just curious...

[CSSHEGEWISCH]

The ability and willingness of BNSF to say "NO" to a major customer request is a good indication of a management that knows how to run a railroad. They probably felt that UPS's request would be more bother than it was worth and turned it down.

This doesn't seem to be a new idea since ATSF was one of the last major carriers to start running stack trains, probably for similar reasons.

[Anonymous]

I'll offer an observation or two. BNSF seems to be doing fine. The fall will be a good test of that apparent well-being, as grain and intermodal peak simultaneously. BNSF's northern corridor may be particularly challenged, depending on international grain flows. Heavy Pacific basin grain demand will see unit grain trains and international double-stack trains contending for track capacity. But this is a familiar challenge for BNSF management, and should be handled capably. Expect the usual carping from grain shippers, though, and watch the weather. An early Montana/Dakota winter would be bad news.

BNSF's Chicago-LA corridor is the intermodal heart of the system, and I believe this is where the real differentiation between BNSF and UP has occurred as intermodal volumes have grown. The BNSF route is largely double-tracked, and the remaining gaps are being filled. And BNSF has built an intermodal operating and marketing capability over the past 15 years that UP simply hasn't matched. I date this from the time Santa Fe reached agreement with J.B. Hunt to begin extensive domestic container traffic. Of course, SF (and BN) already had UPS traffic, but the Hunt traffic required a deeper level of operational integration to occur if the high-priority UPS traffic was to be retained while giving truck-like service to Hunt and not incidentally handling the rapidly growing international traffic. BNSF's multi-tiered service and pricing levels have been woven into an operating plan that is tightly managed.

I believe a recent much-publicized marketing/operating competition between BNSF and UP merits more recognition than it has received as a significant measure of management attention to both strategy and tactics at the two roads. UP's intermodal aspirations have been well-recognized, and it's acquisiton of SP, I believe, was seen by UP as giving a major impetous to becoming competitive with BNSF in all segments of the intermodal business between the Midwest/South and Southern California. The "SunBelt" route was the heart of this strategy. ("Trains" ran a very good article on this two or three years ago.) An outside observer might reasonably speculate that UP felt it was approaching parity with BNSF on intermodal as the "transcon shoot-out" for the new UPS New York-LA higest-priority twice-weekly train began.

Published reports suggested that UPS awarded the traffic to UP based on price, apparently having been assured of service of the highest quality. An outside observer might reasonably speculate that BNSF had carefully analyzed the overall network effect (disequilibrium) the introduction of these unique trains would have, and calculated a price that reflected such additional costs. That same observer would perhaps conclude that UP hadn't the capability to fully explore the network ramifications. Rather, UP was depending upon traditional railroad operating intuition to work its way through any problems that might arise.

(BNSF's decision to forego this particular piece of UPS business was an impressive example of sound, even courageous, decision-making on another count. The UPS-BNSF relationship is of the highest order ... long-standing, high-volume and revenue, and very high visibility for the finest service level the railroad industry. "High noon" and BNSF ducks! Imagine the angst! The effect on morale in Ft. Worth! The "image" problem! The intermodal compteitive balance in the West had shifted dramatically ... it appeared. It's tough to say, "No" to your best customer, even when you know it is in that customer's own best interest.)

It is my belief that the UPS trains were the spark that ignited an explosive mixture on the UP's "Sun Belt" route: A capacity-constrained single track route which had been under-invested in for decades; growing volumes of international intermodal traffic; increasing domestic carload voumes fed by a growing economy; a lack of operational planning and execution ability; and a competitive philosophy that sees "victory" defined by market share, prices be damned. The advent of the new UPS trains and the "melt down" were not coincidence, in my opinion. They were cause and effect.

Once the explosion had occurred, the removal of the spark source (UPS put the traffic on the highway) was of limited immediate benefit. Disequilibrium in a sressed, intuitively managed network takes months to overcome.

[Anonymous]

with all this talk of the UP's impending 'meltdown', how is BNSF doing? i never hear talk about it, just the UP. i still don't quite understand how it is, but it seems to me the UP has a couple more trans-con routes than BNSF does. maybe some are over utilized and some under....who knows. someone shed some light...i'm still a beginner...