So, Tyson (the largest protein supplier in the USA) is going to put $300 million in to a new facility in Salt Lake City.
https://www.foodlogistics.com/warehousing/news/21068597/tyson-to-build-300-million-production-plant-in-salt-lake-city?mod=djemlogistics_h
What WILL the UP do with this? Tyson is going to bring in beef and pork from the Midwest and cut it in to "Case Ready" sale units in SLC. That's loads in and loads out. Money on the bottom line for sure if the UP can figure it out. (Case Ready means the retailer can just put it on the shelf for sale without much further effort.)
After delivery to a west coast population center the UP would have reefer equipment empty in areas that need a lot of empty reefer equipment to move their fruits and vegetables. Revenue loading in both directions! Can't beat it with a stick.
Marketing is a real weak point in US railroading. But let's see what they do.
It depends, would this be 'appropriate' business. Can it fit into the network without having to run an imbalance of trains? We need to run the same number of trains in each direction between two points. If we have 7 east and 8 west, the eighth train has to be 'fitted' into the remaining 7.
(Question. If those 7 trains are already running to capacity, what do we do with the business on the 8th train? Do we try to find business for an 8th eastbound train? Divide some of the eastbound business to run 8 eastbound trains instead of deadheading a crew and locomotives? Or do we just declare some of that westbound business as 'inappropriate' and drive it off? Never mind, I think I know the answer.)
PSR is a wonderful thing. It's saving the industry. All the class Ones were at death's door and would be in bankruptcy court before the end of the decade if it wasn't for the conversion to PSR. At least that's the way they made it sound when announcing the roll out of PSR.
Jeff
Loads going both ways was how Triple Crown made it work. Dropping the trailers onto the rubber wheels extended their territory beyond the railroad catchment area.
What makes you think UP will be involved or have the opportunity to be? I have never seen a Walmart or Target distribution center with rail service. So they won't haul it West and have the opportunity to haul anything East. For the same reason.
The drayage costs to get the meat from the packing plants to the IM yard to bring the train to SLC is going to be what kills this. Not one of the plants that is going to feed this place is within a 200 mile radius of a current IM ramp of the UP. Then when the meat is processed in SLC who knows how many stops each trailer is going to have for each customer involved. Also speed of service is going to matter with this. Losing 3-4 days in transit while making up trains to move it to the final city areas is going to kill shelf life on the final end of things for Tyson. Fresh meat is perishable and requires careful handling. Also it is heavy you weigh out before cubing out and losing 2 tons of cargo for a container is going to be a non starter for most grocery store chains. Why they want the maximum weight they can get delivered when it comes to meat if they are getting a trailer load.
That info comes from 3 of my drivers that are ex Prime drivers that were in their meat fleet. They used to have to play the 50 gallons of fuel across the nation due to how heavy Tyson loved to load them.
Funny thing how it is I see many Prime refrigerated units on UP container/trailer trains.
charlie hebdo Funny thing how it is I see many Prime refrigerated units on UP container/trailer trains.
Charlie there is one nice thing about being in this business it called being able to call the brokerage divisions of most larger carriers looking for return loads. Prime has one so does CR England along with JB Hunt and Schiender. I did some asking several months ago when my boss was thinking about entering the West Coast markets what they haul back from CA that are shipped via intermodal. Frozen and prepared goods under refrigeration was what I was told. Why because if they lose a couple days no big deal on something with a shelf life of a year in a frozen item. They still run produce in OTR team service along with fresh meats. Processed meats like deli meat and hot dogs can handle the delay.
charlie hebdoFunny thing how it is I see many Prime refrigerated units on UP container/trailer trains.
Russell
tdmidget I have never seen a Walmart or Target distribution center with rail service
Which plants are going to supply the Utah facility? I see a lot of Tyson, formerly IBP, pork and beef plants within 200 miles of a UP ramp.
A few years ago Tyson wanted to build a similar type facility, but maybe not as big, along the UP in central Iowa. The plant would've been fed inbound by reefer cars. Outbound probably by truck. UP wasn't interested then.
Costco is building a large chicken plant in Fremont NE. The locals there said they approached UP about serving the plant. Again not interested so I think BNSF is going to serve them.
And these were before the hyper selectivity of business that comes with PSR.
Shadow the Cats ownerThe drayage costs to get the meat from the packing plants to the IM yard to bring the train to SLC is going to be what kills this. Not one of the plants that is going to feed this place is within a 200 mile radius of a current IM ramp of the UP. Then when the meat is processed in SLC who knows how many stops each trailer is going to have for each customer involved. Also speed of service is going to matter with this. Losing 3-4 days in transit while making up trains to move it to the final city areas is going to kill shelf life on the final end of things for Tyson. Fresh meat is perishable and requires careful handling. Also it is heavy you weigh out before cubing out and losing 2 tons of cargo for a container is going to be a non starter for most grocery store chains. Why they want the maximum weight they can get delivered when it comes to meat if they are getting a trailer load.
Oh pshaw!
I do appreciate your knowledge and insights on trucking. It greatly adds to the discussions because it defines what the railroads have to do to be competitive. I sincerly hope you remain on the forum and continue to provide your knowledge of trucking.
However, you are somewhat lacking in your knowledge of railroad capabilities. Don't feel too bad about that. From my point of view the Union Pacific Marketing Department also lacks that knowledge. (I'm hopeful that they'll surprise me some day.) Criticism won't do any good. If they don't know, they don't know. And disparaging them doesn't add knowledge.
It's just not, as you've falsely said, 200 miles from a Tyson plant to any UP intermodal terminal. It's 95 miles from Dakota City, NE (Major, major Tyson beef slaughter facility) to Council Bluffs (UP terminal). That's certainly within economical drayage distance. It's 122 miles from Storm Lake, IA (Tyson pork) to Council Bluffs and that's also an economical dray. I can go on if you so desire.
More importantly, the UP could actually put an IM terminal in the Sioux City area. This would cut drayage expenses greatly. It doesn't have to be a mega expensive, mega terminal. (Now here's when I get in trouble.) A one person crew could take the loads from Sioux City on a train to Missouri Valley Jct. and have them picked up by an existing train going to, or through, Salt Lake City. I reason the incremental cost to be low and the incremental revenue to be sufficient. The rate of return on invested capital should be sufficient to justify any expenditures required.
But...
They have to know what they're doing in order to pull this off. And, as I've said before, marketing and market development are very weak areas with US railroads.
As to the outbound from SLC, it can go on existing Z train schedules with very low incremental costs. Money in the bank.
As I see it, here's the essence of the problem:
outcome = resources x will.
Outcome is a function of resources times the will to get the outcome. Union Pacific certainly has the resources. But, do they have the will? If there's no will all the resources in the world produce nothing. In my way of thinking, the UP lacks the will to develop such markets because they don't see the opportunities. And that's a marketing failure.
It's not something the railroad can't do. It's something the railroad doesn't understand that it would be beneficial to do.
tdmidgetWhat makes you think UP will be involved or have the opportunity to be? I have never seen a Walmart or Target distribution center with rail service. So they won't haul it West and have the opportunity to haul anything East. For the same reason.
I'm going to respond to this because it's like a hanging curve ball.
The first and last miles are on rubber tires. Trucks do a better job at pick up and delivery. (Unless you're feeding oil to a refinery or something similar.) Rails are better for longer line haul.
Use each tool (truck or rail) to its best advantage.
I called up a carrier that does drayage for a larger IM yard and one my boss has a very good relationship with near us. They are the ones that took over the UPS loads we could not cover for us last year. He also was my hubby's first OTR bossman and is one heck of friend to our family also. I asked him how he gets paid for drayage of the trailers they haul he has 2 drivers that do it for a larger 3PL provider. He gets paid for all miles those being HUB miles that his truck turns from the time it leaves the IM yard to the customer and until it returns with the IM trailer or container and chassis. He also gets a hourly rate if the driver is held up at the IM yard and customer that they are picking up or delivering to. Also the 3PL carrier he works for trys to keep things withing a 100 mile air radius of the yard they are dealing with. Why that radius no logbook required for the driver. Over 100 miles then the HOS and Elog requirements kick in and then the Carrier is subject to FMCSA audits.
We have a Tyson DC near us. My husband has several friends that drive for the larger carriers that service that yes he has been out of the industry for almost 2 decades now but still has his contacts and drivers that he stays in touch. There are days when we get phone calls from drivers loading in Ottawa the town north of us and it is one of his friends asking for a home cooked meal and a place to do laundry. We of course say yes come on over if they have time. Everytime they call and ask they say Tyson is saying at least 24-30 hours before their load is ready. These drivers call Tyson the waiting reset. Why if you get there by the time your done waiting on your load you have had enough off duty time to get a reset of your HOS done.
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