Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote]QUOTE: Originally posted by greyhounds [quote]QUOTE: Originally posted by BABetts Interesting, Limestone which rarely moves more than 100 miles, seems to move at around $0.03 per ton/mile (30 mills) in multiple private car units. Almost twice as much as coal. But the railroads call it low profit freight. BNSF has more than doubled that rate on recent quotes (ie $0.07 ton/mile) and says this is because of conjestion (everywhere they operate?). Yet railroads in general refer to coal as one of the primary and most profitable commodities moved. This, as they go tipping merrily down the path to re-regulation. [/quote] This is a bogus comparison, similar to what some folks here were trying to do with the Montana wheat. If you compare the "ton mile" charge on a short haul move, such as limestone, with the "ton mile" charge on a long haul move, such as Powder River Basin Coal, you're making an invalid comparison. Each move has certain common cost components that do not vary with the mileage. These are going to be the same for each move. Since there are fewer miles in the limestone haul to spread these charges over, they are going to produce a higher per mile, or per ton mile, charge on the shorter haul. It's math. The most efficient thing a railroad does is run a freight train down the track. It's everything else they have to do to get the trains togehter and take them apart (along with such things as billing the shipper) that drive up the costs. Many of these costs do not relate to the distance the shipment actually moves. So shorter hauls have higher unit costs than longer hauls. Again, it's math. [/quote] Greyhounds, you just stated that it is carload switching that ups the costs of single carloads vs unit loads such as coal. We already established that BNSF charges higher unit train rates for Montana grain shipments than comparative PNW or Midwest unit train rates, e.g. it's got nothing to do with switching costs or distance. What you have inadvertently stumbled across is that switching "costs" are responsible for half the total carload rate. This is where railroads are losing it. The push for greater economies of scale via longer train consists is eroding the benefits of rail transport for single and multi carload lots. The D&RGW model of shorter more frequent trains was the ideal for truly efficient customer responsive business relations. With D&RGW now a fallen flag, this rather expansive niche between truckload and unit trains economics goes wanting.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag