In his March '19 Trains column, Fred Frailey tells us that "In 2016, Class I railroads grossed $70 billion in revenue versus $739 for truckers. And the gap is widening."
But how much of that trucker revenue is for short-haul versus intercity, which is where I assume most of the RR revenue is from? How does intercity rail compare with intercity truck shipping? What happens if you subtract bulk rail cargo, like coal, grain, potash, etc., which trucks can't compete with. What are the comparative stats for intercity merchandise shipping?
I'm curious, because the trucks have a lot of subsidized infrastructure that railroads don't. So how do profits compare? I looked around on line, but can't find good stats. Anyone know where?
Common sense tells me that for medium-to-long-distance intercity transport, two guys in a lead diesel running the equivalent of 200-400 truckloads has got to be a lot cheaper than one guy per truck. So apples-to-apples, I'll bet the railroads are doing better than Fred says. True?
/Mr Lynn
MrLynn lot cheaper than one guy per truck
I certainly look forward to the knowledgable replies to your question. Just in general it appears that the railroads themselves no longer go after short haul business. By the time they pay to send out a local to pick up a load, juggle it through a yard, build it onto a train, haul it.....and then juggle it back through a yard, onto a local, and finally deliver it to it's final destination, I guess there is a considerable amount of overhead that the railroads have decided is only worthwhile in they get a certain minimum number of miles out of the move.
I guess that when you are a railroad, the money is in long distance, ...unless you are Amtrak?
Convicted OneI certainly look forward to the knowledgable replies to your question. Just in general it appears that the railroads themselves no longer go after short haul business. By the time they pay to send out a local to pick up a load, juggle it through a yard, build it onto a train, haul it.....and then juggle it back through a yard, onto a local, and finally deliver it to it's final destination, I guess there is a considerable amount of overhead that the railroads have decided is only worthwhile in they get a certain minimum number of miles out of the move.
Not to mention that while all the above is happening, the truck has delivered its load, and possible hauled a few more.
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...
In the time a railroad takes to deliver a load of under 500 miles 1 truck can deliver more than 4 loads. They allow 1 day to load the car 1 day to get it back to the yard if your lucky and have daily service 1 day to sort it at the yard day to move it to the final yard day to move it to the customer and one more day to unload. That's 6 day's to go 500 miles in today's Class 1 service levels. If I am running a drop and hook like my boss does with one of our larger customers 550 miles away in NYS from our terminal 9.5 hours total time including the break required by the FMCSA regulations and then the driver still has enough time to get back into PA to get his break. I have 5 drivers running this 3 rounds a week on a dedicated service and they crank out the miles.
Shadow the Cats owner In the time a railroad takes to deliver a load of under 500 miles 1 truck can deliver more than 4 loads. They allow 1 day to load the car 1 day to get it back to the yard if your lucky and have daily service 1 day to sort it at the yard day to move it to the final yard day to move it to the customer and one more day to unload. That's 6 day's to go 500 miles in today's Class 1 service levels. If I am running a drop and hook like my boss does with one of our larger customers 550 miles away in NYS from our terminal 9.5 hours total time including the break required by the FMCSA regulations and then the driver still has enough time to get back into PA to get his break. I have 5 drivers running this 3 rounds a week on a dedicated service and they crank out the miles.
But in those 4-6 days, using your figures plus the OP's, the railroad has moved 200-400 containers/trailers while your company has moved only four. If time is not urgent, then rail is far more efficient, moving 50-100 times as many trailers in the same time.
The fact that the truckers gross TEN TIMES what the railroads do says all anyone needs to know about market share.
Railroads are terrible at short moves. Truckers make their livings there.
That's just one of my drivers. Multiply that by 250 times with service times of 2 days anywhere within a 1200 mile radius and you see why the railroads get their butts whipped in freight moved on a dollar basis. Yes my industry is more expensive however our customers are not complaining about service either.
Shadow the Cats owner That's just one of my drivers. Multiply that by 250 times with service times of 2 days anywhere within a 1200 mile radius and you see why the railroads get their butts whipped in freight moved on a dollar basis. Yes my industry is more expensive however our customers are not complaining about service either.
Is that 250 drivers? That's a lot of payroll compared to two guys on a train. Of course, railroads require a lot of other people to keep things moving, especially MOW crews, something the State and Federal governments take care of for the truckers. I wonder how the rail vs road would fare if the taxpayers paid for all the RR infrastructure (capital and maintenance)? Yes, I know trucks pay fuel/road taxes, but personal cars and general taxes pay for most of the roads.
Of course Fred Frailey is speculating about the possibility of robot trucks. That sure would cut your manpower costs, though it might require dedicated highways—I sure wouldn't want to look up to a truck cab at 70 mph in the rain and see. . . no one there!
Re your claim that origin to destination by rail can take six days. With 'Precision Scheduled Railroading' it looks like the railroads are beginning to think seriously about automating the logistics, cutting out the dwell times in freight yards. I would think the whole move to intermodal would push more truckers to work with the railroads for one seamless operation. All we need is to get the rail lines to those giant truck distribution centers popping up along the Interstates.
I'm still curious where the breakeven point is today, between short/medium and long-distance hauling, for merchandise (not bulk, where railroads obviously have the advantage). You mention a '1,200 mile radius'. That seems like a pretty long distance, to me.
Perhaps the free interprise system we have takes care of these issues for now. But as things change, and they always will in this system, there will be a different mix to chosen from by those who need their items shipped.
You're forgetting about all the other employees needed to run those trains also. The maintenance of way employees dispatchers shop personal signal maintainers and all the other personal in the railroad that support that 2 man crew running down then tracks.
In my office to support a total of 250 trucks and 266 driver's we have 16 teams. Here the support staff is less than 15 percent the size of the fleet. So we have about 30 people that repair and dispatcher and keep the fleet in complaince with regulations. We don't contract it out either for repairs unless it's something our shop can't handle. Short of an overhaul we fix our equipment ourselves unless it breaks on the road.
I have 2 drivers on their way back from Salt Lake City today due home Friday morning. Our dedicated team is set for their weekend off this week on that same run. They do 10 rounds and get 2 days off. Yeah my driver's run hard and well they're well paid for what they do.
Of course the truck person doesn't mention all the property taxes the rails pay on infrastructure they own and maintain while trucks pay peanuts to maintain the infrastuctures they paid nothing to build and cause far more wear and tear on it that than any other users.
charlie hebdotruck person doesn't mention all the property taxes the rails pay on infrastructure they own and maintain while trucks pay peanuts to maintain the infrastuctures they paid nothing to build and cause far more wear and tear on it that than any other users.
Russell
At times, the trains can compete on shorter hauls. Just some numbers: We get siding from a plant in Two Harbors MN. We have 2 options, train or truck. The train car runs 180 miles on CN then hands off to BNSF. BNSF runs the car 105 miles to another BNSF yard where it's switched out. Then it runs about 160 miles to do the same thing again. After that it travels another 50 or so, gets switched again and travel about 40 miles to end up at our lumber yard. The car travels somewhere near 535 miles point A to point B. The trucks drive down the highway 401 miles doorstep to doorstep. For the 207,093# of siding, trucking it would cost $6418.26 more in freight costs. Edit: I spoke with another dealer in a Minnesota town 182 miles from the plant. He pointed out that he had such a sweet deal that he could get truckloads at the same freight cost as train cars. Sweet!
Thanks to Chris / CopCarSS for my avatar.
I'm not sure you should include loading/unloading time. I think the time should begin when the load is released by the shipper and end when spotted at the receiver. Trucks will still beat rail timewise.
I worked part time years ago for a national truck load carrier. Many loads went direct from shipper to receiver. There were quite a few that were relayed between the carrier's terminals and drivers. Some loads might sit a day or two. That doesn't mean those sitting loads were delayed. All had delivery targets, those sitting had time built into their scheduled delivery.
Jeff
PS. It does happen that one crew, even on a Class 1 can pickup and deliver a train. We have an elevator in central Iowa that sometimes ships unit grain trains to Clinton IA. One crew has put the train together, taken it to Clinton, and spotted it on ADM's receiving track.
MrLynnIs that 250 drivers? That's a lot of payroll compared to two guys on a train.
Only if you make the slightly silly assumption that all 250 drivers are competing with one train serving two endpoints in a lane.
One point she's making is that, even with team drivers, her operation can do precise point-to-point deliveries that might require 125 American train moves (in various directions over various combinations of lines) to accomplish. Now factor in HOS if any of those trains take over 8 hours in their travels, as in most cases they can't be tied up as easily as a single truck can and need to be kept moving, precision-scheduled or not.
Now in actual practice it probably isn't quite that sanguine: there will be specific lanes that produce more than the average demand for specialized hazmat, and there may well be times that a truck would 'have' to pull 3 or more trailers (or 3 or more crews will be needed to cover the necessary trailer movements) at one time. But even so, the discussion isn't "is there enough freight to fill all the trains" in this particular argument; it's "what are the costs of running the trains necessary to provide the same geographic range of service/lanes cost-effectively"?
And I think this is at least part of what is driving the neo-bean-counters in the PSR 'movement' to start declining all the traffic sources that do not contribute to low-OR train operation...
MrLynn'HOS'? "Hours of Service'? Or something else? Please do not use acronyms without defining them first, for us ignoramuses. ;-)
Hours of service.
PSR is the active discouragement of loose car merchandise railroading. The PSR carriers want 'scheduled' unit train volume movements or nothing at all. If you have repetitive 'train loads' of traffic PSR likes you, if you don't - go away and don't darken our physical plant.
Never too old to have a happy childhood!
BaltACD PSR is the active discouragement of loose car merchandise railroading. The PSR carriers want 'scheduled' unit train volume movements or nothing at all. If you have repetitive 'train loads' of traffic PSR likes you, if you don't - go away and don't darken our physical plant.
If that's true, then you're basically giving up everything that cannot make up a unit train to the truckers. I suspect containerization creates a middle ground between loose cars and unit trains. But it may take a lot more automation.
MrLynnI suspect containerization creates a middle ground between loose cars and unit trains.
Recall that EHH closed the nearly new IM facility at North Baltimore, OH. It's back up and running now.
MrLynnIf that's true, then you're basically giving up everything that cannot make up a unit train to the truckers. I suspect containerization creates a middle ground between loose cars and unit trains. But it may take a lot more automation.
You've hit one of the big nails on the head.
Back in my 'formative years' reading Trains as a kid, I bought strongly into the Kneiling version of integral unit trains on the 'iron ocean', running over true lanes but with quick intermodal transfer at a variety of intermediate points. Observing the mechanics of the ISO series I marine container, I made quick asynchronous parallel transfer the heart of a proposed high-speed container service in the Northeast Corridor in the late 1970s. If we extend quick asynchronous transfer to work between trains, and not just between train and truck, then much of the proposed advantage of crew size starts to apply as you indicated.
There is a peripheral advantage: the miles of the truck drivers become shorter and more intensely local in character, or (as noted to be inherent and present in the old CP Expressway service) one long-haul driver can both source and last-mile deliver multiple trailers or containers for each long-distance move he or she drives only once. Provided there is quick assured loading and drop, and no lumping or other expedient time wasting, the "250 drivers" become much easier both to qualify and to source as they make local deliveries within a logical working day and then go to their own paid-for homes at night instead of needing a sleeper cab or motel budgeting.
But the key in, probably, most actual service in this model involves one or more reasonably scheduled transfers between trains and lines. Fortunately in much modern JIT traffic the requirement for absolute time minimization/highest speed is much less 'significant' compared to the precision of delivery exactly where and when it can be best unloaded and deployed as production resources... note that in a great majority of cases this is not something amenable to being spotted on a fixed single-track siding using a conventional locomotive or even a Trackmobile, compared to last-mile on a rubber-tired chassis.
charlie hebdo Of course the truck person doesn't mention all the property taxes the rails pay on infrastructure they own and maintain while trucks pay peanuts to maintain the infrastuctures they paid nothing to build and cause far more wear and tear on it that than any other users.
Last year we paid over 1.8 Million in Fuel taxes alone for the fleet. Then throw in 1.3 million in 2290 taxes and tractor trailer plates each year. Let's not forget the close to 2 million in tolls we paid for last year. We pay more than our fair share of the expense of road repair. If the freaking states would not divert road funds for things like bike paths and other crap more money would be in the road repair funds for Highways. Why do you think the ATA sued the State of NY for diverting money from the Thruway to pay for the Canals in NY and won.
Shadow the Cats owner Last year we paid over 1.8 Million in Fuel taxes alone for the fleet. Then throw in 1.3 million in 2290 taxes and tractor trailer plates each year. Let's not forget the close to 2 million in tolls we paid for last year. We pay more than our fair share of the expense of road repair. If the freaking states would not divert road funds for things like bike paths and other crap more money would be in the road repair funds for Highways. Why do you think the ATA sued the State of NY for diverting money from the Thruway to pay for the Canals in NY and won.
Shadow the Cats owner charlie hebdo Of course the truck person doesn't mention all the property taxes the rails pay on infrastructure they own and maintain while trucks pay peanuts to maintain the infrastuctures they paid nothing to build and cause far more wear and tear on it that than any other users. Last year we paid over 1.8 Million in Fuel taxes alone for the fleet. Then throw in 1.3 million in 2290 taxes and tractor trailer plates each year. Let's not forget the close to 2 million in tolls we paid for last year. We pay more than our fair share of the expense of road repair. If the freaking states would not divert road funds for things like bike paths and other crap more money would be in the road repair funds for Highways. Why do you think the ATA sued the State of NY for diverting money from the Thruway to pay for the Canals in NY and won.
5.1 million is roughly 10 percent of the revenue for the company in a year. That's before we pay the required ss taxes our property taxes and income withholding for our employees. Last year IIRC the total check written to the Treasury department of various governments was about another 15 million. Schiender last year had a fuel tax bill over 1 billion dollars. That give you an idea of what this industry pays into the highway Trust funds.
And the Highway Trust Fund is still running out of money thanks to Grover Norquist.
The US Treasury has had to make a supplemental payment from general revenue (our tax dollars) into the Trust every year because the fuel tax has not kept pace with costs.
So you said you paid out 10%($5.1 million) of your revenue to maintain (and rebuild) the infrastructure your trucks use (and destroy)? I wonder how much a typical Class One railroad has to spend on maintaining and upgrading its own infrastructure? The UPRR spent $2.52 billion in 2017 on operating revenue of ~$21 billion.
Trucking carriers are mostly small companies and due to their size are generally much easier to do business with than a large company. That's their number one advantage. Number two would be that they're easier to run than a railroad. Mostly it's pickup at point A and deliver at Point B.. and done. There's no Precision Scheduled stuff involved.. Billy or Jane fires up the truck.. gets it loaded and drives to destination.. hand in the bills.. end of story.
Railroads have the advantage of size. You can bend the little trucker over all day long.. and there's always another waiting to work for less. Can't do that so much with CSX or the others.. the rate is the rate, and the service is the service. The railroads by virtue of their size have alot of clout over their customers, especailly for volume shippers where trucking isn't a viable alternative.
CSSHEGEWISCH And the Highway Trust Fund is still running out of money thanks to Grover Norquist.
And the ATA (the truckers' lobbyist) to keep their fuel tax expense down.
No the reason why the highway trust fund is going broke is in the 90s Clinton's DOT sec of Transportation made it a piggy bank for transit projects when they said if you're using highway funds to get traffic off the roads then the federal government will pick up the cost up to 80 percent to start. Ever since then the balance has trained negative. Kinda like social security when Johnson put the trust fund there on the budget to pay for his welfare state.
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