BNSF Blames Lack of Empty Container Return for Volume Drop

[Limitedclear]

 

http://www.americanshipper.com/SNW_story.asp?news=57313

[jeaton]

 

http://www.americanshipper.com/SNW_story.asp?news=57313

[MP173]

I did not quite understand the one line abuot BNSF getting revenue on empties by placing revenue loads....

When empties return back to the west coast...does the railroad receive revenue for the returns?  If so, is it usually at the same rate as a full container?

ed

[sfrailfan]

I did not quite understand the one line abuot BNSF getting revenue on empties by placing revenue loads....

When empties return back to the west coast...does the railroad receive revenue for the returns?  If so, is it usually at the same rate as a full container?

ed

I don't quite understand it either, but I think in layman's terms the article is saying; if they can have a car coming back with a load for a 'found' customer on the fly, then money appears out of nowhere since the car had to come back (empty) anyway.

—can anyone clear this up for us, I'm curious now too.

DanZ

[StillGrande]

Wasn't there a story some time last year that it was cheaper for the Chinese to just build a new container rather than ship and empty one back across the Pacific?

[CShaveRR]

There was a news story recently (I think on NBC Nightly News) concerning the use of old intermodal containers, at about 500 bucks apiece, for construction of trendy new homes.  I'm sure there are pros and cons to this type of construction, but if more containers are coming in than are going out, why not?

[MP173]

I seem to recall also, the comment of making a new container rather than shipping it back, which seems to indicate they are paying rail transportation and also boat transport back to China.

But, we dont seem to have a definative answer to the empty return cost, if any.

This all leads to the next obvious question.  At what point in time, with China selling all those goods to us and then purchasing massive amounts of our Treasuries does China look at the return on the Treasuries (5%) and compare it to the costs of transporting and the returns on the rails...and start buying BNSF or UP?

Oh boy.

ed

[Murphy Siding]

     From the article:                                                                                                    " BNSF reported last month that it's first quarter domestic intermodal volume was down 1.2 percent to 508,000 cars compared to the same period a year earlier, and that revenue stayed flat at $586 million."

     If volume is down 1.2%, and revenue stayed the same, doesn't that mean they did better than this period last year?  At least 1.2% better?

 

 

[J. Edgar]

arent there just mountains of mt containers in Jersey??? I remeber reading that in the Wall Street Journal a fews yrs back....did they get built into condos?

[Anonymous]

Help me out here.  BNSF says it's domestic intermodal volume is down 1.2%, yet it references international intermodal in fingering a causal factor.  If it's a changeover in the pathway taken by the international containers in getting back to Asia via Europe, then that should be reflected as a drop in ISO returns westward, not domestic returns.

Does BNSF count domestics and internationals together on some of these hauls?

If empty ISO containers are being filled on the East Coast and sent to Europe, then that would be reflected in empty well cars heading back west.  Has anyone seen train after train of empty wells heading westbound?

I can tell you the real reason BNSF's domestic intermodal volume is down, and it has nothing to do with trucking company driver retention efforts:  BNSF has a well earned reputation for treating it's domestic customers like crap.  I guess that attitude has matastisized onto the intermodal division.

[UP 829]

Wasn't there a story some time last year that it was cheaper for the Chinese to just build a new container rather than ship and empty one back across the Pacific?

After a post about that last year, I started noticing the age of international containers on stack trains and there's quite a bit a variance from brand new to faded to rusted and heavily used, so I suspect they make more than one trip. It is possible the aged ones were used regionally in Asia before making the trip across the Pacific.