For better or worse, large retailers effect consolidation of purchasing, manufacturing, logistics, and sales, all of which redounds to the benefit of railroads because it creates larger and more predictable volumes on fewer lanes. The intensive off-shoring of labor-intensive assembly processes has created substantial volumes of container traffic from ports to inland distribution centers.
Railroads are fundamentally a consolidation business. Economies appear only in trainload volumes. While offshoring has wiped out labor-intensive low-tech manufacturing in the U.S., e.g. clothing, shoes, and cheap household appliances and electronics, that business was increasingly not railroad-available after about 1920 anyway.
Murph, as to your question about which came first, retailers demanding better economies and railroads responding, it's a chicken-and-egg question. The change in retailing certainly created conditions that enabled railroading to leverage its intrinsic economies. But without those intrinsic economies big-box retailing would have nothing to demand. Retailing, railroading, trucking, and warehousing are old, mature technologies, and innovation occurs in tiny increments. All of these industries are good at knowing exactly where the edge of their envelope lies, and when structural changes move the envelope edge one way or the other, they react very quickly. There are individual companies that for internal cultural reasons learn slowly or quickly, or trap themselves through contractual agreements, but those aren't hard to see.
RWM
If Walmart was relying heavily on RR service, they probably wouldn't have sited one of their distribution centers in St George, Utah - which is decidely not very close to the UP's line in southern Utah. I also heard that they were hurting from the rise in diesel prices since they were heavily dependent on trucking for getting the goods to the store.
My guess is that Walmart's impact on railroads is more negative than positive - and the operative word here is guess.
Some time back, we had a pretty good discussion about just in time shipping, on a thread Gabe started about why intermodal trains are run so fast. The general thought was, that it had to do with getting all those containers from L.A. to distribution centers of people like Walmart.
I'm reading an anti-Walmart book right now. I know- there are literally 100's of them out there, and it's not nearly as exciting as reading about trains. Among other things, I think Walmart makes other companies-competitors and supplies alike-rethink how they do business. Vendors, for examlpe have had to figure out how to be more competitve, and how to survive on thinner margins. Walmart contends that they have pushed companies to do a better job at what they do, in order to get Walmart's business.
Has this change in retailing, by Walmart, and the other big boxes greatly affected how railroads do business? In essence, has it caused railroads to do a better job at what they do?
( Please- interested in the railroad aspect of it, not the pro/anti Walmart aspect of it. The anti-Walmart sentiment is so widespread, that an anti-Walmart book sells for about 99 cents. That's probably a supply and demand issue, as there are lots of those books out there..
Help me out here-is the proper word *effect*, or *affect* ?
Thanks to Chris / CopCarSS for my avatar.
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