Most of the postings on this thread tend to be suggesting that railroads are missing a bet by not going after the really small (2-3 carloads per week or less) customer. Even a shortline would have trouble making ends meet with a customer base of small shippers only and more than a few have failed for just that reason.
The business may be out there, is it profitable to pursue this business on a stand-alone basis (no rates based on incremental costs only)?
jeffhergert I've heard of 4 or 5 opprotunities for new business that my company passed by within the last few years. One or two were being developed by local management, but shot down by higher levels. Most of it could've been handled in existing trains, some of it (shuttle grain trains) would've required operating new trains. I've heard it was for different reasons, but one common theme seems to come through. Not enough volume per move. It's like all they know is unit type operations. If it isn't 100 cars at a time from point A to point B, they aren't interested. They've gone from the mentality that, "If it doesn't fit in a box car it doesn't belong on the railroad." to "If it doesn't fit in a unit train it doesn't belong on the railroad." (I include intermodal in unit type train definition, even though they aren't always a true unit train.) They've gotten fat on the low hanging fruit, but that tree is about picked clean. Jeff
I've heard of 4 or 5 opprotunities for new business that my company passed by within the last few years. One or two were being developed by local management, but shot down by higher levels. Most of it could've been handled in existing trains, some of it (shuttle grain trains) would've required operating new trains.
I've heard it was for different reasons, but one common theme seems to come through. Not enough volume per move. It's like all they know is unit type operations. If it isn't 100 cars at a time from point A to point B, they aren't interested.
They've gone from the mentality that, "If it doesn't fit in a box car it doesn't belong on the railroad." to "If it doesn't fit in a unit train it doesn't belong on the railroad." (I include intermodal in unit type train definition, even though they aren't always a true unit train.) They've gotten fat on the low hanging fruit, but that tree is about picked clean.
Jeff
CSSHEGEWISCH Most of the postings on this thread tend to be suggesting that railroads are missing a bet by not going after the really small (2-3 carloads per week or less) customer. Even a shortline would have trouble making ends meet with a customer base of small shippers only and more than a few have failed for just that reason. The business may be out there, is it profitable to pursue this business on a stand-alone basis (no rates based on incremental costs only)?
In isolation you are right, chasing that 2-3 carloads a week customer may not be worthwhile. The point is that there is more than one of those customers if there was a marketing and sales department that cared to look for them. In a metropolitan area perhaps find 15 of those customers and now you are talking 30-45 cars a week. It takes more work to find and service those customers, but on the other hand there will not be the same downward pressure on rates by competing railroads that unit train volumes invite.
Often the challenge for a shortline is that the industrial base has disappeared. Mighty hard to convince a factory to ship by rail if the site is now a shopping mall. And their good service can be compromised by the Class 1 as soon as the car is interchanged.
John
Many shortlines exist as aggregators of traffic. Someone saw the need, however the Class 1 serving the locale didn't feel it was worth the trouble (or cost) to staff a crew in a given location.
In some cases, a shortline may actually serve several isolated locations with the same crews. Podunk today, East Parsnip tomorrow, etc. They keep just enough locomotive at each location to do what has to be done. The Class 1 then makes one stop to pick up and drop off cars.
Some shortlines are part of a larger organization (think GVT, RailAmerica, etc), some were created locally to do the job.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
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