Did the Fast Freight Era Die Alongside Steam Engines?

[greyhounds]

Market research and development for a business are like reconnaissance for the army.  Without either, you won’t know what to do.  You’ll end up doing really stupid stuff and waste your scarce resources.

 

The most blatant example I can think of was Santa Fe’s “Super C.”  The customers didn’t want it, it failed, and wasted a lot of money in doing so.

 

Yes, the IC operated flexi vans.  They carried mail on passenger trains for a short while.  One favorite photo of mine is the IC’s “Land O’ Corn” behind passenger Geeps ready to leave Waterloo, IA with two flexi vans headed to Chicago.

 

In a futile exercise of “Hey, let’s try this” the IC offered flexi van service for freight on the Panama Limited.  (Overnight between Chicago and New Orleans.) They never sold one load. 

 

Conventional intermodal service was overnight Chicago-Memphis and 2^nd AM to New Orleans.  That met the market demand just fine.  Anything faster could go air freight.

[Electroliner 1935]

Nobody has mentioned Southern RR's putting piggyback cars on their Piedmont passenger train after they chose to NOT join AMTRAK. I remember catching the train in Washington DC and I think we had four passenger cars and four F7's on the point. We stopped in the yard at Alexandria VA, and a switcher pushed about twentyfive piggyback flats up to our train, and off we went. Fast downhill and slow uphill. Moved the pigs but I think it was just a way to reduce some costs for the train on the bookkeeping side. 

[csxns]

Electroliner 1935

Southern RR's putting piggyback cars on their Piedmont passenger train

I have seen autoracks on Southern passengers trains they used to stop to pick up passengers in Gastonia and Kings Mountain NC that is where I saw them late 60's early 70's.

[timz]

Turns out PRR's 1967 schedule for TT-1 was 25 hr 15 min, Meadows to Chicago 55th St. No doubt NY Central's fastest schedule was similar.

[MidlandMike]

In the Kalmbach book Rio Grande Through the Rockies the have a photo of the passenger train the Prospector hauling a TOFC car.  In 1964 they started attaching a car or two to the back of the train, but the train was discontinued in 1967.

 

 

[BaltACD]

MidlandMike

In the Kalmbach book Rio Grande Through the Rockies the have a photo of the passenger train the Prospector hauling a TOFC car.  In 1964 they started attaching a car or two to the back of the train, but the train was discontinued in 1967.

A car or two doesn't make a successful business case for anything.

[greyhounds]

BaltACD

A car or two doesn't make a successful business case for anything.

Oh yes it does.

 

If I could put $1,000 of daily incremental revenue on a train for $200 in daily incremental cost, it made a difference.

 

Railroad operating people count cars.  Railroad marketing people count dollars.

[BaltACD]

greyhounds

 

BaltACD

A car or two doesn't make a successful business case for anything. 

Oh yes it does.

 

If I could put $1,000 of daily incremental revenue on a train for $200 in daily incremental cost, it made a difference.

 

Railroad operating jerks count cars.  Railroad marketing people count dollars.

Or it could have been $10 betting on future expansion that never happened.

How long do you fish for specific prospective business until you realize 'they' aren't taking the bait - especially after you have changed bait multiple times?

[greyhounds]

BaltACD

Or it could have been $10 betting on future expansion that never happened. How long do you fish for specific prospective business until you realize 'they' aren't taking the bait - especially after you have changed bait multiple times?

Well, you do the research and analysis as best you can.  You interview the potential customers, etc.  If it looks positive you give it a try in a "Test Market."

What you try isn't always going to work.  But if you never fail you're not trying hard enough.

[Overmod]

greyhounds

If I could put $1,000 of daily incremental revenue on a train for $200 in daily incremental cost, it made a difference.

Yeah, but you're putting it on a train that is losing, let's say, $2000 or more per trip... 

And another real disaster comes when the fancy new revenue-producing intermodal has to be paid for up front at full price -- same effect as commuter service when new equipment becomes needed -- but the incremental revenue is a tiny fraction of that cost.

[BaltACD]

 

greyhounds

 

BaltACD

Or it could have been $10 betting on future expansion that never happened. How long do you fish for specific prospective business until you realize 'they' aren't taking the bait - especially after you have changed bait multiple times? 

Well, you do the research and analysis as best you can.  You interview the potential customers, etc.  If it looks positive you give it a try in a "Test Market."

What you try isn't always going to work.  But if you never fail you're not trying hard enough.

During my career my carrier(s) tried many different transportation products and services.  Many more failed than succeeded.

No longer being employed, I am only aware of PSR and its affects on the industry.  PSR is analogous to a Black Hole where even light can't escape. 

[greyhounds]

Overmod

Yeah, but you're putting it on a train that is losing, let's say, $2000 or more per trip...  And another real disaster comes when the fancy new revenue-producing intermodal has to be paid for up front at full price -- same effect as commuter service when new equipment becomes needed -- but the incremental revenue is a tiny fraction of that cost.

Well, the obvious solution would have been to quit running the money loosing passenger train.  But the railroad had to ask “Mother, may I?” to the government fools in order to do that.  That generally took a while because the government goofs had no skin in the game and couldn’t care less if the railroad lost money.

In the meantime, if the railroad could mitigate the loss by adding some intermodal freight to the passenger train, they would be better off financially in doing so.

As to paying for the “Fancy new revenue-producing intermodal,” it comes down to the same thing.  What are the projected changes in costs vs. the projected changes in revenue?  If you cannot project covering the incremental costs, don’t do it. If you realistically can project more revenue than costs, it might be time to take a chance.

And you’re not going to get it right every time.

[Overmod]

greyhounds

As to paying for the “Fancy new revenue-producing intermodal,” it comes down to the same thing.  What are the projected changes in costs vs. the projected changes in revenue?  If you cannot project covering the incremental costs, don’t do it. If you realistically can project more revenue than costs, it might be time to take a chance. And you’re not going to get it right every time.

One problem is that the capital involved to do even limited intermodal can easily balloon into a kind of 'you bet your company' situation.  In a world where something as well thought-out and properly managed as CP Expressway can be terminated, that is an ominous consideration -- but there are times and places where 'paradigm shifts' as with stack trains or RoadRailers may make sense, and others where technology is manifestly non-starting but gets promoted anyway.  There is no objective reason things like Iron Highway, RailRunners, self-unloading container chassis, or distributed 'power modules' replacing the turbines in integral trains need to fail, but if they are done with incomplete capitalization, or without the necessary logistical support for adequate flexibility (one of the major things inherently missing for FlexiVans) even a colossal amount of money may turn out to be, sooner or later, wasted while yet higher expense might have succeeded.

If we look at the premise of Railway Express even in the Amtrak age, the idea that passenger stops might constitute nuclei for fairly wide-ranging package delivery is attractive.  But it is not "enough" saving or flexibility for a general package service.  And REA never got to a place where the older model of having trains to stations 'nationwide' from which trucks could be dispatched, or even a model where adequate passenger-service coverage to assure same-day out-and-back delivery to all desirable points could be established.  

That's not at all to say that a limited and well-defined service can't be set up and run to pay.  The discussions here about cold trains, meat trains, etc. demonstrate that it can be done, and in many cases should be done.  On the other hand, it is difficult to get adequate-scale financing to do them 'right' with the opportunity cost of capital, and the historical perceived risk, as it is...

[charlie hebdo]

greyhounds

Yes, the IC operated flexi vans.  They carried mail on passenger trains for a short while.  One favorite photo of mine is the IC’s “Land O’ Corn” behind passenger Geeps ready to leave Waterloo, IA with two flexi vans headed to Chicago.   In a futile exercise of “Hey, let’s try this” the IC offered flexi van service for freight on the Panama Limited.  (Overnight between Chicago and New Orleans.) They never sold one load. 

Did the Flexivans in Iowa make any profit?  Did the Panama offering cost IC anything since it never ran?

 

[Gramp]

charlie hebdo

 

 

greyhounds

Yes, the IC operated flexi vans.  They carried mail on passenger trains for a short while.  One favorite photo of mine is the IC’s “Land O’ Corn” behind passenger Geeps ready to leave Waterloo, IA with two flexi vans headed to Chicago.   In a futile exercise of “Hey, let’s try this” the IC offered flexi van service for freight on the Panama Limited.  (Overnight between Chicago and New Orleans.) They never sold one load. 

 

 

Did the Flexivans in Iowa make any profit?  Did the Panama offering cost IC anything since it never ran?

 

 

I remember the Hawkeye regularly ran with one to three flexivan cars on it as it went through Rockford. Fortunately those were located behind the engines, not tied to the end.

Always liked that the vans were in IC colors. 

[MidlandMike]

greyhounds

...In the meantime, if the railroad could mitigate the loss by adding some intermodal freight to the passenger train, they would be better off financially in doing so.  ...

That was the reason given for why Rio Grande added the TOFC to the passenger train.

[greyhounds]

charlie hebdo

Did the Flexivans in Iowa make any profit?  Did the Panama offering cost IC anything since it never ran?

I really don’t know.  “Profit” is something the company makes over a period of time.  It does include the cost of capital needed to handle the business.  They’ve got to cover that or they’re dead.  What a company makes on an individual sale is a “Margin,” not a “Profit.”

 

For example, Walmart knows what it pays Campbells for a can of soup.  Walmart also knows what they are able to sell the soup for.  The “Mark Up” must include the payment for the soup along with a host of other costs such as holding inventory, stocking the shelves, doing the check out, paying off the building, etc.   

 

How much of the “Other Costs” is allocated to the can of soup is pretty much arbitrary.  Cost accounting is in no way cut and dried.

 

This holds particularly true in railroading.  It is impossible to determine “The Profitability” of an individual load.  People just hate that.  But it’s true. I'll assume the flexi vans had a positive cash flow.  And that's what really counts.

 

You can get some of the costs nailed down.  For example, if a boxcar makes a turn in 21 days on average you can assign 21 days of ownership costs to the movement.  But what of the more significant train crew cost?  If a car is added to a train the crew costs don’t go up.  But they’ve got to cover the crew costs.  So, how do you sort this all out?

 

There were costs involved in setting up the flexi van freight moves on the Panama Limited. 

 

Anyway, the Land O’ Corn was discontinued in 1967.  I was 16 years old and in high school in a very small town in central Illinois. I was far more concerned with getting Darla to go to a movie with me.