MidlandMike Euclid MidlandMike Euclid The subject of this article references this other article that I cannot open. But the title is stated here outlines the subject: The other article: “CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.” ********************************************** How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America? Carload traffic increases because stuff produced here (that does not need to be transferred on to and off a boat) might travel by carload rather than container. I thought that in the context of the original, North American intermodal meant "domestic" intermodal. Doesn't that traffic increase here require an increase of products being made here? The title of the article (in blue above) says the increase here will come from a reduction of Chinese manufacturing. Does this not mean that the reducion of Chinese manufacturing for the U.S. will be replaced by an increase in manufacturing by the U.S.? I believe that is the expectation of the author of the article. Some manufacturing has been returning to the US from China for some years for various business reasons. I don't believe that there will be massive subsidies to return it all.
Euclid MidlandMike Euclid The subject of this article references this other article that I cannot open. But the title is stated here outlines the subject: The other article: “CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.” ********************************************** How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America? Carload traffic increases because stuff produced here (that does not need to be transferred on to and off a boat) might travel by carload rather than container. I thought that in the context of the original, North American intermodal meant "domestic" intermodal. Doesn't that traffic increase here require an increase of products being made here? The title of the article (in blue above) says the increase here will come from a reduction of Chinese manufacturing. Does this not mean that the reducion of Chinese manufacturing for the U.S. will be replaced by an increase in manufacturing by the U.S.?
MidlandMike Euclid The subject of this article references this other article that I cannot open. But the title is stated here outlines the subject: The other article: “CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.” ********************************************** How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America? Carload traffic increases because stuff produced here (that does not need to be transferred on to and off a boat) might travel by carload rather than container. I thought that in the context of the original, North American intermodal meant "domestic" intermodal.
Euclid The subject of this article references this other article that I cannot open. But the title is stated here outlines the subject: The other article: “CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.” ********************************************** How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America?
The subject of this article references this other article that I cannot open. But the title is stated here outlines the subject:
The other article:
“CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.”
**********************************************
How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says?
I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America?
Carload traffic increases because stuff produced here (that does not need to be transferred on to and off a boat) might travel by carload rather than container. I thought that in the context of the original, North American intermodal meant "domestic" intermodal.
Doesn't that traffic increase here require an increase of products being made here? The title of the article (in blue above) says the increase here will come from a reduction of Chinese manufacturing. Does this not mean that the reducion of Chinese manufacturing for the U.S. will be replaced by an increase in manufacturing by the U.S.?
I believe that is the expectation of the author of the article.
Some manufacturing has been returning to the US from China for some years for various business reasons. I don't believe that there will be massive subsidies to return it all.
I agree, that manufacturing will not return to the U.S. from China except for rare cases. We are at a turning point with China, and the stakes are high.
My overall point is that CN views the issues surrounding Chinese imports completely opposite of the way that UP and CSX views them. I don't know which views will prevail, and I also don't care.
I also do not see an economic method that permits the UP / CSX model; unless it is publically subsidized by our citizens having a overriding collective interest in bringing back jobs lost to China. I don't think they have that interest. But, maybe we can do it without asking them.
Keep in mind that a great deal of the 'switch to domestic manufacturing' tacitly or explicitly involves a rise in Chinese manufacturing 'overall cost'. One familiar example of this is the Milwaukee Foxconn thing. These are not the cheapest possible mass goods sold through Wal-Mart and others to get 'the lowest price, always' (and note how that slogan got cleverly changed, thinking more people wouldn't notice the big change) that marketing can make seem relevant. Those would more likely be taken up by the 'foreign replacement' goods traffic that parallels the new domestic sourcing.
Now, ttrraaffiicc and perhaps some others will have realized something significant about new domestic production: it is not 'by default' arriving at congested ports already handily encapsulated in robust standardized containers. It wil be interesting to see precisely what new developments put in 'carload access' (including sidings) vs. relying on TOFC rather than COFC as being easier to load and unload with the same facilities and procedures as full OTR shipment and delivery. The sort of investment in container stripping/stuffing infrastructure that might be a no-brainer for a heavily overseas-export-reliant Chinese manufacturer may not be seen as cost-effective, or even relevant, for a supplier presumably largely feeding American demand rather than export.
Overmod The term "over reliance on Chinese manufacturing" is a euphemism for part of the 'economy', not so much for the transportation industry. It's already a bit difficult to unwind that expression 'accelerate trends of reducing an over reliance on Chinese manufacturing' -- which again has to be interpreted more in terms of demand for goods than in 'moving them in greater or less quantity'. As noted, the 'opportunity' comes in transport of goods that 'replace' the Chinese production, some sourced domestically including new production ventures, some from other foreign sources that will still come into the usual ports and need to be moved to where they will be warehoused or sold. I agree in principle that this does not seem nearly as 'assured' an increase in the two types of traffic as the analysts appear to be trying to indicate. There are some steps in the analysis that were omitted in stating that conclusion, or some unstated assumptions. We could probably work through what those are, but it will have to wait until I have more aspirin at hand.
The term "over reliance on Chinese manufacturing" is a euphemism for part of the 'economy', not so much for the transportation industry. It's already a bit difficult to unwind that expression 'accelerate trends of reducing an over reliance on Chinese manufacturing' -- which again has to be interpreted more in terms of demand for goods than in 'moving them in greater or less quantity'.
As noted, the 'opportunity' comes in transport of goods that 'replace' the Chinese production, some sourced domestically including new production ventures, some from other foreign sources that will still come into the usual ports and need to be moved to where they will be warehoused or sold.
I agree in principle that this does not seem nearly as 'assured' an increase in the two types of traffic as the analysts appear to be trying to indicate. There are some steps in the analysis that were omitted in stating that conclusion, or some unstated assumptions. We could probably work through what those are, but it will have to wait until I have more aspirin at hand.
What I highlight in blue:
That is my point-- Manufacturing in China replaced by Manufacturing in the U.S.
I have been told in previous comments, that there will be no such transition of manufacturing from China to the U.S. Instead, the transition will be from China to other low cost countries in their region.
Apparently UP and CSX believe otherwise, and are expecting jobs to leave China and come to the U.S.
If this is what happens, who will pay the extra cost of manufacturing products in the U.S. compared to what they cost to manufacture in China?
Understand I am not advocating such a shift, but just wondering how it can work economically. It seems that it would require radical cost reduction of U.S. manufacturing to replace Chinese manufacturing. This would require the U.S. to implement:
A massive wage reduction.
A massive investment in automation.
A massive decrease in the quality of products, compared to quality of them being produced in China.
A combination of the above.
EuclidHow would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America?
So this is a presumption that no factory in the United States can compete on a cost basis with one in China. That's actually not the case. As factory automation increases and humans are removed from the equation it is actually more expensive, supply chain and logistics wise to have the factory in China.
I offer the business of precision plastic injection moulding which because of skills required.......does poorly in Asia. It continues to do very well in the United States. In the 1980's, the last I worked at a plastic moulding firm in SE Wisconsin they had two plants. One was almost 100% automated and the plastic presses would announce on the PA system when they needed to be refilled with plastic or needed maintenence a computer attached to the machine would monitor such things. Those tasks today are probably even more automated. Anyhoo, one of the two side by side factories only needed 7-10 people per shift and the other 50-60. They were working on automating the second plant and I would be surprised if the whole operation today needed more then 20 people per shift for both plants. In the 1980's and 1990's they looked at China but had issues with the distance to China and found they needed to remain in the United States due to the skills needed for automation as well as China would be far more unreliable with a geopolitical or natural disaster type situation. Hence even today their production is entirely in the United States and their business is really good. They have no issues with Asian competition.
I read the article and several others. They are talking "near-sourcing", particularly in Mexico, which could spur intermodal traffic from Mexico to the US Southeast, Northeast and upper Midwest from there.
Some ship traffic from southeast and South Asia will head through the Suez Canal and the closest port is Halifax and then Quebec City. Those are an over-1,000-mile haul to Chicago and have the same shorter days steaming time as does Prince Rupert on the West Coast.
EuclidThe subject of this article references this other article that I cannot open. But the title is stated here outlines the subject: The other article: “CSX Transportation and Union Pacific executives last week said they expected the global pandemic to accelerate trends of reducing an over reliance on Chinese manufacturing, which would benefit carload and intermodal traffic in North America.” ********************************************** How would reducing the reliance on Chinese manufacturing benefit carload and intermodal traffic in North America, as the title says? I have been told that reducing the reliance on Chinese manufacturing will shift manufacturing from China to other countries with low cost manufacturing. How does this benefit carload and intermodal traffic in North America?
Moving manufacturing that is starting to become 'high cost' in China to the low cost areas of Southeast Asia. Chinese manufacturing is starting to cost too much and there is much lower cost labor yet to be exploited in the nations in poverty in the area.
Never too old to have a happy childhood!
Certain traffic shifts benefit East Coast ports
https://trn.trains.com/news/news-wire/2020/04/28-cn-is-still-counting-on-long-term-growth-of-imports-from-asia
Brian Schmidt, Editor, Classic Trains magazine
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