostly single-track line the Four Horsemen of the Apocalypse, their names being Hunger, Death, Pestilence, and Unexpected Delays. But they and their black stallions were nowhere to be seen this time. The North End Sub operated like a well cleaned watch, the dispatchers seemingly trained by Peter Josserand (Rights of Trains, 1945), or maybe the fictional Eddy Sand (The Boomer, 1942).
No, what’s different about the North End Sub this trip is local politics. Every front yard — even the water tower in sleepy Stony Creek — seems to spout a sign, NO TOLLS. Virginia’s governor, Bob McDonnell, is proposing to turn Interstate 95, the Maine-to-Florida highway, into a toll road through his state, as is already the case north of Virginia. A similar proposal is being debated in North Carolina.
Two things are immediately apparent. First, the idea is immensely unpopular in Southside Virginia, one of the poorer parts of the state. It’s as of British redcoats had returned. Second, the state has an expensive road to maintain and expand, but not the money to do so. Something has to give, in other words. To put it in concrete terms, Virginia projects the need for $12.1 billion to maintain and enlarge the busy highway over the next quarter century, but can expect only $2.5 billion in funding.
This is the whole interstate highway problem in microcosm. Our interstates are crowded and crumbling, and we lack the money to maintain and expand them.
Of course, Interstate 95 has a competitor from New Jersey to Florida: CSX. The railroad takes no position in the toll proposal, perhaps wisely. Clearly, it’s to the advantage of CSX to block tolls and starve the highway. By the way, that’s the likely outcome. It is politically possible to finance new limited-access highways with tolls. But I can think of few roads (actually, none at all) that were built as freeways and later turned into toll roads.
On the other hand, why isn’t CSX exploiting its crumbling competitor? Driving home to suburban Washington, D.C., traffic in the opposite direction south of the capitol city grinds to a standstill. Trucks seem to occupy half of the space — hundreds, thousands of them.
The answer, unfortunately, is that CSX does a poor job capturing this highway traffic. It does best going wooing trucks that ply I-95 the entire distance to and from Florida, which describes but a fraction of the traffic. It is poorly equipped to market intermediate origins and destinations.
CSX is not alone in this. Railroads as a whole are best in dealing with the J.B. Hunt Transports and Schneider Nationals of the trucking world over the highest-volume, longest-distance routes. But institutionally, they all seem to lack the ability to pick at the smaller origin-destination pairs and to reach out to the smaller truck lines. To put it another way, the huge Class I railroads are no *** good at all retailing. Wholesaling is what they know.
This I do know: It would be tragic for this nation to have the worst of all worlds, that is, crumbling, overcrowded highways and railroads unable or unwilling to taking advantage of that opportunity. There has got to be a better way to go at this. — Fred W. Frailey
greyhounds: You are absolutely right. Southern Pacific once dominated the movement of fresh produce from the West Coast to the East. By the time unregulated truckers were finished cannibalizing that business, SP had lost 90% of its produce traffic and earned the nickname SufferinPacific. By the time the ICC deregulated movement of produce it was too late to save the SP, which had an infrastructure that was designed to handle produce traffic..
Rail Pundit: You are correct about changing economics. About seven years ago we talked a lot about the perfect storm for truckers: Spiking insurance, high fuel prices, new EPA requirements on tractors that caused many carriers to stock up on the 2007 models and avoid 2008, and above all the creeping shortage of drivers willing to put up with the rigors of life on the road. The last factor was an outgrowth of the baby boom's getting older and settling down--the same thing that made it tougher for Class I railroads to retain T&E employees, but with a differential impact on trucking costs because compensation is so much higher a percentage of the total. Behind all of this was the insidious decay of the highway infrastructure, leading motor carriers to avoid some places and charge more to serve others.
At about the same time, as I recall, container movements overtook trailers and IIRC a lot of it was because import-export was riding high. Funny how things change. More recent growth seems to have been in domestic intermodal. Thus hope springs anew for what Fred advocates.
Rochester, NY was a loser when Conrail, following the Greenwood strategy, closed its intermodal terminal. The facility itself was fairly well-suited for the volume, having been built new in 1982 with state money for the short-lived RoadRailer operation and later re-purposed for general intermodal. Although Rochester is now commonly listed among upstate New York's "dead cities," a decent volume remained at the time that CR decided that everything would be handled through Buffalo. I would say "and Syracuse" but that is too risible to dignify.
What this meant was that every move to Rochester from the west would be saddled with an expensive dray. This expense--fixed with respect to length of haul--made Rochester intermodal uncompetitive for shorter hauls. I wasn't involved but would surmise that only X-Chicago and perhaps Chicago local to Rochester survived; everything else in the region was, in effect, kissed off. Hub centers with drays of up to 150 miles are not much debated these days. If Fred is right, they will need to be.
Fred, as I reflect on your thoughts with respect to I 95 and the CSX north-south main line the first thought I have is why CSX isn't preparing for additional volume that appears certain to materialize by restoring the second main track on the A line. Based upon my 17 years in engine service with Conrail and PC, single mains don't have the capacity to handle time sensitive traffic when volumes reach +\- 25 movements per 24 hours. There are simply too many "meets". On the few occasions that I have used Amtrak south of D.C., I confess I use Southwest more often, It has been the rule that I experienced delays due to single track segments. I don't recall ever being less than an hour late with one exception. On a Sat. Night trip we did arrive in New York a very pleasant 45 mins. to the good on the Meteor, Sat. night being a slow night for freight traffic there was less congestion.
I have appreciated reading the other comments your thoughts have engendered. Well informed opinion is stimulating and thought provoking. Please continue as often as you are able, I don't relish those long voids. Thanks.
My father works at a chemical wholesale warehouse in Saratoga Springs, it has its own rail siding right off the freight yard. There is a large industrial park with several rail customers including Quad Graphics and a big box distribution warehouse.
Despite having an almost brand new rail siding his company almost never uses it because they find the railroad too expensive or inefficient for their transport needs.
A couple of years ago they got a good deal on road salt from Michigan and received 12 boxcars of salt, but in the following years they have received the same amount of salt in 36 tractor trailer loads, because the trucking company consecutively underbid the railroads.
They use to receive several chemicals by tank car, and while this was always cheaper than trucking it in, they never knew when the tank car would arrive, so they gave up on that and went with the more expensive, but reliable trucks.
The D&H is of course owned by Canadian Pacific, which as recent articles in Trains point out is not too good at serving “retail” customers, who only want to order a few carloads a year. Perhaps the situation will change with Hunter Harrison now at the helm of CP.
It seems to me to effectively serve these smaller customers you need to run a “scheduled railroad” as CN has been described.
I’m very much reminded by that excellent article in the August 2012 issue on railroading in Hokkaido. To serve shorter city pair intermodal markets well you might have to set up shorter shuttle trains of roadrailers or containers that would operate on a regular schedule between terminals.
If traffic congestion gets much worse, for some city pairs this may become economical.
P.S. Rochester is no more a dead city than similar communities in Ohio. The growing passenger rail numbers seem to indicate that many people still live and do business here.
I agree with Old Head, to solve traffic congestion you need to know how many of those trucks on the interstate are local, and how many are long-distance.
If a section of interstate over several hundred miles is congested in general, than investing in expanding railroad capacity may do a lot to relieve congestion if many of these long-distance trucks could be diverted to rail.
However if most of these trucks are making local or regional hauls, let say from warehouse to store, than freight rail can’t do much. It’s too short of a market, unless you have shipments moving between two places with rail sidings. The door-to-door benefit of trucks wins hands down in terms of time, labor, and energy.
For example my hotel I work at receives housekeeping supplies from a warehouse in northern New Jersey, and the kitchen has daily delivers from Sysco, a food wholesaler which receives some of its produce from Railex in Rotterdam NY.
No doubt that these trucks contribute to congestion in the greater Northeast, but I don’t see how rail could replace them.
One reminder for those who like to cite specific examples of railroads inability to compete with trucks. In statistics, a universe of one is a lousy sample. There was a time when many shippers shunned rail intermodal because the service was unreliable. Intermodal today is much more reliable than it was just a few years ago. Truckers could underbid rail for loads. True, but that was more true a few years ago than it is today. Bottom line, if truckers ever paid their allocable share of highway costs, do you think they would still be able to undercut rail and intermodal rates?
Of course if trucker had to pay tolls when using the interstates, or pay higher fuel taxes, it would greatly benefit the railroads, if they expanded and innovated to get the traffic.
But for many shippers, especially for local and regional trips, which make up the vast amount of all transport volume be it goods or people, the door-to-door ability of the truck will win, even if it costs more than moving it by train.
For example at my dad’s warehouse, higher highway transport costs might led them to take far more deliveries by rail, especially if the railroad can give them a smaller time window of when they can expect the shipment to arrive.
But for all the deliveries they make to customers from factories to water treatment plants across the Northeast, these are “less than car load shipments” to people who don’t have rail sidings. The days when you would use rail freight to send such shipments from Saratoga Springs to Binghamton or New Bedford are not coming back if it means you have truck it to the freight depot first, only for the customer then to truck it from their local freight depot.
It makes far more sense to just drive it door to door with your own truck. A lot of countries from Europe to Japan have very high tolls and fuel prices, and yet trucking still dominates rail freight. Yes, there are unique differences in loading gauges, passenger focus, and other technical details, but this still doesn’t full explain why rail freight fell so far in these countries.
Railroads like JNR, BR, and the SNCF did make some effort to keep this traffic, but they still loss big time.
As for my hotel, with higher tolls the hotel supplier may decide to open a smaller warehouse in the Capital District to serve their customers in Upstate NY. This warehouse would likely even have rail access. Trucks would still make all the deliveries to the customers, but they would be driving shorter distances than currently by being based from a facility in northern NJ, thus saving fuel.
No problem. Its a highway. The funding will be found with nary a complaint or worry.
I wish it was so! The fact is that in NY State we lost one bridge (Crown Point at Lake Champlain) to lack of funding and we have another (Tappen Zee) which might fall into the Hudson if its untreated pine piles fail before we get the new bridge there built.
Even without big disasters, pot holes and crippling congestion cost individuals, business, and the general economy a lot of money. To oppose tolls and higher fuel taxes and accept in return poor roads and lengthy transit times is penny wise but pound foolish!
Huh? The Crown Point bridge was condemned, demolished and rebuilt in record time. The new span opened back in November of 2011. Why? It's replacement was anticipated (and funded) years ago. It was also anticipated years ago that the domestic highway network would need continously growing users and commensurate gas tax revenue to survive; which we had for close to 80 years. The growth stopped in 2007 and the Highway Trust fund became insolvent. No one wants higher gas taxes and no one wants tolls on "freeways." This is the ultimate no-win situation.
My wife and I spent about 13 years living in the Washington, DC metro area, 1992-1997 and 2000-2009. My hometown is SW of Savannah, GA, so we made a lot of trips up and down I-95 or alternative roads. South of Richmond, in 1992 there were many times when ours was the only vehicle in sight in either pair of lanes. In 2009, that was only very rarely the case. The number of vehicles on I-95 has very visibly increased over the years.
I have absolutely no problem in turning I-95 into a toll road, provided that trucks are charged rates which fully compensate the collecting authority for the damage trucks do to the roadway. That way, the vehicles which use the road pay the costs of the road, and those taxpayers whose vehicles don't use the road don't pay to maintain it. I would bet my house and my next year's income that if the truckers were charged compensatory tolls for their wear and tear on I-95, CSX would be drowned in a tidal wave of new intermodal business, just as the nearby surface streets and highways would be drowned by the increased truck traffic. DISCLAIMER: Now that I'm retired, I don't ever anticipate driving on I-95 again (at least if God is the least bit merciful to me).
During 2000-2009 we lived near the Dulles Toll Road, which runs roughly from the Washington Beltway westward past Dulles Airport. We used it regularly, even on the weekends, because it was much faster and less unpleasant than the alternative routes. We made a value judgement that the toll cost was "worth it". Others made a different judgement, which was their prerogative. The thing I like about toll roads is that it is MY CHOICE whether or not to pay the toll.
One of the other commenters (maybe more than one) made the point that without statistics showing the distances trucks are traveling on I-95 we are just generating hot air. That (those) person(s) are exactly right; one cannot make good decisions without good information. There are a great many short trips made on I-95 because it is the quickest and easiest way to go the few miles needed for a short trip. (Ever notice how much busier any interstate is near a sizable city? I sure have.)
I have no facts, but it is seems possible that railroads could make a profit on intermodal traffic in some of the higher volume "under 500 mile" markets. However, would the profit "enough"?
Those who trade railroad stock (Wall Street, if you wish) appear to have become very enamored with operating ratios, The run-up in CP stock based on a promise of a big improvement in the company's operating ratio appears to reflect that focus. So in that environment, would the CEO of any of the large publicly held railroads approve of an effort to develop a sizable market, that while profitable, might actually raise the operating ratio?
The operating ratio of a railroad - or any other business, for that matter - is a measure of how much of the business' revenue is consumed by operating epxenses. It is not of too much value as an abstract number, but is a very good analytical tool in conjuntion with other measures. As well as railroads have done in recent years, they still do not have unlimited amounts of capital available. That means management must allocate capital to investments that will provide the greatest return. So a piece of business may in fact be profitable and still go unfunded because other projects were judged to provide a better return on investment.
As for rail-truck competitiveness, I go back to a time when railroads were effectively limited to traffic moving farther than 1,000 miles, andf even that was kind of "iffy." As railroads have improved their operating performance and truckers increasingly have been forced to operate in the real world, that distance has come down. Today, on many commodities, railroads can be competitive to trucks at distances as low as 500 miles. Here I must repeat an earlier admonition: a universe of one is a lousy sample in statistics. Intermodal is perhaps the best example of the positive changes in railroading. Customers such as UPS, Hunt, Schneider and others demand precise operations - and they pay enough to be sure of getting it. Some who comment here really need to update their thinking by about a decade or two. Within the past decade railroads pretty much ran out of capacity. That allowed them to increase rates and still keep the business they had and compete for more. That's why you don't hear Class I railroad CEOs and CFOs going to investor conferences and poor-mouthing their own business - as we once did. Be assured that railroads will continue to invest in their businesses and will expect to be paid for providing service. It's what business is supposed to do.
In the 1960s, new highway bridges were built between East Hartford and Hartford, CT. They were all toll-financed but in addition, the CT Highway department put a toll on the age-old Bulkeley Bridge that linked the two cities through city streets. That's the only freebie to toll conversion I can remember.
There are a couple of issues floating around here:
1. Is a 500 mile haul "enough".
Well, it depends. Railroad do well when they can batch up decent volumes into train loads and keep the expensive fixed facilities busy. You need to have train-sized volumes and you need to enough work at terminal in order to be able to afford to run it. A small terminal with 20-30 boxes a day ain't gonna cut it. Too many work locations in the schedule and you will kill your end to end times and ability to run on time in a hurry. Gotta keep it simple or it will fail.
Length of haul is much less important that volume in the lane and dock to dock timekeeping. 500 miles is a good ball park figure because it is about what a trucker can do in a day. If you get much shorter than this, the fixed terminal costs and dwells and local dray become too large for competitive service.
2. Is Intermodal profitable?
Profit margin on intermodal is not awful, but it's not coal, either. That's with intermodal paying the full cost of their terminals and an allocated share of the network assets. But, as it grows, and the incremental revenue gets spread over the high, fixed terminal costs and track ownership costs, the margin should go up. It should be entirely possible to grow into increased profitability.
3. Is Intermodal fast enough?
That depends, too. Generally, dock to dock, intermodal is slower. Look at NS's schedules from NJ to Chicago, NJ to Atlanta and Chicago to Atlanta. All routes are about the same lenght +/-100 miles. NJ to Chicago has truck competitive schedules - a bit over 24 hours. NJ to Atlanta - a bit slower, but not terrible. Route between NJ and Manassas is really slow (almost 12 hours!). Chicago to Atlanta - a day and a half. You won't see a FedEx or UPS trailer on this lane!
So, can you get any Chicago to Atlanta traffic? Yup. The trucker can't make it in a day and he has to take rest, so the train's "slow and steady" is almost as fast as he can go. But, for that 500 mile trip where the trucker goes non-stop, you can't be poking along, taking 12 hours to cover the first 250 miles, etc. and still expect to have a competitive trip time at mile 500.