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Intermodal Trains: a few questions
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[quote user="gabe"] <p>(2) Please forgive the facile nature of this question, but is it just me, or is the race to double track the Transcon going to produce some really big dividends? Railroads already seem to be making a lot of money with intermodal. If they can now have the efficiencies of 10,000 foot trains, that seems like it is throwing gas on the fire in terms of profits--less dwell time in sidings, the ability to work around maintenance, quicker running times, the ability to not limit train length depending upon sidings, etc.</p><p>[/quote]</p><p>Intermodal is "making a lot of money"? Perhaps in the case of UPS trains (e.g. high margin traffic), but not in the case of steamship intermodal, and the LA-Chicago transcon is primarily an import intermodal conduit. So in that vein the answer is no. </p><p>We had a discussion a while back about this, and the consensus of those in the know was a tacit admission that import intermodal does not make a lot of money <em>currently</em>, but there's a bet that the next round of ocean liner rate negotiations will produce greater pricing power for the railroads, and then the railroads will be able to pay for all that new trackage and all those new well cars. In the meantime, the railroads will cross subsidize import intermodal with higher than justified rates on domestic grain, coal, and chemicals. </p><p>My opinion is that the railroads (BNSF in particular) will never have enough pricing power over import intermodal to justify these wasteful expenditures on double tracking the ex-SF trancon. There's just too many competitive options available to the ocean liners to allow the railroads to charge a price that actually covers the cost of all these projects. Thus the cross-subsidization of imports on the backs of captive domestic shippers will continue indefinitely until the Congress finally puts the kibosh on this activity.</p><p>[quote]</p><p>(3) I know I am going to cause some inclement posting by asking this, but why is there no race to double track the lines leading to the PRB?</p><p>[/quote]</p><p>They are for the most part. The problem is that we need more than just double and triple tracking existing PRB lines - we need new double track corridors in and out of the basin independent of the current lines, if for no other reason than to allow a continuation of coal deliveries when the next PRB derailment takes the new triple track out of service for weeks on end.</p><p>The DM&E project would have gone a long way to alleviating this problem, but sadly the FRA buearecrats foresook their sacred oath to serve the public and allowed BNSF de facto veto power over the project.</p><p>There! Does that stir the pot enough for ya?<span class="smiley">[;)]</span></p>
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