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Why do railroads run intermodal so fast?
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A long reply, which may ask more questions than it answers[8)]. <br /> <br />[:)][:)][:)] <br /> <br />Gabe, you asked several challenging questions in your original posting, with more to follow. I do perceive a lack of “core” questions that might have been addressed by others prior to in-depth discussion of turbinage, demurrage, etc. I am certainly grateful for the many, many intelligent and informed answers and comments you received; therefore so please don't think I'm being patronizing if I play this a little bit along the “For Dummies [like me!] approach….. <br /> <br /><i>”The time it takes to transport the containers from the factory in China to an intermodal port, the time it takes to load these containers onto the ship, the time it takes for these ships to transport these containers several 1000s of miles at 15 knots, the time the ships spend waiting for a berth to open up in port, the time it takes to unload them, the time it takes to sort them, and then the time it takes to load them on the train. <br /> <br />It seems to me that the time saved by running the train at 60-65 mph instead of 40 mph is so meaningless compared to the overall time it takes to ship the container that the benefit is almost unnoticeable. It is like trying to save $1 by buying the small beer at a NFL football game after you have already spent $300 on the tickets and $200 on the other over-priced amenities.</i>” <br /> <br /> <br />I agree with everyone about the basic trade-off between speed and cost (which, in RRing, often stems from the trade-off between speed and TORQUE.). Coal is a great example of the freight that's not in a hurry. If you can put it on something slick (the Mississippi River, the Teneessee-Tombigbee Waterway) that actually is moving the way you want it to go, then that's about the cheapest of all. Don't look for barges to disappear anytime soon; in fact, barge-makers’ stock has begun going up. Second cheap, of course, is dragging it over water—such as exporting coal down the aforementioned waterways to South America (Or maybe I’m just worked up over those soft-core coal-mining vixen in the GE commercial!) <br /> <br />It sounds simple, but it is very high-tech, and along with economies of scale the more high-tech it is, the cheaper. Think of the scene with Marlon Brando unloading bananas in the movie “On the Waterfront” and how that might proceed today. Much less labor-intensive! <br /> <br />And, I am compelled to say that other than air, the most expensive is to consolidate it (COFC, TOFC) and put it on something man-made but low in friction: a semi trailer, a scheduled intermodal run. I think everyone's right in that higher fuel costs hurt everyone, but turn out to be a comparative advantage for the RR's over individual or individual-under-contract long-haul truckers. (There was a fascinating article about five weeks ago in THE NEW YORKER about two guys' deadheading fresh, live lobsters from Nova Scotia to UPS' mega-facilities in Memphis, which will now keep the crustaceans alive until their customers call for them. The article is as much about how the shipper becomes the de facto wholesaler as much as it was about two truck drivers avoiding I-81. This makes a point about service bundled into transportation, which I will return later.) <br /> <br />If I may give fle***o your concern about the inefficient time lag between China and store shelves, why would, say, Wal-Mart need weeks or months ago (probably weeks) to get its action-figures cued to the new "Star Wars" movie on a slow boat from China and then a moderately expensive drag from Long Beach or wherever to Proviso or wherever then Albany or wherever. <br /> <br />I apologize if I missed something, but I didn’t see people making hay out of the fact that these days, the super carriers of goods or petroleum are HUGE--too big for the Panama Canal. So sending out a couple of ships that are merely medium-large to transit the Canal would be inefficient, and much worse would be sending out one of those new whoppers and then intermodal'ing the goods twice across the Isthmus to another waiting super carrier. [Trivia Note: The Genessee-Wyoming owns the Panama Canal Railroad.] <br /> <br />So, let’s say I'm Wal-Mart and I want my zillions of cases of Obi-Wan Kenobi figurines to the USA. Even if it were cheaper (and it isn't) to go round either Cape than use a slow boat from China, I suspect reliability is the norm. Nor is it a matter of air-freight being cost-effective when shipping light but small like Obi-Wan figures (up in the air, weight still counts a lot, as well as space.) Wal-Mart will plead that masses of figurines meet “consumer demand,” but try demanding that Wal-Mart ship via DHL the right kind of Obi-Wan for my niece. I wouldn’t think of it; but it isn’t because the doll is no longer profitable. It would be, but not as much as it is now when Wal-Mart has established itself as more than a dominant force but a market-maker Note that store leaders get little if any advance word on what’s coming into the store and have less than no input about what they’d like to see on their own shelves.. Now that twenty-dollar GE iron, also from China. No, nobody’s about to air-freight that ‘cause heavy still matters in air freight and irons – well, they’re heavy as irons (;)[:p]. If it were a new steam-release valve for your new $175 Krups steam iron, it might get air-freighted from New Jersey or Germany or the Far East. <br /> <br />Gabe, I didn't think of this until you challenged us re logistics but shipping deadlines, like transportation boxes themselves, can have different "modes." Wal-Mart is in no hurry for the Star-Wars figurines because they started chatting with George. Lucas and friends a good three years ago. Two years ago people (frequently now abroad) were designing them, then W-M bargained with Kenner or Mattel or whomever for specs and product launch (not for nothing do our nation’s largest corporations have big shiny regional hdqtrs as close as possible to Wal-Mart hdqtrs in Bentonville, AR, and the process is more integrated than I’ve made it seen.) Finally, W-M has probably already dealt with the shippers (BNSF, UP, CN) or expediters/logicians (Pacer International, Inc.) a LONG time ago--maybe as much as a year or more. (Point to ponder: does Wal-Mart draw up its own cost-of-fuel contracts to counter the RR lines’ guarantee-of-escalator contracts? Crazy if they don’t.) So a fuel-efficient super carrier takes ten days to a fortnight instead of a week. Who gives a doodle? Wal-Mart’s got the exclusive on Obi-Wan and Barbie, so there’s nobody out there to sneak-release them first. So the Guangzhou-to-Shanghai Railroad is going to triple its track, reducing from 3 days to one the time it takes to traverse the entire main line? Big whoop! (But it will matter for average carless Chinese who will see their trains jump from a 1910s level of speed and comfort to a 1950s.) Also, that extra day or two may come in mighty handy, especially if there’s a typhoon or hurricane to be dodged. Perhaps our shipping mavens will speak to that. <br /> <br />So with a combination of reliability, planning and bargaining for the most efficient and cheapest routing, those Obi-Wan Kenobis and Barbies and that wonderful $20 GE iron, all from China with their pennies-on-the-dollar-and-you'd-better-like-it labor, at Wal-Mart, can be so INCREDIBLY cheap! My hunch is that Wal-Mart, after hitching their wagon many years ago to Messrs. Lucas and colleagues, operates on fairly pessimistic supply-and-transportation paradigms, because the figurines, much to this Uncle's consternation, always seem to wind up in the stores about five weeks ahead of the movie premier. So why doesn't Wal-Mart hold the items at its (global) intake facilities or ports, or at its (regional) warehouses? <br /> <br />BECAUSE THEY CAN'T. And that's the mixed blessing of "just-in-time" inventory. Nothing can sit still! (Canadian National's 2004 report very cleverly has as its cover photograph an empty rail yard, and inside the caption explains that all CN's motive power and rolling stock are out there earning money, not idling away at the yard.) So that’s the devil in the details: if the stuff is punctual and not damaged (however slow) that’s fine, as long as it’s punctual. Punctuality counts too, once the goods enter Wal-Mart’s custody. But for slightly different reasons: not only is at (1) too “hot” an inventory environment these days to cool things by lying around US warehouses or pay demurrage or whatever; but (2) whenever Obi-Wan shows up, even if it’s five weeks early, there’s a good chance that Wal-Mart will do its best (sans heroics) to make sure that the figurines in Portland, OR don’t arrive that much earlier than those destined for Portland, ME. So slow-boat from China is one mode, and TOFC, stacks or daredevil trucking teams are another shipping urgency—one of the concepts of intermodality is, in fact, that things like schedules that seem counterintuitive on the surface really aren’t once an understanding is reached that ASAP is good for some situations and not others, and it almost always costs more. Let’s not assign morality to transportation: It isn’t the least bit “hypocritical” to take ultra-slow crossing of the Pacific with medium-to-very fast ground shipping here at home. It’s the consolidated results that matter; as I keep stressing reliability as well as a coherent cost. Perhaps instead of asking “Why is intermodal so fast” you might have asked, “Why can’t everything be as fast, ASAP?” <br /> <br />Which gets me to unit trains. Gabe, I don’t think your idea of speeding up unit trains is a great one, for reasons that have been touched on as well as a couple of new ones. First, in the eternal struggle between torque and speed, “patient” coal or iron filings or gardener’s stone (but mostly coal), it’s best to sacrifice speed for torque. And that’s why the unit coal trains I see in Rochelle, Ill., headed for places like Wisconsin Power are pulled by a two or three frequently begrimed and old (probably all-DC) units, with perhaps a pusher on the end. A power plant is a great example about a service/industry that doesn’t have to worry too much (barring strikes, fuel shortages, inflation!) about what it needs—it needs the specified coal, it needs to be absolutely sure enough is on hand at all time, and (a luxury in today’s just-in-time era) it probably has a pile or two of “patient” coal out back (again coal supplies, unlike Omaha Steaks or Obi-Wan, don’t mind getting dumped on the ground and even snowed on a little). <br /> <br />So, for a coal unit train the operating rate of speed has a lot to do with money, and possibly also a lot to do with local politics. According to figures (a couple of years old, I admit) from the DM&E, it takes two and-a-half minutes for 120 cars of an empty unit train to pass by a crossing at 40-45 mph. Make that 150 cars of laden coal train with a speed below 35 – it may be the cheapest in terms of fuel to go at 20 but a third more cars and almost two-thirds less speed is simply unacceptable. Even a third more cars and only a third less speed (35 mph) is pretty wearing. Studies have shown that citizens are OK about waiting for a slow train at a grade crossing for up to that 2.5 minutes, but at about three (all of 30 sec. later) they start getting antsy and they REALLY heat up after four! For more background, Google for “DM&E,” “Schieffer” “unit trains” and “Rochester, Minnesota.” I suppose with today’s huge, usually hump-free and LONG logistics centers, the Class One’s could probably marshal up 200-car unit trains. Bad idea! Even if three weekly dumps at that Wisconsin power plant would equal the tonnage of five Mon-Fri 120-yard trains, consider that: (1) incremental savings would be slight; (2) the electric co. likes to hear the reassuring thunder of coal every working day; and (3) most of all, it would be totally unacceptable to folks in places like Rochester, MN and smaller communities like Rochelle, IL, where grade crossings are the norm. Moral: for unit trains don’t think “wayward shuttle,” think “Berlin Airlift.” And, with today’s longer sidings, several coal trains in motion will not “clog” the system. Thank modern CTC. <br /> <br />I think the people who spoke before me are using their transportation expertise and common sense and rightly judged consumer goods to be in an intermediate position of urgency between unit train and UPS. UPS intrigues me. Lots and lots of TOFC with the UPS label pounds over that double diamond at Rochelle, Illinois, mostly BNSF but some UP; and once in a while, when such trains are running slower than their usual 50-ish mph, I can hear machinery humming and see fans whirling in some of the UPS trailers. Is it a ventilator? Or is it even possible for generator/alternator to summon up enough power to run refrigerated or frozen? (I’m not talking about fridge cars, mind.) <br /> <br />For that matter, when I have Amazon books shipped at their cheapest level of delivery, that usually involves separate shipments, all of which I could track out of Seattle or northern Nevada (near Reno, I think); and the same for my Tampa cigars that routed through Jacksonville, FL, then Lexington, KY, then Dolton, IL (south suburban Chicago). For the most part, I no longer can; instead I receive a cold but correct computer message to the effect that “You’re not a corporate shipper so all we’re going to tell you now is that your order is scheduled to get to you on time.” Could UP be marshalling up parcel trains at Global III to head into Chicago? Or BNSF sending their stuff—it’s quite possible—all the way downtown in Chicago to that huge UPS hub? The stuff is frequently late (but it was frequently late when it checked into Chicagoland at Dolton, having come up the Interstates by their trucks). Could it be that some company like Pacer, International is routing the stuff by rail? (Interesting company; I have their 2004 Annual Report in hand. Made a ton of money last year, and, if “non-asset-based” means what I think it does, they don’t even own most of those pretty blue Pacer/Stacktrain mods.) Perhaps the transport pros would like to speak of the phenomena of service companies like Pacer (again with the service!). <br /> <br />The chain of supply under "just-in-time" regimes may indeed be too tight. On the other hand, new technologies have brought new cost efficiencies to shippers. This is Rochelle scuttlebutt, but it's probably true: the local farmers can get a dime more a bushel for their corn (a not inconsiderable amount) if they bring it straight to the railhead itself and not to the local elevator! Ah, a new kind of service--or even if it's foregoing service, there's a calculable saving! <br /> <br />Oh brave new world...[:0] <br /> <br />In closing, who among our ocean-transportation experts can recommend the biggest trans-Pacific companies? I have an A.R. from Alexander & Baldwin, but doubt that that is anywhere near the biggest carrier, except possibly to Hawaii. <br /> <br />
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