Automotive traffic

[MP173]

Based on the recent Kankakee Belt conversation which led to the discussion on the NS Wabash line congestion or lack of in Ft. Wayne, I now ask this question.

I pulled the January 1996 Trains issue which has an excellent in depth article on the old Wabash main from Detroit to St. Louis/Kansas City.

Gabe, if you dont have this one, you should find it, if you cant, contact me.

Anyway, I was reading about how this is an important route for NS and also for Ford and GM...and as a salesman, the question soon popped in my mind.

"I wander how profitable automotive traffic is for NS (or for railroads)?"

Anyone have a clue?

Automotive industry has a big reputation of holding a hammer over vendors regarding pricing and service...do they do the same with the rails? Or is it a more balanced playing field?

I know the CN (yes, we must bring up the dreaded CN again) ex GTW has a huge amount of automotive traffic.

Any comments on this?

Happy new year to all,

ed

[Anonymous]

......if the railways aren't making money on it, then they wouldn't be doing it.

There isn't enough cash floating around in the RRs pockets to run trains at consistant losses.

[Anonymous]

QUOTE:
And now, which railroad is making more money and has fewer fluidity problems?

I think the problems on UP stem from a little more than just auto traffic.

[daveklepper]

Thanks, Mark. for being so straightforward.

[MP173]

So, how frequently is the traffic put up for bid? Is that a 5 year contract or less?

As I see it, the western roads (UP or BNSF) have the autoracks delivered to them, so they have no leverage....sort of an "open access" type situation.

They simply receive the autoracks or probably entire trains, and then deliver them regional locales for distribution. There is not much "added value" to this. What about the destinations where the autos are unloaded. Who owns the facility? Who operates it?

If I remember correctly the new Logistics Park near Joliet has a auto handling area. BTW...what a facility that is. Has anyone toured it or have any info on it?

Ok, now what about the originating carriers? Take NS for example. My guess is their ability to price the traffic would be a little better, based on local condtions, and perhaps having the plants on their lines. Is that a safe assumption?

Where does Triple Crown fall into the mix on this? Has anyone have an idea of the profitability of the TC service?

I would think the case against "open access" could be made based on this aspect of the rail's business. You need something to distinguish yourself from the competition, otherwise, you are "bidding" on business and that is seldom good, except for the company putting the business up for bid.

ed

[Anonymous]

Sure it's part and parcel, but it's not the only contributing factor.

I think the fact that they've been losing so many employees to retirement and not having the forsight to hire those necessary and train them ahead of time is a larger contributing factor.

The fact that they're hiring like never before is a good indication that they're behind the 8 ball when it comes to crew resource management.

[Anonymous]

I have a question.... is the NS Wabash line the one that runs through Danville, IL???? I'm thinking so just based on the general southwest direction that the line runs, but I'm sure someone will know for sure. I'm thinking so just because of the volume of trains they run compared to CSX in the Danville area.

[MP173]

I was there (Danville) a few years ago and snooped around at the crossing, hoping to find a tower...no luck.

I think the depot was there...is that correct?

I did see the tower in Terre Haute before it was closed....Haley Tower.

Between automotive traffic and grain, the Wabash line is pretty busy. ADM has major grinding operations in Decatur and Lafayette, perhaps others locations too.

ed

[jeaton]

In days back, railroads participating in any segment of auto traffic had to provide a proportion of the car supply to the pool for that move. For example, the Illinois Central, had a hot Harvey, IL -E. St Louis train that had GM traffic off the GTW for the Cotton Belt. At some point every year, the IC's Detroit sales rep handling the GM account would provide the car department with the requirements for the coming year. I think it was based on automobile model years.
In the pre Staggers era, rates on autos and parts between any two points would be the same for any route so the ability to provide cars and hot service was the key to participation in auto traffic. I doubt that those condition have changed, except that now I am sure that the railroad or railroads in a given route also offer a rate as a bid for the traffic.

Don't know this as a fact, but given that auto production schedules are pretty much based on a model year I would think that the basic term for a countract would also be one year.

Jay

[MP173]

Jeaton:

I think that hot IC train to E. St. Louis ran via Duquoin. Is that what you recall?

What happened at E.StL? Was the train handed off to the Cotton Belt? or was destined for the St. Louis area?

Ed

[jeaton]

Ed

The train I was thinking about cut off the mainline at Gilman on the IC's Springfield line and then on to E St Louis. Part of the line south of Springfield was on C&NW trackage rights. That was the route of the IC's Chicago-St. Louis passenger service and was maintained to good track speed standards. I am pretty sure the train was handed off to the Cotton Belt, but I don't recall the final destinations.

I don't have the URL at hand-we're out of town-but the Illinois Central Historical Society web site has a post -IC-GM&O merger map and you would be able to spot that route.

Jay

[Anonymous]

Ed,

The NS services Bunge Milling in Danville, the largest dry corn mill in the world, and they do MEGA BUSINESS there!! CSX works the soy meal side, which is worth 20 million a year, the NS has to do at least 200 million just based on the number of cars they pull in and out on a daily basis.

[andrewjonathon]

QUOTE: Originally posted by jeaton


Don't know this as a fact, but given that auto production schedules are pretty much based on a model year I would think that the basic term for a countract would also be one year.

Jay

Regarding the length of contracts, a few years ago in Canada, CP won all of the Chrysler (if I remember correctly) finished auto business away from CN. At the time I believe the news media reported it as a five year contract.

[Anonymous]

Between automotive traffic and grain, the Wabash line is pretty busy. ADM has major grinding operations in Decatur and Lafayette, perhaps others locations too

ADM has large corn and soybean processing operations in Decatur but not Lafayette. A. E. Staley has large corn processing operations in Decatur and Lafayette (two plants). The already-mentioned Bunge Milling (former Lauhoff Grain) is large in Danville.

The January 1996 NS article is one of the reasons that TRAINS is such a great magazine. I just wish more profiles of this sort were done. In fact, Regionals in Review should come back - much has changed with the regionals profiled in 1987-1990's, plus there a few new ones.

[SSW9389]

CSX has a power pool with UP for a dedicated Ford train out of Louisville. About 9 PM a rack train will leave O'Bannon loaded with pick up trucks. It often has UP power. Around midnight a train of empties will pull in to O'Bannon, again with UP power.

[MP173]

I just finished the Trains issue on Wabash, re-read it over 3 days. Now that was a great article.

It would be great if there was a clearinghouse web where information like that could be posted.

A couple of years later Trains did a similar article on my beloved Nickle Plate line thru Northern Indiana. It might have been the same author, Bill Stephens.

Was there a better merger in the rail history than the 1964 combination of the Norfolk Western, Wabash, and Nickle Plate?

Not unless it was the NW-SRR merger in the early 80's.

ed

[craig4]

I have an observation on a unrelated topic that some will find interesting. I just returned from a weekend in Kansas City and witnessed the Santa Fe JCT. flyover in action. Amazing to see the BNSF transcom elevated thru this congested area. A slow moving BNSF coal train was snaking thru as several trains passed overhead. Before the fly-over who knows how long that coal train may have waited to clear the interlocking. The productivity and time saved must be having a positive impact on operations thru the KC area. Maybe Mark will make some calls . Enjoy reading your comments. CJ