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ICC Rule for Milling in Transit

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ICC Rule for Milling in Transit
Posted by samfp1943 on Monday, April 11, 2016 9:41 AM

In order to keep the concurrent Thread tunning on this Forum from getting off its' topic of " How railcars are routed".  I make note of another interest of the former Interstate Commerce Commission [I.C.C.]; it was a ruling used by the Lumber Industry, and was simply called "Milling-in-Transit". 

Basicly, it allowed a 'raw' product from one region of the country to be stopped in route at an intermediate location, be removed from the railcar, partially processed and then replaced back on the railcar which would then proceed to a location in another region to be used as a product or to be further processed for sale to end users. The rule required that the product movement be 'balanced' between regions, in order to qualify for the cheaper 'Through Rate' as specified by the ICC in its rule and rate-making structure.

The instance I am most familiar with involved a manufacturing lumber plant in Southeastern Kansas.  Its' feedstock was Ponderosa Pine Diamension Lumber from mills mostly in the PNW.  Its customers for the partially processed  Ponderosa pine were located East and South and Southwest of its location in SE Kansas.

   The way this worked for that Kansas plant, was that it lay at the junction of a North-South RR ( The MKT), and an  AT&SF Branch line( which was an East-West line).  The directional flow was 'balanced' to satisfy the Regulations, each year the plant was in existance; for its' handling of some 400 to 500 cars of lumber processed under the Milling in Transit rule.

 The AT&SF Branch ( Chanute,Ks. to Joplin, Mo.) was taken out in the late 1960's  The manufacturing Lumber Mill went at about the same time.   Its product line? Wooden Burial Boxes, and Diamension Wood Products. 

 

 


 

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Posted by Falcon48 on Monday, April 11, 2016 1:16 PM

There were actually a lot of "transit" arrangements in the olden days.  For example "storage in transit" arrangements (which involved no processing) were very common.  

Samfp1943's of how a "processing in transit" arrangement worked is pretty much how most of the "transit" arrangements operated.  However, "transit" arrangements typically did not require that the outbound product be shipped in the same railcar as the inbound product.  That's because (i) the product could spend a long time at the transit point - sometimes weeks or months, and (ii) the outbound product might require a different type of railcar than the inbound product. 

In fact, there often was no requirement that the outbound product be matched up with any particular inbound shipment. For example,  when grain was shipped inbound to a transit point, the same grain didn't have to be shipped out to get the advantage of the transit arrangment - just an equivalent amount.

Ah, for the good old days.  

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Posted by PNWRMNM on Monday, April 11, 2016 2:18 PM

Falcon48

Ah, for the good old days.  

And the armies of clerks at both customers and carriers to keep track of it all.

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Posted by Falcon48 on Monday, April 11, 2016 2:36 PM

PNWRMNM
 
Falcon48

Ah, for the good old days.  

 

 

And the armies of clerks at both customers and carriers to keep track of it all.

 

You got that right.

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Posted by samfp1943 on Monday, April 11, 2016 7:52 PM

Falcon48

There were actually a lot of "transit" arrangements in the olden days.  For example "storage in transit" arrangements (which involved no processing) were very common.  

Samfp1943's of how a "processing in transit" arrangement worked is pretty much how most of the "transit" arrangements operated.  However, "transit" arrangements typically did not require that the outbound product be shipped in the same railcar as the inbound product.  That's because (i) the product could spend a long time at the transit point - sometimes weeks or months, and (ii) the outbound product might require a different type of railcar than the inbound product. 

In fact, there often was no requirement that the outbound product be matched up with any particular inbound shipment. For example,  when grain was shipped inbound to a transit point, the same grain didn't have to be shipped out to get the advantage of the transit arrangment - just an equivalent amount.

Ah, for the good old days.  

 

The Milling in Transit operation I described, actually received tghe feedstock of Ponderosa Pine at their plant, the lion's share arrived at  the plant via the Santa Fe from the 'West' andwas generally off loaded and 'stored' til used; at which time the 'processed' pine was reloaded into boxcars for transit to the final destinations.  The 'outbound' was 'balanced'  to the East over the Santa Fe Branch towards Joplin, Mo.(interchange with the KCS there)  It was the MKT which handled the North and Southbound loads.  The gentleman that did the 'balancing', was actually, the local Katy agent, who made it all work.  As previously stated that traffic amounted to about 400/500 rail cars per year.

The AT&SF branch, up until the end, hosted a mixed train, passengers rode in an old coach, and finally a drover's caboose; daily between Chanute and Joplin. The Katy was the main line between Parsons, and KC.[ Now UPRR]

 

 


 

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Posted by jrbernier on Monday, April 11, 2016 9:38 PM

  Most of the 'Milled in Transit' that I am aware of was grain.  Grain was shipped to the flour mills in Mpls, 'milled' into flour and bags of flour were shipped East.  There were rates for doing this(I suspect that this was a competative advantage for the Mpls flour mills over the Buffalo elevators/mills).

  I do remember  strange routing of lumber from the Pacific Northwest that were rebilled in transit when a new buyer was found and the car was then billed to the new consignee.  The MN&S was a big player in this business as the cars would float around the Twin Cities area while the shipper found a buyer out East.

Jim

Modeling BNSF  and Milwaukee Road in SW Wisconsin

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Posted by bartman-tn on Monday, April 11, 2016 10:18 PM

"Stop-in-Transit" is still popular in some areas, especially for grain as mentioned elsewhere. You see it sometimes with chicken feed where various grains are blended and reloaded. The concept of reconsignment - changing owners and destinations enroute - and diversion - just changing the destination but not the owner - are also still popular, especially for things like lumber, fresh produce, etc. We used to do this for a sawmill whereby we would ship lumber general delivery Chicago and the product was sold to one of a number of customers as the car got closer to its destination. This cut down on the lead time to the customer and kept product moving out of the mill. I work with several major ag shippers and all of these strategies are still used to lower rates and improve delivery times and customer service.

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Posted by samfp1943 on Tuesday, April 12, 2016 7:02 AM

bartman-tn

"Stop-in-Transit" is still popular in some areas, especially for grain as mentioned elsewhere. You see it sometimes with chicken feed where various grains are blended and reloaded. The concept of reconsignment - changing owners and destinations enroute - and diversion - just changing the destination but not the owner - are also still popular, especially for things like lumber, fresh produce, etc. We used to do this for a sawmill whereby we would ship lumber general delivery Chicago and the product was sold to one of a number of customers as the car got closer to its destination. This cut down on the lead time to the customer and kept product moving out of the mill. I work with several major ag shippers and all of these strategies are still used to lower rates and improve delivery times and customer service.

 

 

The strategy that bartman-tn mentions was a popular one in the lumber industry. Cars were loaded by mills on a speculative basis, and then consigned to an 'open delivery' location at a railroad destination that would possibly on see  service to swich cars by a railroad on a weekly basis.

The above tactic would give the 'owner/shipper in- transit' of the carload an extra period of time to sell, and reroute the contents of the car in question.     This tactic could amount to a sort of 'high-stakes' gamble between the owner/shipper of the car of lumber, and the potential pool of buyers; said car being either in transit, or about to go against the bumpers  at that location where the service was 'weekly',( or certainly not  daily.)       The price of the contents (lumber) could adjust daily, or hourly(?); as the point of the car being ' in demurrage' approached, and that demurrrage fee to be charged to the contents owner/shipper.                  A car that had been 'against the bumpers' at some intermediate point could become a very good bargain for a potential buyer of the lumber in that car.  [The 'winner' in a high- stakes demurrage poker game.]   It was an interesting tactic, used by sellers and buyers to gain whatever advantage they could leverage in the specific situation.

 

 

 


 

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