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Can Railroads Take Market Share from Air Freight?

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Can Railroads Take Market Share from Air Freight?
Posted by MarknLisa on Thursday, October 19, 2017 9:01 AM
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Posted by CSSHEGEWISCH on Thursday, October 19, 2017 10:12 AM

It may have happened when Santa Fe first began running the "Super C", primarily over weekends when most businesses using air freight were closed and didn't take delivery of shipments.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by selector on Thursday, October 19, 2017 11:11 AM

I would think the freight sent by air would be either time sensitive or really time sensitive.  The former might be parts for a repair/replacement (even up to ball and rod mill shells or trunions, dynamos, engine blocks, etc.).  The latter would be all those gotta have yesterday hobby items (toy trains, guitars, telescopes, RC anything, toasters, expresso makers, and other stuff our discretionary income in the modern world makes possible.

Everything else, with some crossover, moves by truck, by ship, by train, or by some other method.

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Posted by Shadow the Cats owner on Thursday, October 19, 2017 11:29 AM

One of the items shipped air freight is live fish for the aquarium trade.  We have a saltwater fish tank at our house.  I can place an order online at several retailers and then the next business day if I order before 930 am the fish I wanted are at my door.  Medical supplies especially radioactive testing ones are also air freight items.  Heck you would have to ask UPS and Fed Ex what their largest items shipped in terms of numbers shipped are.

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Posted by mudchicken on Thursday, October 19, 2017 11:58 AM

Lots of your FedEx and UPS next day air shipments wind up on trains, especially Saturday trains for Monday deliveries or bad weather... The logistics people know how to work the system to their advantage.

Mudchicken Nothing is worth taking the risk of losing a life over. Come home tonight in the same condition that you left home this morning in. Safety begins with ME.... cinscocom-west
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Posted by Norm48327 on Thursday, October 19, 2017 12:44 PM

mudchicken

Lots of your FedEx and UPS next day air shipments wind up on trains, especially Saturday trains for Monday deliveries or bad weather... The logistics people know how to work the system to their advantage.

MC,

If I may take exception, some UPS/FEDEX second day air shippments, if close enough to both the sender and receiver may travel by rail but both couriers specialize in getting package to their destination in the time promised. More likely, given the short haul, they will travel by truck.

Our shop used to order Aircraft parts from Muncie Aviation In ..you guessed it.. and even though specified as ground shippments arrived the next morning. Even "Second Day Air' was not always consistent. We were only willing to pay the overnight price for the most critical things.

Norm


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Posted by tree68 on Thursday, October 19, 2017 12:57 PM

Norm48327
getting package to their destination in the time promised.

I got a package the other day - the tracking website said "out for delivery" first thing in the morning.  I know the truck was in town before noon, but they promised to deliver it "by COB," and that's when it finally showed up on my doorstep.

I've also had packages that sat for a day or three at one distribution center or another - again, promised delivery was by some date, and they left the distribution center in time to make that deadline.  I guess we can't be delivering things early.

I can recall when the package service's stock in trade was rapid delivery - now that's not the case, unless you pay a premium price for shipping.

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Posted by jeffhergert on Thursday, October 19, 2017 1:48 PM

tree68

 I've also had packages that sat for a day or three at one distribution center or another - again, promised delivery was by some date, and they left the distribution center in time to make that deadline.  I guess we can't be delivering things early.

 

 

Precision Scheduled Package Delivery.  Or maybe the Paul Masson school of thought on delivery.  "We will deliver no package before it's time."

Jeff  

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Posted by rrnut282 on Thursday, October 19, 2017 2:01 PM

When I worked at BAX, they had two sorts (air hub operations).  One at night for the overnight business and one in the afternoon for the 2nd day air shipments.  Many was the time a container of 2nd day air was put on an overnight plane to fill it out or help with weight/balance of the aircraft.  Loads are less likely to shift in-flight with all positions filled with containers.  That is why you will see some inconsistance in delivery times.  

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Posted by Norm48327 on Thursday, October 19, 2017 2:07 PM

jeffhergert
Precision Scheduled Package Delivery. Or maybe the Paul Masson school of thought on delivery. "We will deliver no package before it's time." Jeff

Love it. Truth beats fiction hands down. Wink

Norm


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Posted by Overmod on Thursday, October 19, 2017 2:09 PM

The real problem lies in the inability of most railroad operations to provide the kind of precise rapid service to delivery that is the reason for air freight's higher profitability.  One problem is the perception of reliability in fast delivery -- that it will be as quick as expected for the price, and that dropoff will be made when expected for the price, and that damage or loss or other potential error will be minimized.  None of these are particularly characteristic of a railroad service that can be done without massive additional staffing or else some 'joint venture' partner or courier service (who might just as well conduct or contract for the 'backbone' shipping and skim the profits available).  The closest thing to a transfer hub I've seen recently is the North Baltimore facility -- which evidently was misdesigned and has now been deprecated for any further CSX 'fast precision' purpose.

And then there is the question of assuring sufficient business to keep a train full (but not a lane too full) whenever service is scheduled -- that likely won't be triweekly -- with all the necessary connections all the way from origin to destination.  When the bloom is off the novel high-speed rose, or the 'competition' rises to the challenge, the profitability will likely only get less.  (And I speak as someone who explicitly developed the hardware and operating model appropriate for 'overnight' container delivery in the NEC between Ivy City (and logical points south) and Boston with many intermediate stops as needed.)  It is somewhat depressing to see the counterpart of service acceleration show up with higher permissible track speeds -- it seldom really matters if mainline speeds are increased even to 110mph or higher if the small portions of overall trip time that are practically saved -- expensively -- by running to the higher maxima only represent a couple of minutes' overall saving, even if those several minutes can be reasonably guaranteed under all traffic and in all weathers.

A much more likely service is the current CP Expressway, which has interesting equipment, common-sense access and methods for loading and unloading, and built-in "delay" to accommodate reasonable specialty loading and unloading by experts (in suitable tractors) before road dray hookup is expected.  I think this provides reasonable high-speed service and minimization of potential slack, and shows that someone who understands profitable models for the target classes of traffic is in charge of the service and its marketing.  But how effectively this could be monetized relative to actual air freight or something like trucking-company 'Jetservice' in lanes much longer, or involving more uncertainty or car-handling, than Expressway currently does is not really clear to me.

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Posted by Norm48327 on Thursday, October 19, 2017 2:18 PM

rrnut,

If tou really want an education about how seriously both UPS and FEDEX take this game take a look at arrivals and departures from FEDEX's hub in Memphis. It is a well chororeopahed operation in which aircraft spend minimal time on the ground between unloading, reloading and getting launced to their next destination. It is not easy for those pilots,aka 'freight dogs'. They have schedules to keep aleep and rest be damned.

I wouldn't do that job even if they offered me tons of money.

Norm


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Posted by rrnut282 on Thursday, October 19, 2017 2:43 PM

Norm,

No education necessary, I've been typing airwaybills into the computer since the 1970s.  Hell or high water, the airfreight must go through.  Fog or FOD were the only acceptable excuses, and now with CAT III available in more places, fog isn't an excuse anymore.  

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Posted by rdamon on Thursday, October 19, 2017 3:29 PM

Always thought this was cool ..

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Posted by rrnut282 on Thursday, October 19, 2017 3:34 PM

By the time I worked there, the railroad had sold it off, but they kept the name (or most of it anyway.)  Imagine about 20 of those side-byside.  

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Posted by samfp1943 on Thursday, October 19, 2017 5:31 PM

mudchicken

Lots of your FedEx and UPS next day air shipments wind up on trains, especially Saturday trains for Monday deliveries or bad weather... The logistics people know how to work the system to their advantage.

 

    My guess would be the 'public'  would be stunned! 

   Have been out of the business for some time now, good grief, years now! 

   But I was hauling Fed Ex freight when their slogan was  " Absolutely,Positively, by 10AM !"  They busted their humps to make it happen, and so did we, in the 'trucking support' end of their business.  Team operated trucks would move "Prime" loads overnight between their HUB sites. And IF there was a screw up...Fed Ex maintained "Hot-Ready" planes at those hubs, to go and recover a load in danger of missing its 'appointment.' It was sometimes very intense.

  Back then, there were airfreight carriers that would have more trucks on "The Ramps" than airplanes.  The 'ad hoc' airfreight business was very highly competitive,[pricewise) particularly, where the 'ad hoc' loads were concerned. 

[For example] Never forget that BMW in G'vile/Spartanburg had a ramp built that was several miles long, from the airport to their plant...Lufthansa regularly flew racked loads of bodies in there, except when there was a screw-up, and they had to be trucked out of JFK @NYC.  In those days and times,the 'carriers that would stand on their heads' to deliver those kinds of loads; nowdays,not so much. Time frames for deiveries have been lengthened (aided by re-working cost$$$ for shippers by increasing the various delivery window timing.) 

It is not hard to believe that Intermodal containers could, and would ,be used to deliver 'air freight' on very tight schedules over long distances. Those FedEX logoed cans are hauling everything from regular freight to not so regular freight,IMHO. Same for the UPS canes as well.  

    Never forget that the "Business Model" pioneered by Fred Smith can be used by any company that can put it together....Which is why, when you see a Fed Ex 'hub" there is likely, a UPS 'hub' not far away. My 2 Cents

 I would predict that we might see a return of the long distance "Super C" type of train; at some point, the shippers might demand it???

 

 

 


 

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Posted by rrnut282 on Thursday, October 19, 2017 6:24 PM

Until railroads can deliver a carload on the day specified, consistently (not estimated arrival sometime this week), air cargo carriers can rest easy.  

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Posted by mudchicken on Thursday, October 19, 2017 6:43 PM

Norm: This LA roadmaster knows this to be fact. Usually the last two cars on the hottest weekend TOFC trains out of LA/Hobart and I understand they are still doing it.

Mudchicken Nothing is worth taking the risk of losing a life over. Come home tonight in the same condition that you left home this morning in. Safety begins with ME.... cinscocom-west
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Posted by greyhounds on Thursday, October 19, 2017 7:05 PM

In a word, no.  Air freight is a market segment almost totally unsuited to rail movement.  There are many larger segments of the freight market where the rails have a good path to profitable growth.  i.e., long haul temperature controlled motor freight shipments.

However, there are some interesting stories.   Once a shipper who didn't know what they were doing basically panicked because they had to move around 8,000 pounds of product from Chicago to New Orleans over a weekend.  On Friday they contacted a 3rd party logistics firm and explained their predicament.  They wanted air freight.  

The 3PL knew what it was doing and said:  "We'll do it for you."  The 3PL got a TOFC trailer, loaded the 8,000 pounds, and sent the freight by rail intermodal to New Orleans.  The "load" arrived at midnight on Saturday and was delivered as promised on Monday.  The 3PL charged its customer for an air freight move while paying out the intermodal rate.  

Such deception wasn't common, but air freight via rail was possible.  Back in the tariff days air freight tariffs had a provision for substituting motor movement if the plane couldn't fly due to weather or other reasons.  Motor freight tariffs had a similar provision allowing TOFC movement due to weather conditions or other reasons.  So freight originally routed by air could, and did, get changed to truck movement which subsequantly got changed to TOFC movement.  The shipper was still billed for the air transport.

 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by BLS53 on Tuesday, October 24, 2017 7:01 PM

Norm48327

rrnut,

If tou really want an education about how seriously both UPS and FEDEX take this game take a look at arrivals and departures from FEDEX's hub in Memphis. It is a well chororeopahed operation in which aircraft spend minimal time on the ground between unloading, reloading and getting launced to their next destination. It is not easy for those pilots,aka 'freight dogs'. They have schedules to keep aleep and rest be damned.

I wouldn't do that job even if they offered me tons of money.

 

I'm sure you know you're an outlier in this respect. FedEx and UPS are among the most coveted positions among professional pilots. 

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Posted by BLS53 on Tuesday, October 24, 2017 7:11 PM

Seems like a week doesn't go by, that someone here doesn't come up with some farfetched idea of a market railroads are leaving unserved. 21st century railroading in the US is what it is, and the people who run them seem content with that.

What's the motive behind this? Are the posters stockholders, or just want more trains to watch? Nostalgia buffs perhaps, seperated from reality?

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Posted by tree68 on Tuesday, October 24, 2017 7:49 PM

BLS53
Seems like a week doesn't go by, that someone here doesn't come up with some farfetched idea of a market railroads are leaving unserved.

One would hope that the railroads' marketing departments are doing the same thing.  And, as we do here, after looking at the pros and cons, they're probably tossing many of the ideas out.

Of course, a railroad marketing department will have a better idea of the parameters against which such an idea must be measured that those of us here.  Seems as though we've heard in the past of situations where someone who suggested certain new business would probably be looking for new employment in short order.

That does assume that the railroads still have marketing departments...

LarryWhistling
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Posted by carnej1 on Wednesday, October 25, 2017 12:30 PM

There is a European based company which is trying to develop a similiar service to the Russian proposal. They want use the expanding high speed rail network on the continent and operate through the Chunnel to the U.K transporting air freight containers and palletized loads.

 They have gone as far as chartering a French SNC TGV la Poste for tests but seem to be having problems securing funding.

https://en.wikipedia.org/wiki/SNCF_TGV_La_Poste

http://www.eurocarex.com/

 

"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock

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Posted by Overmod on Wednesday, October 25, 2017 1:05 PM

I’m surprised that Mac or greyhounds hasn’t brought up the UPS accelerated testing (with borrowed Genesis locomotives, if I recall correctly).  The outcome was that even with the advantages of intermodal equipment and handling there wasn’t enough ‘monetizable’ gain from a Super-C like operation, or by extension for UPS to charge ‘air-freight’ or express rates directly for such a service.  I’d appreciate full or ‘inside’ details on the analysis and assumptions they used, and any ‘nonproprietary’ conclusions actually reached.

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Posted by Backshop on Wednesday, October 25, 2017 2:15 PM

The cargo pilots actually have it much easier than passenger airline pilots.  They normally fly fewer hours and have fewer takeoffs and landings.  They also don't have to deal with "self-loading cargo".

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Posted by BOB WITHORN on Thursday, October 26, 2017 6:52 AM

Know a couple of them.  One at each, UPS & Fedex. One of them flys Louisville to Anchorage to Hong Kong and back as his set route, loves his job.  The cargo is kind of self unloading, it rolls, when pushed to the door for unloading or atleast they used to.

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Posted by Shadow the Cats owner on Thursday, October 26, 2017 11:22 AM

Yeah cargo jocks have it pretty easy they normally do not have to fear hearing from a stewardess Captain please divert the plane we have a drunk passenger or one that tried to open the door at 35K feet.   As for loading and unloading according to my BIL retired USAF the C5 was the best the thing would lean down for unloading cargo either at the nose or tail and the stuff slid right off.

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