Trucks vs. Trains

[Anonymous]

Hi guys,
This post isn't intended to incite a debate around the merits of either. I just wanted to post a perspective on this based on some stuff that do at work.

As railfans, we tend to rattle the sabre a lot on the trucks vs trains debate. One factor that I don't recall ever seeing enter the debate, and its the most important factor, is the customer. In my experience, working in transportation, its most often the customer that either directly, or indirectly decides this.

Imagine this.... you work for a very large transportation company that does over the road trucking and does intermodal. You want to do as much of both as you possibly can, because you make money doing both. This fits the business model of most of the largest truck-load carriers in the U.S. ( I work for one of them).

Now, a customer gives you an order. What do you do with it? I think that a lot of people would say, those darn truckers want to put it in a truck and haul it on a publicly funded highway. Its actually not that simple. The process has gotten a little more sophisticated.

There are a couple questions that the customer has to answer first, before that decision can be made. First and foremost, when does it need to deliver. This was a surprise to me when I started in transportation. Its obvious now, but wasn't then. The customer tells you when the load needs to deliver. That sort of rationale always made sense as relates to small package (UPS, Fed Ex,), but truckload freight, seriously? I thought it was like the post office. You give it to the carrier and it gets there when it gets there. Nope. Mr. Customer, when does it need to be there. ( I don't think that the RR's work in that space much. I'm not sure, but don't think so. I think they more so post their transit times and if you get on the train, that's the best you can expect (ie. 3rd day availability at 9am). So, once the customer tells you when it has to be there, you have to determine what sort of service is needed to meet that. That can range from team drivers (2 drivers in 1 truck) to solo driver to TOFC or COFC. You've got to see if the load will be ready to meet the cut-off for your train and then when will it be available at destination.. and does that allow enough time to make the delivery. In trucking, 95% on time or better is just expected. A lot of rail lanes delivery on time in the 50-70% range.

A LOT more trailers would ride the train if service were more reliable. Its common practice to pad the schedule that the RR publishes. i.e. if the RR says it will arrive in 2 days, I'm going to assume that really means 3 days.... now, can we still get it there in time. It might have worked on a 2 day schedule, but doesn't on a 3 day train... so lets truck it. If the service that was delivered, was more reliable, the padding could come out and more loads would get on the train. (I'm not pointing at any of you guys that work for the RR's here, lots of stuff happens between terminals. It just happens too often.)

If the customer offers a transit time that will allow intermodal to be used, then another question has to be asked; will this customer allow their shipment to be moved by rail? There are a fair number who will say no to this. The objections are based on a couple things. First, service reliability. Many shipping managers have been burned in the past by unreliable rail service. If they agree to use rail and the shipment fails to deliver on time, their butt is on the line. If they've had bad experiences, they won't stick their neck out again to use rail. Some still have a bad taste in their mouth going back to the mergers. (How many dollars have the RR's actually spent on changing this perception? Approx $0 ) There are also certain commodities that you don't want to ship by rail because of cargo damage or load shifting risks during lifting or during transit. (Guess what happens to bags of potato chips when they hit the elevation at Sherman Summit - poof!!! No kidding.) You can block and brace to avoid shifts on many products, but some shippers don't want to deal with that. Its their choice, it just simply can't ride the rails then.

So now, if the shipper gives you enough time to put it on the train and the shipper is OK with you doing that, away you go.

I wanted to share that perspective because I think a lot of times, the truckers are perceived as the evil-doers in this debate. At the end of the day, it comes down to doing what meets the needs of the customer. Actually, some of the big truckers are also the biggest customers of the railroad. They move a lot of freight in both modes. I know you guys will debate the merits of margins earned on intermodal freight, that's just a product of being in a competitive market. If you think your margins stink, try owning a fleet of rubber tired equipment instead of steel wheeled machines. It ain't any more pretty on the other side.

[CSSHEGEWISCH]

Part of the issue is also the fact that more mid-size shippers are not located near the tracks anymore and are consequently tied to the truck at some point.
Rates make a difference in both modes. If you want it faster, you're going to pay for it with a higher rate. LTL and package service are labor-intensive and you pay for it in a steep rate. Railroads have confined themselves to a wholesale function in these categories and let the truckers perform the retail role. LCL and REA both vanished a long time ago.
Reliability is a tricky issue. Promising a faster transit time won't do any good if the schedule can't be maintained. On the other hand, with the concept of just-in-time delivery to minimize inventories, early arrivals are not appreciated either. Consistency is often what the shipper wants.

[wabash1]

You bring up some good points and also that there are some that isnt true.

on time delivery is a must in this day and age. and you say railroads dont do it. this is wrong as we havee several big shippers with hot loads. Are normal trains that have the truck load carrier ( j.b. hunt schnieder etc) are on regular trains with a 12 hr window of that day delivery. and in most cases when the train gets there we have called the trucking company to come and get the trailer to go destination. In most cases ive seen a trailer sit for days waiting for the trucking company to get it.

In the other company such as ups and fed-ex they pay for a service of must get there we have several ups trains that get to final terminal ahead of schedual, and these are not little trains. and we get there faster than what thier trucks would .they pay for priority and they get it. then their is the special stack trains with a on time delivery of 99 percent . it comes from california and we fini***he delievery in florida 1,200 miles in 21 hrs .

just in time frieght we handle that also triple crown and are trains that are nothing more than auto parts train. been doing this for years . railroads are very competitive with trucking company but both have there places

[JoeKoh]

my company not only recieves raw material by truck and rail but finished product also goes by rail too.we also send product ups and fed x and bax global. It also goes on our own trucks other trucking companies or container.I think if our state was serious about improving us 24 they would help the M&W by fixing the track for intermodal speed but that would take alot of $$$$$$$.[;)]
staysafe
Joe