We have some OSB lumber products coming from a local supplier who is waiting for his carload to come in. The shipment originates at a mill in Hayward WI, 386 highway miles from my supplier, located in Sioux Falls SD. My supplier gets both carloads and truckloads of the same products from this mill, depending on the pricing, and how quickly they need the materials. Instead of 386 highway miles on a semi truck, they opted for a train car this time. The car left Hayward WI on CN, and traveled to Fon Du Loc WI, 278 miles, where it is now sitting. From there, It probably will ship 305 miles to Minneapolis MN to hand off to BNSF. BNSF will send it 103 miles to Wilmar MN where it will be switched out for a train headed to Sioux Falls SD 159 miles away. So instead of 386 highway miles, this material will ride 845 or so railroad miles on 2 different railroads and get switched twice. Somehow this equals a lower freight cost? How's that work ?
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding We have some OSB lumber products coming from a local supplier who is waiting for his carload to come in. The shipment originates at a mill in Hayward WI, 386 highway miles from my supplier, located in Sioux Falls SD. My supplier gets both carloads and truckloads of the same products from this mill, depending on the pricing, and how quickly they need the materials. Instead of 386 highway miles on a semi truck, they opted for a train car this time. The car left Hayward WI on CN, and traveled to Fon Du Loc WI, 278 miles, where it is now sitting. From there, It probably will ship 305 miles to Minneapolis MN to hand off to BNSF. BNSF will send it 103 miles to Wilmar MN where it will be switched out for a train headed to Sioux Falls SD 159 miles away. So instead of 386 highway miles, this material will ride 845 or so railroad miles on 2 different railroads and get switched twice. Somehow this equals a lower freight cost? How's that work ?
It does kind of make you scratch your head and go 'huh'.
How many round trips (ie empty unpaid miles) will the truck driver have to make to deliver the same amount? It doesn't take many for rail's lower cost per ton/mile to overtake trucking's short trip advantage.
Murphy Siding So instead of 386 highway miles, this material will ride 845 or so railroad miles on 2 different railroads and get switched twice. Somehow this equals a lower freight cost? How's that work?
Ask them what they were charged. If it cost less to ship by rail, and (regardless of the routing didoes) it gets there when they needed it, that may be enough answer for you.
This is a highly valuable example for the aficionados of 'streaming' as mentioned in the 'not enough boxcars' thread. I'd be interested to see just what operational improvements would facilitate more direct delivery of this car while reducing cost. (That might take considerable additional modeling of traffic flows, about which I have no data, and also what an 'acceptable' amount of both switching overhead and 'excess' moves between yard facilities is tolerable for best working efficiency.
Maybe wait until the bill comes in before deciding its a lower freight cost.. you might be in for a surprise (or maybe not). Just because it was quoted a certain way doesn't mean it will be billed that way.
Looks like the routing you cited is about the only option. CNW (the former tracks on which the OSB plant appears to be located, just a few miles off the former SOO tracks) apparently used to run into Minneapolis/St Paul, which would have shortened the trip considerably.
I quit running it down at that point.
The former CNW now ends just past the plant on the east side of what was likely the interchange, and ends a mile or two west of said junction, with cars apparently stored there.
Dwell time in yards is a major factor in the velocity of the railroad. One would think that a railroad would be interested in getting a car out of their yard ASAP. It's not likely they only run trains on a weekly basis between any two points.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68 Looks like the routing you cited is about the only option. CNW (the former tracks on which the OSB plant appears to be located, just a few miles off the former SOO tracks) apparently used to run into Minneapolis/St Paul, which would have shortened the trip considerably. I quit running it down at that point. The former CNW now ends just past the plant on the east side of what was likely the interchange, and ends a mile or two west of said junction, with cars apparently stored there. Dwell time in yards is a major factor in the velocity of the railroad. One would think that a railroad would be interested in getting a car out of their yard ASAP. It's not likely they only run trains on a weekly basis between any two points.
Velocity is calculated on trains moving between terminals and gets stated in MPH. Terminal Dwell is calculated in hours between arrival and departure.
While their may be some metric devoted to the accumulation of car velocity from origin to destination, including train and terminal operations, I am not aware of it on my carrier. It would be a interesting metric to research - especially considering some of the blocking moves I am seeing my carrier make.
Never too old to have a happy childhood!
BaltACDOn my carrier, Velocity and Terminal Dwell, are two different metrics.
Seems like we had a discussion here a while back that left me with the impression that the average car speed, which includes both terminal dwell and speed over the railroad, was of concern to at least some carriers. Maybe it's a matter of the proper terms.
Some of those average car speeds were in the single digits, which seems odd when you're watching a train whiz by at 50 MPH. The answer is the time the car sits in a yard between the legs of its journey.
There are, of course, a couple of considerations (and probably more). In the case of the single car move being discussed here, the higher the average speed of the car from source to destination, the happier the receiver will likely be. You can't sell product (retail, anyhow) sitting in a car 150 miles away.
On the other hand is regular shipments of a product, where receiving the desired quantity on a regular basis is more important than how long it takes to get there.
If you need, say, weekly shipments of widgets, it doesn't matter how long it takes from source to destination, as long as they get there every Tuesday. If it takes three weeks, then you need to have several shipments in transit at all times, which isn't really a problem aside from possible car hire considerations or perishables.
rrnut282,
Likely none. They will pick up a load heading back in the direction of the point of origin if it's available. Not likely a company truck.
Wizlish Ask them what they were charged. If it cost less to ship by rail, and (regardless of the routing didoes) it gets there when they needed it, that may be enough answer for you.
Murphy Siding I'm not sure what you're trying to say there.
What I'm saying, basically, is that if the OVERALL cost to the shipper was cheaper for rail than for truck, and we presume the railroad either made a profit or didn't care/didn't know whether it did on that particular shipment, then rail cost is less, even with (or indeed, perhaps in part because of) the 'circuitous' routing.
For one thing, I suspect this shows the relatively small marginal cost associated with a particular shipment contributing to the costs of rail transport. I'm not enough of an expert to tot this up, but the nominal fuel expenditure to move the loaded car the 845 or whatever miles is likely to be relatively small. Was the train humped or flat-switched in the yards it traversed? for the hump you have relatively small marginal cost (the time and fuel to push it over the hump, pull the pin, run the computers to line the switches and fire the retarders) and for flat switching you have the fuel, salary, and depreciation for a couple of minutes worth of switching time. Add the incremental cost of 'making' one extra air-hose connection on each new train. I suspect it really doesn't add up to much.
Now, if any of those things had to be provided 'special', rather than being present as a matter of general operation or procedure, the marginal cost might be higher -- much higher, perhaps -- and the profit from the move might evaporate fairly quickly. So instead we move trains quickly between yards, and put the car to be spotted on whatever local delivery is next to be conveniently made.
Now, perhaps we're not looking at economy; perhaps we're just seeing laziness or inability to use computer assets (or whatever) skilfully. From previous posts, I get the sense that wasn't happening; that it was in fact a logical way to reach destination from origin with least expense. But it doesn't matter to the shipper -- cheap is cheap. And it might not matter to the railroad, if it's sufficiently 'anomalous' not to be a drag on either operations or eventual net profit from operations.
Murphy Siding [snipped - PDN] . . . So instead of 386 highway miles, this material will ride 845 or so railroad miles on 2 different railroads and get switched twice. Somehow this equals a lower freight cost? How's that work ?
Not hard to see how that is the the case:
The rail rate is less than 386 / 845 = 45.7 % of the truck rate - i.e., the rail rate per mile (or per ton-mile) is enough lower to compensate (or more) for those additional miles.
(But not seen above: How long (transit time) for the rail vs. truck move ?)
1:4 fuel efficiency advantage of rail - even more when highway motor fuel taxes are included.
Many more cars moved by a 2-man rail crew (vs. only 1 driver needed for the truck).
1 railcar can carry 4 to 5 times as much (weight) than a truck.
Only tree68 / larry mentioned the car hire. As John Kneiling loved to point out, that can be a major 'unseen' component of the actual costs of the move. See the concurrent thread on "Not Enough Boxcars?" for how expensive car rental/ ownership can be (roughly $25 to $40 per day, IIRC).
No one mentioned the "ownership" (lost opportunity) cost for the material in transit - at minimum, the actual cost of the interest needed to pay for the borrowed money that is in the cost of the material while it is transit, until it is paid for. (Regardless of the terms of the conntract for the sale-purchase of the material; either the seller or the buyer bears that cost, again often implicitly and unrecognized by either one, and also 'off the radar screen' of the competing carriers, especially the rail mode - again, see Kneiling's many diatribes on this.)
- Paul North.
(*P.S. I'm so sick and tired of my posts here being inadvertently deleted when I hit the wrong key . . . ).
Paul_D_North_JrNo one mentioned the "ownership" (lost opportunity) cost for the material in transit - at minimum, the actual cost of the interest needed to pay for the borrowed money that is in the cost of the material while it is transit, until it is paid for. (Regardless of the terms of the conntract for the sale-purchase of the material; either the seller or the buyer bears that cost, again often implicitly and unrecognized by either one, and also 'off the radar screen' of the competing carriers, especially the rail mode - again, see Kneiling's many diatribes on this.)
But in many of these transactions, 'opportunity cost of capital' is a red herring. Aren't most of these orders shipped 'on terms' -- net 15, net 30, and so on? If so, in transit the "opportunity cost" of the goods does not matter, because they'd be accruing their share of costs whether sitting in the warehouse or riding the rails, until paid for. Likewise, the "opportunity cost" of the goods upon arrival may be slightly positive to the receiver upon faster shipping, but that's a windfall and has nothing to do with the cost they pay (which will, again, only be made days later than even slow delivery).
The discussion about advantages to customer service, JIT/kanban production and implications for 'lean', etc. is not an opportunity cost discussion, it's a logistics discussion. And it was my understanding that reliability, not end-to-end speed, was perceived as far more valuable.
Now, the situation would be different if these were consumer transactions, where 'your credit card was billed before shipment' and then things took their time getting to you. I doubt, though, that many transactions involving direct-to-your-siding rail moves are of that nature!
(P.S. I'm so sick and tired of my posts here being inadvertently deleted when I hit the wrong key . . . Sigh ).
Yea, brother!
And the sad part is that the older version of the forum software had the safeguard against inadvertently 'navigating away from the page' and then having all your typed-in comments automagically deleted for ya. It shouldn't be hard to put that back -- if there is text typed in the window, ask for confirmation before navigating away from the page that contains that window. Common courtesy, common sense, at least to the non-outsourced community...
ndbprrI have never understood how a head of lettuce from California can be grown, picked, packed, loaded in a car, travel cross country to a wholesaler, trucked to a supermarket and sell for $1.00. Some day I want to do a marketing study of that.
Amazing, isn't it. There are a lot of gripes and complaints - especially on this forum - but the North American logistics network is the best in the world. Nobody does it better. It's not perfect, but it's very good.
This network allows food, such as lettuce, to be grown and harvested in Calfornia, Arizona and Mexico then moved efficiently to population centers such as New York City for consumption at very affordable prices.
Salinas, CA is right at 3,000 miles from New York City. I've got the current average truckload rate at $7,053 per truck. At 42,500 pounds payload per truck and an average head of Iceberg Lettuce weighing 1.05 pounds, this works out to $0.17/head to haul the lettuce 3,000 miles.
The railroads need to increase their concentration on food shipments. There is no good economic reason to move this high volume freight 3,000 miles by truck. Such movements are largely a legacy of misguided government economic regulations that have yet to be overcome.
Groceries are a low margin business for the stores. They rely on large volumes to make their income.
Randy Vos
"Ever have one of those days where you couldn't hit the ground with your hat??" - Waylon Jennings
"May the Lord take a liking to you and blow you up, real good" - SCTV
Since the railroads have not been major players in the perishable trade for quite a while now, I would assume that some sizable capital expenses would be incurred in rebuilding facilities and obtaining the specialized rolling stock required to go after this business directly.
rvos1979After a few years of driving, though, you start to wonder if anyone is paying attention to the logistics network. Especially when you haul product to one facility, then haul the exact same product back to where you started from........
Semper Vaporo
Pkgs.
Since Staggers and the opportunities it presented, the railroads are seeking business that can add profits to the bottom line - not every possible load that is in play. Not all loads that are in play bring profits down to the bottom line - When the carriers began applying serious costing anylsis to their existing traffic post Staggers they found the a lot of traffic was costing the carriers to handle it, not contributing to profits - thus the traffic was priced to a point where it would generate a profit or run the traffic off.
Looking back at some recent carloads and truckloads we've received, it looks like typical carload is about #185,000. Typical truckload is about #50,000.
Murphy SidingSo instead of 386 highway miles, this material will ride 845 or so railroad miles on 2 different railroads and get switched twice. Somehow this equals a lower freight cost? How's that work ?
The way the RR keeps costs at a minimum is to put in place the most efficient overall network operations. That means some lanes win and some lose, but the winners more than make up for the losers.
When the shipment utilizes more than one RR, the roads generally have agreements in place to provide blocking and run through service to support the highest volumes, helping keep overall efficiency high.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Fred BoyerDon't confuse weight with bulk. A full load of wood products bulks out before it weights out.
Would that be like the fellow who offered to haul some balsa at a reasonable price - if it had taken just one load....
tree68 Fred Boyer Don't confuse weight with bulk. A full load of wood products bulks out before it weights out. Would that be like the fellow who offered to haul some balsa at a reasonable price - if it had taken just one load....
Fred Boyer Don't confuse weight with bulk. A full load of wood products bulks out before it weights out.
Johnny
How many possible routes on the BNSF and the CN are there?
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