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Goodbye to autoracks?

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Posted by SD60MAC9500 on Monday, July 27, 2020 12:53 PM
 

Bruce D Gillings
If the railroads want to be moving autoparts where the vendors/suppliers are not within a relatively short distance from the plants, and moving finished autos, they will need to up their game on service. Management is increasingly focused on moving parts and finished autos in long, unreliable trains that cannot meet schedules.  They view the world from a rail-centric paradigm and focus on THEIR costs, rather than a customer-centric paradigm wherein they understand their role in minimizing supply chain costs for the auto industry. The probable end result over the next decade does not bode well for railroading. PSR (an oxymoron if ever there was one, at least as practiced in today’s railroad world), will not cut it.
 
Kudos to ttrraaffiicc who continues calling this out. The shots back at him are disappointing, though not entirely unexpected. He is calling them as he sees them. My experiences as an “outsider” who deals with the end users of transportation services are consistent with virtually everything I have seen him post. Railroads ARE on the path to becoming irrelevant and losing market share to trucks. The dramatic changes in information technology, AI, and automation occurring within manufacturing, processing, and distribution facilities continue their spread throughout the entire supply chain network. Failure to adjust to that – and the failure is confounding within railroading – will equate to irrelevance that will reach a critical mass and doom the industry. There will likely remain a much smaller network of heavy-haul and bulk operations for rail, but that’s about it. Whether or not one agrees with autonomous trucking (I see it phasing in within the next 10 to 15 years), the changes in trucking, the huge investments coming in road networks (that is coming – the people with money are making sure of it), the overall increases in the efficiencies in trucking, and the information integration of trucking will make most non-heavy-haul and bulk railroading non-competitive in the value metrics of supply chains.
 
My hat is off to ttrraaffiicc for not being discouraged by all the naysayers in each of his posts. What is needed is a rethinking of how railroading can become relevant again for what fits in a trailer or container, which is MOST of what is out there. It is in the voices of the decision makers in most industries, it is in the communications of trade publications and organizations. The direction of evolution is not where railroading is going. Change is needed; ttrraaffiicc and a few others on these posts realize it and need to be listened to.   
 

To counter your first paragraph.. The big 3 and other AM's find the railroads service meeting their needs. If this were the case, RR's would not still handle a large volume of auto parts via intermodal these days, with some still moving in 86' boxcars.. Example of the former. CSX Q150/151 Livernois YD-UP Salem, IL. Auto parts to Mexico. Intermodal can cover indirect access to plant's. As can finished auto's. Finished auto's are moving faster in exisitng trains instead of waiting to build enough volume for a dedicated train. Still waiting on hearing complaints about this.

One other item about customer service. When NS announced it was shutting down Triple Crown. Ford sat down with NS to maintain trains 255/256 Oakwood YD(Melvindale, MI)-Voltz YD KC, MO moving parts for F-150 production to Fords Claycomo plant in KC, MO. The plan to follow if TC were to end serivce in this lane called for. Building an IM block loaded with EMP boxes of auto parts at Livernois YD(Detroit, MI) to KC, MO. Ford wanted the quicker trailer availability vs chassis. NS kept the service for Ford. Unreliable you say? Hardly..TC provides the JIT for Ford on schedule.

The main problem facing the RR's are transparency. Customers would like to know car arrival/departure to better plan production, etc. This simple addition alone will increase traffic on the rails by giving customers assurance of car availability, schedules,etc. You say RR's are falling out of favor? .. Well two of the worlds largest retailers; Walmart, and Amazon purchasing 53' boxes speaks volumes to me. That says they have confidence in the rail network going forward. So as much as some like to write off the rail service they must be doing something right. Most freight is not time sensitive anyway and most in logistics (such as yourself Bruce) know this.. It's about arrival and departure on schedule. Not how fast you can get there.

 
 
 
 
 
 
Rahhhhhhhhh!!!!
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Posted by ttrraaffiicc on Monday, July 27, 2020 5:06 PM

A good discussion so far. I am interested to hear what CMQ_9017 has to say about this, though I definitely agree with Bruce here.

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Posted by Gramp on Monday, July 27, 2020 9:16 PM

Anyone have thoughts regarding the Nikola startup in Arizona which will make hydrogen-powered semis for long distance OTR travel?  I think they have some German backing. 
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Posted by NorthWest on Monday, July 27, 2020 11:05 PM

SD60MAC9500
The main problem facing the RR's are transparency. Customers would like to know car arrival/departure to better plan production, etc. This simple addition alone will increase traffic on the rails by giving customers assurance of car availability, schedules,etc.

I think the bigger challenge is actually committing to meeting such a schedule, which is likely a big part of the reason car tracking AEI data is not shared with most customers.

Right now, travel times and schedule compliance metrics are erratic and subject to gamesmanship on the part of those in the field. Future success will depend on establishing that kind of schedule transparency and sticking to it.

Operational discipline is key. That requires enough assets to meet commitments.

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Posted by BaltACD on Monday, July 27, 2020 11:22 PM

NorthWest
 
SD60MAC9500
The main problem facing the RR's are transparency. Customers would like to know car arrival/departure to better plan production, etc. This simple addition alone will increase traffic on the rails by giving customers assurance of car availability, schedules,etc. 

I think the bigger challenge is actually committing to meeting such a schedule, which is likely a big part of the reason car tracking AEI data is not shared with most customers.

Right now, travel times and schedule compliance metrics are erratic and subject to gamesmanship on the part of those in the field. Future success will depend on establishing that kind of schedule transparency and sticking to it.

Operational discipline is key. That requires enough assets to meet commitments.

Car movement data is available to all customers through the AAR.  There are a number of 3rd party vendors who market data packages to fit each the needs of each customer.  Those that are data blind are so because they want to be.

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Posted by SD70Dude on Monday, July 27, 2020 11:30 PM

BaltACD

Car movement data is available to all customers through the AAR.  There are a number of 3rd party vendors who market data packages to fit each the needs of each customer.  Those that are data blind are so because they want to be.

Shhhh, don't tell them that.  What would they say when they see all these cars bouncing back and forth between terminals for no apparent reason!?

While I disagree with Ttrraaffiicc and Bruce on the current state of auto transport by rail, I agree that the Class I's need to up their game if they want to keep this traffic in the future.  And they are heading in the wrong direction. 

This focus on ultra-long trains and the operating ratio at the expense of everything and everyone else needs to end. 

Despite my mistrust of management in general, I know that there are good individual folks in the marketing, customer service, and operations departments of all the big railroads.  I hope that some of them eventually rise to positions where they can create some real change. 

As a T&E service employee, I would not be listened to if I ever dared to suggest any improvements.

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Posted by Overmod on Tuesday, July 28, 2020 5:45 AM

Aside from the roadgoing safety of hydrogen carrier fuel at the required volume, this is obviously a better proposal than Musk's in any practical operating sense apart from, perhaps, custom critical.  On the other hand it is precisely parallel to iLINT in the importance of providing a high-integrity hydrogen infrastructure, which  for much prospective American OTR likely involves a distributed hydrogen-generation architecture coupled with reiable third-party sourcing and delivery.  The issue is vasty complicated, however, unless there is government buy-in and support of the supply infrastructure (as there is where I've seen iLINT-type alternative fueling successful).  I doubt there is room in this space for two full supply infrastructures, and far too many common DoS methods to make large investments abruptly nonprofitable or even effectively unusable.  Note that a bound is imposed, no matter how silly in the long run, by Megacharger buildout and provision for EV traction-battery recharge (or other forms of electrically-driven recharge or reforming).  We already see a number of 'electric' race teams relying on relatively large gensets for their real-time charging, and I expect this is often going to be the model for truckstop charging-intrastructure buildout (as opposed to large 'supposed' electricity-fairy pixie-dust sprinkling with renewables that don't source nearly enough and distribution architecture with enormous straned cost and little alternative usefulness).  

One might argue that the renewable liquid fuel used in those large generators might equally or better be used in small sustainer engines (or reforming plants) on electric-drivetrain Class 8 tractors, for far better flexibility while retaining the ability to use supplemental power for grades or special environmental conditions...  

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Posted by n012944 on Tuesday, July 28, 2020 9:23 AM

Bruce D Gillings
If the railroads want to be moving autoparts where the vendors/suppliers are not within a relatively short distance from the plants, and moving finished autos, they will need to up their game on service. Management is increasingly focused on moving parts and finished autos in long, unreliable trains that cannot meet schedules.  They view the world from a rail-centric paradigm and focus on THEIR costs, rather than a customer-centric paradigm wherein they understand their role in minimizing supply chain costs for the auto industry.

 
Hmm.....
 
 
Yep, sounds like Toyota is fed up with the service.Laugh

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Posted by tree68 on Tuesday, July 28, 2020 11:23 AM

NorthWest
That requires enough assets to meet commitments.

The very antithesis of PSR.

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Posted by tree68 on Tuesday, July 28, 2020 11:27 AM

Juniata Man
When Musk starts building personal hovercraft in another decade, his electric autonomous trucks will be obsolete too as these new vehicles will simply fly themselves to dearlerships around the country.

It dawned on me the other day to wonder when Musk will buy up a large regional, tear out the tracks, and pave a two lane dedicated road for his autonomous trucks...  Proof of concept, you know.

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Posted by BLS53 on Tuesday, July 28, 2020 2:29 PM

Overmod

All sarcasm aside, the promise of both individual and relatively small-scale autonomous aircraft is an interesting one.   There is no fundamental reason why the technologies cannot be made reasonably safe and, to an extent, cost-effective; it is likewise almost childishly simple to implement a combination of technological and procedural safeguards to make full safety compliance effective.

Most of the control requirements for autonomous flight are much less rigorous and much more amenable to being 'algorithmized' than those for all-weather driving in a non-walled-garden environment.   A combination of hybrid-electric small-place aircraft easily spans the gap right from bus/regional rail right up to long-distance providers (turbofan or similar aircraft or HSR depending on provision) and of course seamlessly works with a 'fair' version of rideshare jitney provision.  Were the FAA to build out the second-tier network of regional airports with an analogue of the tower function Zunum rolled into their business model, it becomes theoretically practical to coordinate 'precision-scheduled' ground transportation with JIT-addressed efficient air.  And in most cases, a combination of reasonable ICS/RCS with a slightly glorified BRS safety paravane takes care of disasters...

Personal rotorcraft (think big octos or larger numbers of individual motors) become much more of a 'thing' when you can autonomously dispatch them on a share model just at the time and to the place needed, and redispatch them afterward.  I would not be surprised to find an aftermarket for components of these things, as well as older but still capable systems.  I'm surprised there hasn't been a bazaar-style open-systems development of a low-supersonic business-size airframe: the tools and widespread knowledge to set up and accomplish that have existed for many years.

What you won't see is toys for the idle rich who often can't drive, let alone pilot.  That's where most of the 'flying cars' have foundered.  Modern autonomous design is already far beyond dependence on insanely complicated hardware or expensive operations.

 

The main issue with personal aviation, is eliminating the layperson from any aspect of piloting and cost. I have more confidence in the future of autonomous aircraft than I do in ground based vehicles. The key to aviation is battery technology advancing to the point where the weight of a human can be lifted and propelled forward. This is key to the cost aspect. The navigation technology is already here.

The issue with ground transportation, is that they still rely on the current road structure, and will have to be shared with conventional vehicles, with human drivers of often less than optimum driving skills. This can only be obtained by attrition over decades. Americans are not going to give up their current vehicles easily. It would take a considerable government financial incentive to do so.

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Posted by Ulrich on Tuesday, July 28, 2020 2:38 PM

If cheap electric trucks do come about then what's stopping CSX or any other railroad from buying them? So freight that no longer moves over the raiload still generates revenue for the carrier, albeit using trucks that travel on subsidized roads. And where it makes sense to ship rail then by all means continue to do so. Use the tool that's most appropriate for the job.. what a concept. 

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Posted by NorthWest on Tuesday, July 28, 2020 4:04 PM

Ulrich
If cheap electric trucks do come about then what's stopping CSX or any other railroad from buying them? So freight that no longer moves over the raiload still generates revenue for the carrier, albeit using trucks that travel on subsidized roads. And where it makes sense to ship rail then by all means continue to do so. Use the tool that's most appropriate for the job.. what a concept.

This is common elsewhere in the world, and it leads to flexible thinking I don't see here, where railroad thinking tends to be very rail-centric.

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Posted by BaltACD on Tuesday, July 28, 2020 4:30 PM

NorthWest
 
Ulrich
If cheap electric trucks do come about then what's stopping CSX or any other railroad from buying them? So freight that no longer moves over the raiload still generates revenue for the carrier, albeit using trucks that travel on subsidized roads. And where it makes sense to ship rail then by all means continue to do so. Use the tool that's most appropriate for the job.. what a concept. 

This is common elsewhere in the world, and it leads to flexible thinking I don't see here, where railroad thinking tends to be very rail-centric.

Considering the history of governmental intervention whenever railroads started thinking multi-modal in their transportation offerings, I would not expect the carriers to invest time and effort into non-railroad transportation ventures only to have it quashed by the Feds.

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Posted by ttrraaffiicc on Tuesday, July 28, 2020 4:55 PM

Ulrich
If cheap electric trucks do come about then what's stopping CSX or any other railroad from buying them? So freight that no longer moves over the raiload still generates revenue for the carrier, albeit using trucks that travel on subsidized roads. And where it makes sense to ship rail then by all means continue to do so. Use the tool that's most appropriate for the job.. what a concept.

Honestly, this should be the going plan for railroads. There isn't any future for steel wheel on steel rail operations. The technology already suffered massively at the hands of trucking, but the jump that is about to be made by road freight in increased weight, electrification and autonomy will basically make it so that railroads are not a viable method of transport. Railroads could make the best of it by repurposing their RoWs. A paved Southern Transcon for autonomous electric trucks could bring huge increases for capacity and and speed of freight delivery while greatly decreasing costs.

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Posted by Ulrich on Tuesday, July 28, 2020 5:20 PM

Or simply use the interstate highways.. no need to repurpose anything. I don't think the railroads are done by any means...But going forward they need to quit thinking of themselves as railroads and start marketing themselves as multimodal transportation providers. CN (to use one example) took a big step in that direction with their purchase of TransX and the intermodal portion of H&R.. Ostensibly they did that to gain access to the retail transportation market.. i.e. get rid of the middleman by buying the middleman and keeping the marketup they were getting in house. Look at it from a customer's perspective: You've got a bunch of freight to move.. so long as it gets delivered in a timely manner do you really care if goes truck or rail? Of course not.. here's my freight.. take it off my hands please and deliver it as quickly and as cost effectively as possible. From that standpoint (the all important customers' standpoint) it would make alot of sense to finally dispense with the intermodal rivalry that is a holdover from before Staggers..and which nobody outside of the transportation industry cares about. Oddly we often hear that transportation is a highly competitive business... yet.. most transportation vendors today (truck/rail/other) leave the low hanging fruit hanging because "we're a railroad".. "we're truckers".. etc.. the freight doesn't fit our basket so we walk right on by. 

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Posted by zugmann on Tuesday, July 28, 2020 5:25 PM

ttrraaffiicc
Honestly, this should be the going plan for railroads. There isn't any future for steel wheel on steel rail operations. The technology already suffered massively at the hands of trucking, but the jump that is about to be made by road freight in increased weight, electrification and autonomy will basically make it so that railroads are not a viable method of transport. Railroads could make the best of it by repurposing their RoWs. A paved Southern Transcon for autonomous electric trucks could bring huge increases for capacity and and speed of freight delivery while greatly decreasing costs.

So what is your deal? 

  

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Posted by MARTIN STATION on Tuesday, July 28, 2020 6:56 PM

  As someone who has worked at an auto plant, I could not imagine shipping vehicles without doing so by rail. I don't know if we could find enough trucks to move everything we made, not to mention the road congestion at the plant and local highways and interstates especially with the perpetual road construction. And arriving parts are always running behind in the winter snow storms, much more by truck than rail.

  I wonder what the daily output is at a Telsa plant compaired to the other auto companies? We were putting out about 1600 vehicles every day five to six days a week and I think other plants produced far more. And even with everything we were shipping by rail, what was going by truck and parts being delivered added to employees coming in and leaving made local traffic congestion an issue not to mention again constant road construction. Not to mention just one bad accident bottling everything up. How many trucks would it take to replace two or three locomotives pulling auto carriers? Reality has a way of putting things in perspective.

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Posted by Bruce D Gillings on Tuesday, July 28, 2020 7:07 PM
Well, and a fine pat on the back to CSX….  NOT. You might want to re-read the first sentence: Toyota Logistics Services has awarded CSX the motor vehicle maker's President's Award for Rail Logistics Excellence in 2019. Hmm…. The competition is NS (racing to the bottom); BNSF (except for the Southern Transcon in a steady service deterioration), UP (take a look at the “fine” on-time performance metrics: https://trn.trains.com/news/news-wire/2020/03/03-union-pacific-reports-mixed-on-time-performance-results  BTW: UP’s metrics look even worse when you factor in that they have lengthened many schedules in many lanes in the past 12 months.  Please be my guest to peruse their intermodal schedules and check out their own posted metrics there for 90th percentile)  Winning the “Rail Logistics Excellence” is not very impressive: they had a pretty good shot at it. I do think CSX bottomed out last year with PSR: let’s not get too giddy that they’ve improved on mediocrity.  Overall service on CSX is still not good.  Ask their shortline partners. PSR has been a service debacle. Hearing about CSX getting an award should bring tears to their eyes – of anger. CSX has cost them who-knows-how-much money and lost shippers. Here’s to another award…..
Rail freight market share relative to trucks continues to decline. Two articles in Forbes:
 
 
One outtake from the first article:
 
This year parcel and express delivery surpassed railroads as the second largest sector after motor carriers (the motor carrier category includes truckload, less-than-truckload, and private/dedicated).
 
I suggest you read Fred Frailey’s columns over the past 5 years on railroading and non-bulk market share.  It is not at all positive.  Railroads are losing market share, period. That will likely filter down into auto traffic. It’s about service, service and service. Yes, transparency, information integration, responding to the new world.
 
 
My point was pretty simple: going forward, railroads need to up their game – a lot – or settle for shrinking market share. UPS is resorting to more OTR team drivers to replace rail intermodal on high-end shipments. Supply chains are changing, rapidly. There are many, many lanes where railroads don’t even provide service.  Coal will likely continue to shrink. UP is going through a new round of finding new domestic trucking partners: a number of the old ones have already left. Will they hold onto the new ones? Questionable. Will someone give them an award somewhere?  Probably – so what?

n012944

 

 
Bruce D Gillings
If the railroads want to be moving autoparts where the vendors/suppliers are not within a relatively short distance from the plants, and moving finished autos, they will need to up their game on service. Management is increasingly focused on moving parts and finished autos in long, unreliable trains that cannot meet schedules.  They view the world from a rail-centric paradigm and focus on THEIR costs, rather than a customer-centric paradigm wherein they understand their role in minimizing supply chain costs for the auto industry.

 

 
Hmm.....
 
 
Yep, sounds like Toyota is fed up with the service.Laugh
 

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Posted by BaltACD on Tuesday, July 28, 2020 7:33 PM

ttrraaffiicc
 Honestly, this should be the going plan for railroads. There isn't any future for steel wheel on steel rail operations. The technology already suffered massively at the hands of trucking, but the jump that is about to be made by road freight in increased weight, electrification and autonomy will basically make it so that railroads are not a viable method of transport. Railroads could make the best of it by repurposing their RoWs. A paved Southern Transcon for autonomous electric trucks could bring huge increases for capacity and and speed of freight delivery while greatly decreasing costs.

To paraphrase 'When Harry met Sally' - I am NOT going to have what he is having.

I have never been that whacked out - even when I was on PAM (Patient Administered Morphine) during my colon cancer surgery.

It is evident that someone has absolutely NO IDEA of all the materials that are required to keep a vehicle assembly plant in operation, as well as moving the the vehicles produced on the output side of the operation.  Auto racks haul 12 to 18 vehicles per rail car; truck auto carriers are half or less of that number; additionally with the staggered manner vhicles get loaded on auto carrying trucks it takes much longer to load a truck than it does a rail car.

The traveling public features that the number of trucks on the highways at present is excessive - the number of trucks required to 'replace' railroads would have the Interstate System in a condition of perpetual gridlock.

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Posted by NorthWest on Tuesday, July 28, 2020 7:35 PM

BaltACD
Considering the history of governmental intervention whenever railroads started thinking multi-modal in their transportation offerings, I would not expect the carriers to invest time and effort into non-railroad transportation ventures only to have it quashed by the Feds.

That was certainly true in the ICC era. I don't think that would be true anymore, as long as it is handled by a separate subsidiary like CN's intermodal trucking, so there's no temptation to cheat and haul across the country on a truck.

The railroads already offer dray truck operations. It would be a significant step into the trucking market, but Amazon just made the leap. They're working on being a total logistics company.

That's the future. As Ulrich says, make it easy for your customers.

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Posted by Gramp on Tuesday, July 28, 2020 10:51 PM

Gad, talk about Amazon.  Fulfillment and delivery centers going in all over it seems.  And air freight, too.  Not a rail or tie in sight.

 

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Posted by Backshop on Wednesday, July 29, 2020 7:36 AM

Gramp

Gad, talk about Amazon.  Fulfillment and delivery centers going in all over it seems.  And air freight, too.  Not a rail or tie in sight.

 

 

Maybe no siding, but how many of their deliveries were made in containers that were shipped cross country on trains?  I'd bet, quite a few.

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Posted by Overmod on Wednesday, July 29, 2020 7:51 AM

I have yet to see an automated warehouse that is rail-specific.  And I really don't any time soon, because little of that equipment can handle containers directly on rail vehicles.  Instead you have random truck access to docks and gates, with the automatic loading and dunning equipment working essentially in controlled environment under roof, but all the trucks can subsequently stage for efficient and rapid load at an actual, logical concentration point located where actual railroads can provide efficient forwarding.

For a long while BMW (before they built large numbers of vehicles here) used only European-style soft-sided trucks for all their deliveries -- this provided assured attended quality both in loading/unloading and in transit.  It has been noted that above a certain daily quantity to be transported, you run out of money for all the required trucks, to say nothing if the drivers.  Only the latter issue is helped much even by full professional-driving autonomy, and I expect Musk to be on Mars before he figures that out both satisfactorily and cost-effectively at the same time... or how to secure high-value cargo cheaply against damage when, as the old sexist tire commercial had it, 'there's no man around'.

Now I don't give Musk too long before all the other autonomous truck players begin to squeeze him badly, in a space where there will be few if any Teslarati fanbois championing him when he builds stuff that takes too long and doesn't do real-world truck right.  I predict that is when he discovers autonomous rail MU control from BEVs, and the world changes again...

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Posted by daveklepper on Wednesday, July 29, 2020 7:57 AM

Ulrich and others have completely forgotten the savings in energy and in labor that steel wheel on steel rail has over rubber on asphalt or concrete.

In terms of energy efficiency, varying with grade, curveture, wind, etc. rail is about three to five times as efficient as road.

If trucks were autonomous without any labor, then the vast productivity of a 1200 foot freight train over 200 feet most of truck cab, trailer, second and third trailers, would be negated.  I don't expect driverless automatic operation of road vehicles in the lifetime of anyone living today.  Automatic operation, maybe, with with a driver present as on all real automated isolated rapid transit systems.  Even aiport people-movers have a central control desk to monitor operations by one person.

I think Hunt understands this, even if you don't.  BNSF doesn't need to  compete with itself with over-the-road trucking.  It does need a smarter marketing plan, wherein just as Hunt essentially sells BNSF services to its customers by its use of BNSF intermodal, so BNSF should make use of Hunt when it is obvious road will better meet a particular customere's need.

Meanwhile, CN does own trucking companies with licenses to operate in the USA and seems to now have marketing smarts.  Bet they are already shifting some traffic from rail to road where appropriate, as well as doing the reverse.

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Posted by SD70Dude on Wednesday, July 29, 2020 8:10 AM

Amazon built their Edmonton, AB facility literally across the street from CP's future expanded intermodal terminal site.  Of course, it is also a 10 minute drive away from our airport, and 20 minutes away from CN's intermodal terminal, which is itself surrounded by other relatively new warehouses and distribution centres without direct rail access.

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Posted by Ulrich on Wednesday, July 29, 2020 8:16 AM

daveklepper

Ulrich and others have completely forgotten the savings in energy and in labor that steel wheel on steel rail has over rubber on asphalt or concrete.

In terms of energy efficiency, varying with grade, curveture, wind, etc. rail is about three to five times as efficient as road.

If trucks were autonomous without any labor, then the vast productivity of a 1200 foot freight train over 200 feet most of truck cab, trailer, second and third trailers, would be negated.  I don't expect driverless automatic operation of road vehicles in the lifetime of anyone living today.  Automatic operation, maybe, with with a driver present as on all real automated isolated rapid transit systems.  Even aiport people-movers have a central control desk to monitor operations by one person.

I think Hunt understands this, even if you don't.  BNSF doesn't need to  compete with itself with over-the-road trucking.  It does need a smarter marketing plan, wherein just as Hunt essentially sells BNSF services to its customers by its use of BNSF intermodal, so BNSF should make use of Hunt when it is obvious road will better meet a particular customere's need.

Meanwhile, CN does own trucking companies with licenses to operate in the USA and seems to now have marketing smarts.  Bet they are already shifting some traffic from rail to road where appropriate, as well as doing the reverse.

 

 

I didn't forget about the efficiency of steel wheel on rail... in fact I stated that railways are far from done. All I said in a nutshell was that railroads need to start thinking as multimodal transportation vendors instead of simply flogging  one mode and only taking care of some of their customers' needs. Ideally all customers would prefer one or a small number of vendors who can do it all. They don't want to partner with 100 vendors, with each one having only a narrow area of specialty. Which would be better? Vendor1: Can do rail shipments throughout the eastern US.. Two: a vendor who can do truck and rail throughout North America and to and from everywhere else on the planet? Number 2 would be better.. they can do more for the customer, and their value in the marketplace would be correspondingly higher. 

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Posted by daveklepper on Wednesday, July 29, 2020 8:32 AM

We agree.  A good overall, all our existing customers and looking for new ones, marketing stragtergy is needed.  Judging from the posted interfview, CN already has it.  Who will be next?  Will BNSF partner with Hunt?  Can KCS find a partner or go into trucking?  And the others?

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Posted by Overmod on Wednesday, July 29, 2020 8:35 AM

The problem is that fuel efficiency doesn't mean a crap to a shipper.  He's concerned with getting a suitable level of service and security for the lowest price that provides it.  Unless the 'efficiency gains' translate into dollars they don't matter, and moreover if the QoS isn't there, or in fact gets worse, no amount of discounting that covers your OR may avail you.

Now it is true that shippers are acutely aware of surcharges and other inefficiency-excusing fees and costs.  Unlike truck lines or 'freight forwarders' he cannot casually pass along higher factor costs -- 'the buck starts there'.  But if (as so many are increasingly concerned) the " "economies" of fake PSR drop aggregate revenue below comfortably-numb cherry-picking to lazy full asset utilization at austerely-nanipulated OR... there will be problems, and to the extent there are better road alternatives that can be made cost-effective enough with better QoS and less condescension you will indeed see many current rail customers 'jump ship never to return' until the railroad paradigm changes... and it will be very, very hard even with dedicated and effective railroad employees to get many of them 'back' again.

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Posted by Paul Milenkovic on Wednesday, July 29, 2020 8:42 AM

Please remove.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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