Unit Grain Train

[Anonymous]

I saw my first 100 car unit grain train. Being new to the hobby it was quite surprising to see.

It was a UP with 4 locomotives loaded with 100 hopper cars loaded with corn that came from a grain elevator in Evansville, WI.

Anyways I have a question about this.

I've heard that RR will give a grain elevator a discount for 100 car loads shipped at once (If Im mistaken please correct me) but I was was wondering, how much of a discount is it? Also is it based per ton or per bushel or something else?

And one more question.

When a RR is hauling 100 cars full of grain, does that mean that all these 100 cars will go to the same destination or will they be branched off along the way, say 10 will go here, 10 there , 20 here, and so forth?

Thanks

[PNWRMNM]

Steve,

The answers to your questions are all in UP grain tariff, which neither of us have.

In general, carrier will publish single car, 25, 50, and 100 car rates. Block sizes vary BNSF to Pacific Northwest is multiples of 26, UP to PNW is 27. Lets assume 25 and I would guess train going to Gulf Coast for export.

Gulf Coast singles are probably about $2000 per 100 ton car. 25 car block about 10% off, and 100 car another 10%. Rough numbers obviously. 110 ton cars should be 110% of 100 ton car rate. No sense giving the shipper the benefit of railroad's investment in new cars.

The train you saw could have been a single 100 car unit, two 50 cars or four 25. Each unit billed to single consignee. If you want five here and ten there is single car service and will be billed accordingly. Unit train is all to one customer on one bill.

Mac

[Anonymous]

Class 1 railroads do offer marketing incentives based upon the size of a unit grain train. Depending upon the number of cars shipped from one origin (some roads allow smaller elevators or short lines to aggregate loads) to one destination. So, no they don't drop them off along the way if it is a true unit grain train. Incentives also require the destination unload the cars within a set time, usually 24 hours to qualify for the incentive. This is to keep the cars turning, an important consideration expecially in a year like 2003 with bumper crops and car supply issues.

LC

[Anonymous]

Steve: We're working on an all-grain issue. It's been in progress for over a year, because it's turning out to be so complicated. Grain is what I like to call "inconsistently consistent." Or, "regularly irregular." That is, there are patterns, but they are short-term and constantly shifting. This is very unlike coal, which moves highly predictably.

"Unit grain train" is actually a misnomer. Until recently, there was no such thing, even though they were called that! To add to Mac's and LC's info, grain moves in the following ways:

single-car: a car on an individual waybill running by itself from origin to destination, though it's probably moving with other grain loads, at least at first.

10-car block: offered by some railroads; used primarily by shippers such as small food plants that are "landlocked," and cannot expand to accept more cars at a time. These are common east of Chicago.

25, 26, and 27-car blocks: very common. Usually four of these blocks will move in one so-called "unit train" to one export elevator or feeder, though they originated at four different country elevators. BNSF uses 26-car blocks for wheat and 27 for corn (corn is slightly less dense); so you get the same number of bushels this way whether it's of corn or wheat. The idea is to bunch blocks into a single train as quickly as possible and leave it untouched as long as possible. Flour mills, ethanol plants, and corn sweetener plants commonly purchase in 26 and 27-car blocks; they are rarely large enough to take bigger blocks.

52 and 54-car blocks: also very common. Just a bigger version of the 26 and 27.

Shuttle trains: 110 cars on BNSF. These are true unit trains, and move on a single waybill from a single origin to a single destination. But unlike coal, grain doesn't move in large enough quantities, consistently, that you will run them over and over and over again. So they are sold in one-train, five-train, ten-train, or monthly or yearly increments. The time increment contracts guarantee the shipper a set number of train starts in that period, on a take-or-pay basis. Shuttle trains mostly move to export elevators, feeders, and a few really big ethanol plants. The growth market is feeders and ethanol.

Shuttle trains are restricted. To get a shuttle train rate, both origin and destination must be able to accept all 110 cars and the locomotives on their own track, off the main track, with just one "switch" allowed -- that is, the train must enter the track all as one. If you have to break the train apart and switch it into several tracks to get it delivered, you have more than one switch, and you cannot get the rate. The train must be loaded in eight hours or less, and unloaded in eight hours or less (those times were as of a year ago, and may have changed). There are about 250 shuttle train compliant elevators in North America. Loop tracks are becoming the standard on these now, just like a coal mine or powerplant.

Adding even more confusion, railroads will (for a price) permit shipper and consignee to have multiple origin and destination points even with blocks. On Kansas City Southern, where I used to work, this was the common pattern. We'd get a 110-or-so-car "unit train" off the I&MRL. It would typically set out cars at each chicken feeder it passed beginning at Anderson, Mo., until by the time it got to Heavener, Okla., there was nothing left but the power and a Fred. But the train was not even blocks moving from one elevator to one feeder that happened to be coupled together. It would arrive all mixed up, with cars from six or seven elevators scattering to five or six feeders, and we'd have to sort it out somewhere -- usually on the main track at Pittsburg, Kans. And yet we still called this a unit train. About the only thing "unit" about it was that it was all corn in covered hoppers.

Total nonsequiter here that I can't resist: The D&RGW used to have what it called "the non-unit unit train." This was a coal train that came off the Moffat every other day or so with all the spot orders and small blocks that ran to places like Coors Brewery, Ash Grove Cement in Missouri, and the powerplant at Mason City, Iowa. Its cars might have originated at every mine on the Moffat, and was of no consistent length. It also hauled the odd freight, like covered hoppers of prilled ammonium nitrate (mixed with diesel fuel, the standard explosive in open-pit mining these days) and wheat loaded at Craig.

Railroad rates are based on the carload and leaves it up to the shipper to determine if they want to fill the car or not. If an elevator reaches a car's weight limit and the car is still half-empty because their wheat is wet, that's their problem. But the consignee is usually buying by the bushel, because they surely do not want to buy water. So, there you have another complication in this business. (Coal is similar: railroads move it by the ton, powerplants buy it by the BTU.) You have to convert units to figure out that if you want 100,000 bushels, you need to order so many empty covered hoppers for a given moisture content. Oh -- and the ocean shipping business sells volume. They don't care about tons. Luckily bushels and cubic feet are a simple conversion.

Wheat is a little heavier per ton, so you can load to the 286,000 lb. weight limit in a 4750 cubic foot capacity car, whereas corn takes a 5161 cubic foot capacity car to make the same weight limit.

The key thing to know about unit trains is that they are not a technological entity, but rather an organizational entity. The classical definition of a unit train is one shipper, one consignee, one waybill, no switching en route, and a lower rate compared to single-car. Coal works wonderfully for that. Grain simply doesn't move in large enough quantities, is too seasonal, moves in flood one day and doesn't move at all the next depending on price, has too many origin and destination points, and has too many grades as a commodity to justify true unit trains. The U.S., for instance, grows eight different types of wheat, and a flour mill mixes and matches depending on price and what type of product it wants to produce (bread uses a different type of flour than cookies, for example), whereas a power plant is designed for a very specific coal specification and can't easily or readily switch to another.

[Dough]

Wow, that is great. I live near a Cargil vegable oil facility in GA and thier are also a number of grain elevators that distrubute corn feed to chicken farmers. I have seen the long 100 car soybean and corn trains come by for many years.

Another related question. Last weekend I noticed that a lower door on on a hopper carrying corn must have come open. It emptied its entire load all the way down the Gainsvile Midland line. Any idea who is responsable for this? I'm sure that their are going to be a bunch of unappy people soon...[;)]

[jeaton]

Dough. For the most part and unless there some special provisions in a contract between the shipper and the railroad, the railroad is liable and will pay for the loss.

Steve As you can see from Mark's discourse hauling grain is a very complicated issue, and I am not surprised that a year has been spent by the magazine staff in an effort to produce an article. The full story could probably fill a book.

Back in the late 60's, the Illinois Central RR actually offered what was called a "Grain Rent-a-Train." For $1 million a year and so much per train mile, a grain shipper would get the use of 100 grain hoppers and power for as many shipments as possible in the year between any points on the IC. This structure had interesting benefits to both the shipper and the railroad. As the shipper made more shipments, his cost per bushel declined while at the same time the revenue to the railroad increased.

It was actually used by a grain merchant to ship corn from central Illinois to Baton Rouge for export, but eventually was ordered canceled by the Interstate Commerce Commission as a violation of the Federal laws that controled those things at that time.

[joseph2]

I work at a grain elevator that ships 65 car unit trains to the south-east states.Who ever opened that car commited a federal crime.Once,during a covered hopper car shortage we shipped out a 130 car unit train of open (coal) hoppers of corn.The cars sat on a siding for a few days and started to ferment ! Our motive power is a pair of 35 ton GE's and a NW2.

[corwinda]

QUOTE: Originally posted by Dough
[Another related question. Last weekend I noticed that a lower door on on a hopper carrying corn must have come open. It emptied its entire load all the way down the Gainsvile Midland line. Any idea who is responsable for this? I'm sure that their are going to be a bunch of unappy people soon...[;)]

I'll bet there were a lot of happy birds, though. (And mice, squirrels ...)

[kenneo]

QUOTE: Originally posted by Mark W. Hemphill


Wheat is a little heavier per ton,

[oops]
Maaaark, really! Heavier by the TON? Bushel, perhaps. [#oops]

One addition to the comments here. If one (or more) of the cars go bad order along the way, they can be (and usually are) rebilled as single car moves but retain the multi-car rates and restrictions it was originally billed under.

Lots of room for fraud here, and believe me, the grain folks will try it from time to time. Gives the demurrage clerks a real headach and the unload point big demurrage bills that they don't expect.

[Anonymous]

You got me, Eric!

[PNWRMNM]

Eric,

Mark is correct about unit grain trains being a marketing thing as much or more than operating. I have never heard of railroad trying to rebill a car that got set out bad order. They havent got the clerical force to do it any more and would just irritate the customer. I am 99.9% sure they do not try it. If I was customer I would not pay that bill and carrier would end up writing it off. If railroad had a local marketing guy, he would probably buy the customer lunch to make up for the bill!

You are right about every customer wanting the railroad to give him an unfair advantage. This is not it.

Mac

[PNWRMNM]

Eric

I appologize. I misread your post. You did not claim carrier would try to get single car rate, which I thought was you point.

In fact all cars move on one waybill, with all cars listed. Is no need to rebill. Waybill data will be retained in computer while any car on bill is still moving to customer.

Mac

[Anonymous]

Thanks for the info guys.

Very confussing, but than again Im new to the hobby.

Take Care!

Steve