IC(G) piggyback trains

[MP173]

Recently purchased an ICG freight schedule book from 1977 and at that time ICG was running their St. Louis - Chicago "mini piggyback" service (as it was referred to in the schedule.  There were 3 trains in each direction daily (except weekends) between the two cities.

Southbound trains:
Lv Chicago    8pm       11pm    12noon

Ar EStL         4am          7am     8pm

Northbound trains;

Lv EStL         6pm          1am      9am

Arr Chicago   2am           9am      5pm

With discussions today of railroads needing to increase volumes and market share, in light of the diminishing coal and CBR revenues, no doubt the rails are exploring all options, including point to point short haul intermodal.

How did this operation come into existance?  How long did it operate?  Who/what were the target markets? What were the challenges?

Greyhound...I am specifically looking to you for answers on this as you were in the room where this occurred.  Obviously this service was eliminated.  Was it due to high costs or low volumes (probably both)?  Was this regulated (were rates published in tariff form or contractually agreed to?)

ICG obviously had a route between the two cities which was underutilized and attempted to maximize revenue.   Similar service was provided by Milwaukee Road between Chicago and Twin Cities.  Were there any discussions between the two railroads for providing thru service?

Ed

[samfp1943]

ED (MP173):

    You are so right, Greyhounds, would be a real source for this information. As a side note;  I worked for a medium-sized trucking company during the same period of time late 1970's, early 1980's. At this point our company joined the piggy-back movement, at about the time ICG had built, and populated a large 'lift' adjacent to the Johnson Yard at Memphis.  Primarily, it was a flat lot with the 'lifts' being accomplished by a fleet of large fork lift-type eauipment. 

 Our sales and marketing guys were really interested in the Chicago area destination, and the NOLA market as a secondary destination.  Of course, our trailers were not specifically outfitted with factory- installed lifting points, it was thought that the Lufkin trailers were inherently stout enough, and the lifting points under the frame rails were reinforced with 6 quarter rough-sawn oak planks.  The system worked well, for a while.    Then problems cropped up with positioning of loads within the trailers, which resulted in trailers being broken into pieces, when lifted, and of course freight claims. 

  The real clincher was on the Chicago end, when the local drayage fees, killed the deal.    The Sales & Marketing 'brain trust' called it a learning experience, then slunk away from the whole deal.   Some of us thought it was going to get a new chance, when at the behest of a major client, we shipped almost 75 trailers on BNSF TOFC  to California; to populate a new operation out there, and to also move the customer's  products out to the West Coast. 

[greyhounds]

MP173

Recently purchased an ICG freight schedule book from 1977 and at that time ICG was running their St. Louis - Chicago "mini piggyback" service (as it was referred to in the schedule.  There were 3 trains in each direction daily (except weekends) between the two cities.

Southbound trains:
Lv Chicago    8pm       11pm    12noon

Ar EStL         4am          7am     8pm

Northbound trains;

Lv EStL         6pm          1am      9am

Arr Chicago   2am           9am      5pm

With discussions today of railroads needing to increase volumes and market share, in light of the diminishing coal and CBR revenues, no doubt the rails are exploring all options, including point to point short haul intermodal.

How did this operation come into existance?  How long did it operate?  Who/what were the target markets? What were the challenges?

Greyhound...I am specifically looking to you for answers on this as you were in the room where this occurred.  Obviously this service was eliminated.  Was it due to high costs or low volumes (probably both)?  Was this regulated (were rates published in tariff form or contractually agreed to?)

ICG obviously had a route between the two cities which was underutilized and attempted to maximize revenue.   Similar service was provided by Milwaukee Road between Chicago and Twin Cities.  Were there any discussions between the two railroads for providing thru service?

Ed

 

I’ve always believed the Slingshot two person crews were made possible because of a union situation unique to the old Chicago and Alton.  All train crew members, including engineers, on the Alton were represented by the UTU.  This allowed the union to trade off brakemen/flagman jobs for more engineer and conductor jobs.   On other lines the crews belonged to several different unions.  The engineers had their own union, the conductors had their own union, and the brakemen/flagmen had their own union. 

 

Other proposals to reduce crews had met a brick wall because the job gains went to different unions than the job losses.  For example, the IC had made a proposal to improve service on its Iowa Division by increasing the number of trains operated while reducing the train crews from four to three people.  The jobs cut would have been members of the brakemen/flagmen’s union while the job gains would have gone to the conductor’s and engineer’s unions.   The brakemen/flagmen’s union balked.  Its members would have been promoted and received more pay, but the union would have lost members.  The union acted in its own best interest (which was different from its members' best interest) and refused the proposal.

 

                A major drawback to the Slingshot operation was that train consists were fixed by union agreement at a maximum of 15 cars.  (30 trailers/containers).  This limited growth.  If there were more than 30 trailers for a train, some of them had to be left behind.  This destroyed service reliability.  A customer could not count of his freight being moved on schedule.  It was a crap shoot.  For the few dollars saved by using intermodal it wasn’t worth it.   (After deregulation, we “Kind Of” solved this problem by establishing a two tier pricing system.  If a shipper was willing to accept the possibility of delay we charged a lower rate.)

 

                The idea of multiple short fast trains serving the market came from the concept that freight became available throughout the day and the railroad should move it as soon as it became available.  Nice in theory, didn’t work that well in practice.  What we found is that customers wanted overnight service.  They wanted to ship on Monday and have delivery early Tuesday morning, etc.   There were exceptions, such as UPS, but mainly the market was for overnight service.  But we were stuck with these limited capacity trains that couldn’t all be scheduled to provide the market demanded overnight service.  A better agreement would have been to guarantee the union three trains each way per day with a overall limit of 45 cars each way per day.  This would have allowed us to shift capacity to meet market demands.  But then hindsight is 20/20.  Geoorge Stern was heading intermodal at the ICG when the agreement was made.  He had his doubts about the potential profitability of the service but he judged the opportunity of a union being willing to negotiate on on crew size too good to pass up.    

 

                Was the distance too short for intermodal to compete with over the road trucking?  Yes and no.  At the 285 miles drayage ate up most of the available revenue.  We were hauling trailers from the Venice, IL terminal serving St. Louis to IMX Chicago for $85.00.  (Southbound rates were higher because the demand was greater.)   One thing that was needed were door to door rates that included the dray charges.  This would have allowed us to “adjust” the rail revenue per load and maximize the revenue per train.  Terminal to terminal intermodal rates are always wrong.  At the same time they both under price loads with low dray cost and over price other loads with higher dray cost.   (The overpricing diverts the traffic to truck.)  You need to be able to “adjust” the rail portion of the revenue so as to maximize it on the loads with low dray cost and also maximize the revenue per train by accepting loads that have higher dray cost as long as they cover their marginal rail cost.  

 

                Railroads can compete in shorter haul intermodal markets.  But they can’t do it with the Slingshot concept.  (The Slingshots were a good faith try by both the company and the union.)

 

                Chicago – St. Louis intermodal can be a market that contributes to a railroad’s bottom line.   But it requires much more sophisticated “costing” and understanding of a railroad’s cost structure than was "official"  at the ICG.  I’ll use the UP as an example.

 

                The UP operates Chicago – Houston intermodal service.  Some day they’re going to switch this to the old Alton and operate it through E. St. Louis.  The UP’s max train length is set at 18,000 feet.  (Yee God!)  So anything less than 18,000 feet fails to maximize the revenue per unit of production (i.e., a train mile.)  If they’ve got 10,000 feet of train for Houston, failing to add the revenue for a possible 8,000 feet extra carrying an E. St. Louis set out is a failure to maximize the spread between cost and revenue.  This is short haul as incremental business, not as a stand alone operation.  But it will throw money to the bottom line, and that’s the whole point.

[greyhounds]

samfp1943

The system worked well, for a while.    Then problems cropped up with positioning of loads within the trailers, which resulted in trailers being broken into pieces, when lifted, and of course freight claims.    The real clincher was on the Chicago end, when the local drayage fees, killed the deal.    The Sales & Marketing 'brain trust' called it a learning experience, then slunk away from the whole deal. 

They should have called me.  I would have arranged for a supply of rail spec trailers and cut a price deal to compensate for the dray cost.

[MP173]

Thanks for jumping in guys.  I knew Greyhound would add a great perspective to this.  The Alton line was really under utilized and this would have been a great opportunity.  I only saw a couple of scheduled freights (other than the Slingshots) plus the Amtraks.  

Do you know for sure that UP will change that Chicago - Houston to the Alton, or is it a possibility due to the Logistics Park on the line?  It would make sense to move it as operations change and more and more business is located near the Logistics Park.

Each year CSX runs the Christmas train from Columbus to Chicago on a tight overnight operation, primarily with UPS loads.  This train begins around Thanksgiving and runs thru to Christmas.  So, yes a short haul intermodal can work, but the cards must be played correctly.

NS is currently running a 26W daily from Chicago to Pittsburgh.  It is heavy with UPS and has international containers.  Today's train had 44 trailer/containers of which 32 were UPS marked.  It would be interesting to see how that adds to the bottom line. Train 24W followed shortly for Baltimore with only 33 containers, 10 of which were UPS.  

Ed

[greyhounds]

MP173

Do you know for sure that UP will change that Chicago - Houston to the Alton

No, I've just read that after the State of Corruption Illinois gets through wasting spending a couple billion dollars that we do not have on the UP line the UP plans to make the most of it.

There is NO provision in the agreement with the UP to maintain the proposed slightly improved Amtrak times.

 

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