Login
or
Register
Home
»
Trains Magazine
»
Forums
»
General Discussion
»
Superiority of the Transcon line
Edit post
Edit your reply below.
Post Body
Enter your post below.
[quote user="MP173"]<p>Mr. Hadid:<br /><br />Very good summary. Which basically leads to the point that the industry is a very capital intensive, yet low margin investment. Those superior routes were (are) worth obtaining. </p><p>While no expert on the industry, particularly the western US, it seems that UP has had it's mainline that has been a very superior line, yet most other lines other than the Texas petrochemical market is not quite up to BNSF. The Chicago - Houston UP routing appears far superior than BNSF's. But, growth is coming leaps and bounds from imports, which BNSF seems to be developing a much better franchise.</p><p>[/quote]</p><p>The superiority of a route can't be looked at end to end as what matters more where traffic originates and terminates. A superior route "A" between endpoints 2000 miles apart is of little utility if the traffic originates at midpoints on inferior route "B" that route "A" can't economically access. For example, box traffic originating at LA/Long Beach travels in heavy volumes to the gateways of Kansas City, Memphis, and Dallas/Fort Worth, as well as Chicago.</p><p>[quote] </p><p> The Golden State route required enormous investment and effort and it appears that it handles....perhaps 25% of the Transcon route? Maybe a bit more. </p><p>[/quote]</p><p>Current train density on the Golden State is on the order of 24-30 trains per day, but the traffic mix and origins are quite different than on the Transcon. The Golden State is really a Kansas City/St. Louis to Los Angeles railroad.</p><p>[quote] </p><p>The growth is in intermodal, particularly in import. It is a very low margin business, but shows signs of improvement as contracts are churning. Those port which are capable of handling the ships and those lines which are most efficient at transporting the boxes east will be the winners. With higher efficiencies and thus lower costs, it appears BNSF will be the dominant intermodal (growth) carrier in the west. Coal appears to be a draw, with both handling all they seem to want to.</p><p>[/quote]</p><p>Steamship intermodal is indeed a high-growth business. The margins, however, are not low but are high. The ports won't be sorted out by throughput efficiency as much as other factors: ability to dredge ever deeper (if required at all); size of the adjacent loadcenter; rail connections to the hinterland; union strength. I wouldn't make any assumptions about which carrier will be dominant in either steamship boxes or coal.</p><p>[quote] </p><p>Is BNSF making any inroads into the petrochemical business in Texas? I have no way of knowing. It appears BNSF has the upper hand in the grain markets, although that might be just my perception. Grain, particularly corn has all the makings of becoming energy in a big way. BNSF seems to be positioned to leverage that movement.</p><p>[/quote]</p><p>The grain business isn't much fun. It's highly unpredicable and instable, and equipment is either in short supply or there isn't enough room to store it while it rusts. As for corn = energy, the ethanol plants are located adjacent to the corn sources and all or nearly all of their input is trucked to the plants. The cornbelt is in a band stretching east from eastern North Dakota around the southern tip of Lake Michigan into Ohio, and south from southern Minnesota into northern Missouri. Both BNSF and UP have ample access to that area.</p><p>[quote] </p><p> I am rambling on a bit, but when I look at that map on my wall, I see BNSF winning...and the key is the Transcon line. It was built for speed. The former BN mainlines slug it out with coal and grain, a pretty ideal situation.</p><p>[/quote] </p><p>All of the nine Class Is have strong franchises (including TFM and Ferromex as Class I equivalents). Otherwise they'd be gone by now. The relative differences between them turn on finer points.<br /> </p><p>S. Hadid </p>
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag
Update Reply
Join our Community!
Our community is
FREE
to join. To participate you must either login or register for an account.
Login »
Register »
Search the Community
Newsletter Sign-Up
By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our
privacy policy
More great sites from Kalmbach Media
Terms Of Use
|
Privacy Policy
|
Copyright Policy