Research project

[VKSSL]

Hi all,

I'm currently doing a research project on the Class I north american rails (special focus on CN), have a fair few questions for which I have not been able to locate answers for in the archives - would anyone be able to point me in the right direction please?

 

Port partnerships

With regards to the agreements that the class I rails have with ports e.g. CN and Port of Prince Rupert / CSX with various ports:

1. Do they tend to be exclusive or are they exclusive in essence due to the geographic spread of Class I Rails?
2. What do the partnerships tend to include / agree upon? Do they tend to be for a set period of time and is there a reason as to why (or any examples) of a non-renewal?
3. Would you view these agreements as sustainable given competition laws?

 

Class I Railroads competitive landscape

1. Do you know of any way I can compare the Class I Rails (especially the Canadian ones) on metrics such as reliability, price (rates), and service? I’m trying to understand what shippers care about and who the best operators are currently.
2. It is my understanding that generally there isn’t a lot of capacity generally, and so this naturally means that if a large shipper wants to move a large of volume from one railroad to another, it is not necessarily easy to do so – is this true? In terms of negotiation dynamics between shippers and rails, who tends to have
3. And have there been many instances where shippers have moved large volumes because of poor reliability/service?
4. how often have price wars broken out between rival rail operators?

[BaltACD]

Welcome - 

Peruse the various statistics published through the AAR. (Association of American Railroads).

[kgbw49]

CN exclusively serves the Port of Halifax, which is the closest North American port to the Strait of Gibralter. It can serve Po

CN serves Port St John which is the second-closest North American port to the Strait of Gibralter. CP and CSX have access via the New Brunswick Southern Railway which functions for CP and CSX almost as a longer version of the Pacific Harbor Line and its relationship with UP and BNSF.

CN serves the Port of Quebec.

CN and CP serve the Port of Montreal.

CN serves the Port of New Orleans along with UP, BNSF, CPKC, NS and CSX.

CN serves the Port of Mobile along with CPKC, CSX and NS.

[VKSSL]

Thanks! I understand they have partnerships, but are they exclusive? What are the terms usually and the benefits? Thanks :) 

[PNWRMNM]

Your 'Port Partnership' agreements question makes more sense if you break it down to marketing and trackage agreements. Both styles will be tailored to the needs of each party. Any trackage on ground not owned by the railroad will have some type of trackage agreement. In the USA the port will generally own and maintain the trackage. These are all private agreements so you are unlikely to get them and even if you had them, they will not tell you much.

As to competitive issues, most of what you might find will be too generalized to allow you to figure much out.

Shipper's desires are easy to state; fastest transit at low rates. With port traffic you have to think about who the real customer is. Is it a domestic manufacturer, a foreign buyer, or the steamship company? Most overseas traffic is handled on a contract basis between the railroads and the steamship lines so the railroad sees the steamship line as its customer. Yes, these contracts move from one railroad to another from time to time.

The agreements are legal. They offer the steamship company a price break in return for a volume commitment. Absent a contract, traffic will move at the tariff rate which is always higher than the contract rate.

In general, the ports on the east coast compete with each other as do ports on the west coast. Prince Rupert, Tacoma, and Los Angeles. The steamship companies prefer to concentrate their traffic at a few ports, load centering they call it, to increase time making line haul moves, and not waste time stopping at several ports. 

Railroad price wars are a splendid way to waste the stockholders' money. Rail carrier managements have figured that out.

Mac McCulloch