cx500Can a small terminal use cheaper equipment if only loading single stack containers on flat or spine cars?
A military installation near here routinely loads and unloads containers on the military trains using a wheeled loader. They're singles, and it's not like they're in a huge hurry (as in trying to get ready for a specific departure time). They also are doing the work in an area not specifically set up for the activity.
I suspect the practice could easily be set up in virtually any rail-served location. The problem would be the last-mile rail service. There are only two through trains - one north, one south - and one local working here, so a container will sit in a yard for upwards of a day before delivery. If it were truck hauled, it would arrive the same day.
We do see a lot of containers on trailers here, most are likely from the I/M facility in Syracuse, ~70 miles to our south.
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...
One thing comes to mind. Obviously the longer the dray the higher its cost, and the way to control that is to have more small terminals. That goes counter to the current mindset of bigger is better, yet those big terminals are expensive to build, equip and operate. Can a small terminal use cheaper equipment if only loading single stack containers on flat or spine cars? With lower volumes a somewhat slower transfer speed would likely be quite acceptable. Logistics could be managed remotely, so local staffing would not have to be on the same scale. The rail moves would most likely be as blocks on suitably timed regular manifest trains, but these should be relatively reliable if anybody ever achieves an actual precision scheduled railroad.
Just asking.
CMQ_9017Well, respectfully, I think you grazed it but the key word there is 'cost'. At 500 miles over half the revenue is eaten up by the terminal costs under traditional pricing models. So you have to either adjust the price upward or bring the cost downward. Or have another revenue stream to subsidize the costs for a net-net gain on the entire operation.
I don't know what "Traditional Pricing Models" you are using. But a 500 mile truck haul should produce around $1,000 or more revenue. That's what the railroad has to work with.
Get down below that by $100 with reliable service and you'll get the customers' attention. Big Time.
If you're saying that $450/load will be consumed in terminal charges (50%) then I'll say your model is bogus. What exactly are you talking about?
I did "Graze" the terminal costs. But then, I "Grazed" everything. I'm not writing a textbook here. I try to make my points short and sweet.
greyhounds CMQ_9017 Surprised (or not really I guess) that the subject of intermodal never seems to talk about high terminal fixed costs, which is where the real opportunity lies. I did talk about that. Here's what I said: "Short haul doesn't make economic sense under the current double stack business model." Agree. Shorter haul terminals will be lower volume and cannot support the large investment required for DS. A trailer or continer on chassis system will probably be more efficient. Intermodal is never, ever, going to win a "Race" with a truck at <= 500 miles. One driver can usually do that in one shift. He/she can just drive. The intermodal load will have to go through terminals and be aggregated in to a trainload lot. This will delay things. So, minimized the time differential as much as is reasonably possible and play to the railroad's strengh as much as is reasonably possible. A reliable 40 MPH terminal to terminal schedule will be competitive for the majority of the traffic if the railroad can provide good cost savings. That's where adding the shorter haul block to an existing long haul train comes in. You're effectively getting the short haul train service with zero added crew costs. It's going to take some operating discipline to make it work. But that's what those guys get paid for.
CMQ_9017 Surprised (or not really I guess) that the subject of intermodal never seems to talk about high terminal fixed costs, which is where the real opportunity lies.
Surprised (or not really I guess) that the subject of intermodal never seems to talk about high terminal fixed costs, which is where the real opportunity lies.
I did talk about that. Here's what I said:
"Short haul doesn't make economic sense under the current double stack business model." Agree. Shorter haul terminals will be lower volume and cannot support the large investment required for DS. A trailer or continer on chassis system will probably be more efficient.
Intermodal is never, ever, going to win a "Race" with a truck at <= 500 miles. One driver can usually do that in one shift. He/she can just drive. The intermodal load will have to go through terminals and be aggregated in to a trainload lot. This will delay things.
So, minimized the time differential as much as is reasonably possible and play to the railroad's strengh as much as is reasonably possible. A reliable 40 MPH terminal to terminal schedule will be competitive for the majority of the traffic if the railroad can provide good cost savings.
That's where adding the shorter haul block to an existing long haul train comes in. You're effectively getting the short haul train service with zero added crew costs. It's going to take some operating discipline to make it work. But that's what those guys get paid for.
Well, respectfully, I think you grazed it but the key word there is 'cost'. At 500 miles over half the revenue is eaten up by the terminal costs under traditional pricing models. So you have to either adjust the price upward or bring the cost downward. Or have another revenue stream to subsidize the costs for a net-net gain on the entire operation.
Surprised (or not really I guess) that the subject of intermodal never seems to talk about high terminal fixed costs, which is where the real opportunity lies. RR's are working on autonomous and other systems that will streamline operations at intermodal terminals, once that is unlocked short-haul intermodal will become quite competitive from a cost perspective. However, at currnet economic conditions given the available load to truck ratio and rising prices of fuel, short-haul intermodal is becoming attractive even at the higher rate due to a single factor -- capacity.
Plenty of opportunity in this space if you take it for what it is at the moment. It won't be the cheapest option but what's cheaper, having your load sit out on inventory for 2 weeks waiting for someone to find a truck or spending more to move it out in 3 days (thus moving moving inventory off your floor and keeping the cash moving in and costs lower).
Short haul Intermodal might have a prayer these days with the current HOS. With any delays getting loaded that burns any of my drivers clock overnight to more than 500 miles is hard unless it is a drop and hook pickup. The HOS that where implemented then throw in ELOG's and you have just opened the door for short haul IM. If the railroads can capitalize on it. However drayage for them will still be the problem. JB Hunt still has to follow the HOS Regs they just have enough manpower to throw at it to overcome the problems. The same with the other mega fleets. They just throw another driver on a problem load.
Have been hoping to see another thread on the short-haul intermodal discussion. I'm all in with Greyhounds although I'm not so sure that you could do effectively as part of a block in a long-haul train. In theory, I suppose you could but remember, for short-haul intermodal, speed has to be the key and I think you would lose that if you had it blocked in a normal manifest train. I guess I'm more partial to the former MILW Sprint or ICG Slingshot model.
Another question: Could short-haul intermodal work in some non-traditional lanes?
A couple of statements by greyhounds, seemed to jump out at me, as points of truths in the 'battle between Rails and Trucking:
He[greyhounds ] stated in part:"... "Drayage costs are the killer for short haul IM" . Absolutely! The Trucking Company without a fleet of drivers/trucks under its control are at the mercy of the local situations{politics ?} Drayage is a real deal killer, for the long/short haul trucker. One can have a terrific rate, but the origin destination drayage can be an impossible, out of control expense.
He further stated "...Short haul IM must be operated totally by the railroad company. (including the trucking). This will put them in competition with their long haul trucker customers and the rails are naturally reluctant to do that." Disagree. Setting up a retail trucking operation will involve a long, expensive learning curve. "And no one is going to do it any better than the likes of JB Hunt." The importance is the through door to door rate and service. This can well be done in partnership with existing trucking firms. There's no reason to reinvent the wheel. The current partnerships work well and can be extended to shorter routes."
The JB Hunt model seems to follow, somewhat, like the FedEx/UPS {Similar operation in competition with each other tend to opedrate, more or less, in a parallel business environment}. From the outside JBH seems to have created a model that utilizes a hub and spoke system; utilizes drivers domociled withing a short distance of areas that either originate or terminate COFC/TOFC trains.
Their sales pitch to the drivers seems to be, get home 'often' [Done by operating within a few hours driving- allows them JBH to solicit freight to deliver and reload. Thus keeping some of their drivers within a 'home' REGIONAL areas]
They still operate fleets of 'long haul drivers'; but these are drivers they can utilize on the Regional Operations if they are needed. By this they are able to control the costs that would be for 'drayage'; if they lacked the regional drivers to meet their comitments. They accomplish this by having large numbers of available equipment, and employees. Not to mention, 'partner railroads' to work with as to their servce, and scheduling, and problem solving.
As the rail service improves there seems to be a growing presence of smaller carriers populating, what seems to be increasing TOFC traffic as well. Refrigerated trailers[TOFC] seem to be increasing, and many are 'operating reefer units-on, as they pass throug this area.
Pretty much "+1".
The loading/ unloading of containers sans chassis at the short-haul terminals can be done with one of the trailer-mounted rigs that John Kneiling used to advocate - then Steadman (Stedman?), now Swing-Thru, Hammar-Lift, SteelBro, etc. Or use a Piggypacker to lift both trailers and containers with chassis.
- PDN.
Author Bill Stephens has an article on short haul IM in the June issue of Trains. He includes numerous quotes and opinions. My work in intermodal marketing dealt extensively with routes of 300, 400, and 500 miles, i.e. shorter hauls.
I agree with some things Stephens wrote and disagree with others. Here's a sampler:
"75% of truck shipments go 300-500 miles." I agree. That's the length of haul for the vast majority of freight and the railroads rarely even try to compete at that distance. If the railroads want to really grow that distance is where the growth will be.
"You can't run a giant train short haul." Disagree. Customers don't care about train length, they care about service and price. An economical way to serve a short haul market would be to add a set out block (DPU?) to an existing large, long haul train. i.e., serve Chicago-Omaha by adding a set out block to a Chicago-Portland train. That would be added revenue at incremental cost.
"Locomotives are the largest above the rail cost for short haul IM." Misleading. That may be true for the rail portion of the move, but we're talking intermodal moves, not just rail. Drayage costs are the killer for short haul IM.
"Short haul IM must be operated totally by the railroad company. (including the trucking). This will put them in competition with their long haul trucker customers and the rails are naturally reluctant to do that." Disagree. Setting up a retail trucking operation will involve a long, expensive learning curve. And no one is going to do it any better than the likes of JB Hunt. The importance is the through door to door rate and service. This can well be done in partnership with existing trucking firms. There's no reason to reinvent the wheel. The current partnerships work well and can be extended to shorter routes.
"Short haul economics are totally different." Well, kind of. The same cost factors are involved but their importance does change.
I'd like to see the railroads target the remaining long haul truck business first. But there is opportunity for growth in the shorter haul markets. It's going to take some risk taking trial and error. And getting people to do that is the main issue.
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