286K

[rrnut282]

It's a lose-lose prospect for the railroads. First they reduce revenue through handling fewer carload and also get hit with increased wear and tear. I'm afraid it won't stop. Somebody will want the next size for the appearance of cost savings and in an attempt to squeeze out every bit of revenue from the physical plant. FAST and TTCI are studying the effects of increased wear on flanges and rail, but haven't come to any conclusions, (to quantify the cost) so it is impossible to say what the point of diminishing return is. I'm afraid we're going to see the ghosts of Penn Central where the profits of handling 315K cars doesn't pay to maintain the track and slowly but surely track speed is reduced until it gets to the point of standing derailments.

Unless things change, like the ability to price customers independantly, more than a $10K/mile tax credit to "fund" improvements, or the ability of the government to spend money to fix a "private" right-of-way without all the strings attached. I know the last won't happen soon, the government can barely find enough money for the "public" right-of-ways.

[Mookie]

I am running to keep up with my own topic. I need to regroup here.

I am picking up that it doesn't increase cost that much to make bigger cars. But where does it stop. We super-size everything in America and are now reaping what the true "cost" is in medical consequences. So how big will these cars eventually become?

Concrete ties - are these not affected by weather? More physics which I don't understand.

What would be an acceptable "truce" between trucks - which are needed to get the grain to the railhead or any other commodity that trucks haul to and from and the railroads?

Mookie

[Anonymous]

Eric: What you're seeing empirically shows up in the numbers. If you take 1980 (deregulation year) as a baseline index of 100 for productivity, costs, revenue, and profit on a per-car basis, in the 23 years hence productivity has shot up and costs have fallen nicely -- but revenue and profit have fallen just as fast. I've seen a graph of this; if you project the lines and assume the slopes don't change, there's a zero point not far off in the future.

You're not alone. Lots of people beside you see a problem. That's why David Gunn is telling everyone (even if they won't listen) that the industry is in deep trouble. This is what we've been saying in the magazine. AASHTO (the state DOT association) is saying the same thing. This trend can not continue forever. Deregulation bought a quarter-century of time, but it isn't going to buy much more.

[kenneo]

QUOTE: Originally posted by jeaton

Mark,

That was an excellent article. Having been away from the business longer than most people have been alive, the analysis of the coming crisis for the short lines was a real eye-opener for me. When I was working on rate making desks in the early 70's, the so called "incentive loading" rates were for the 100 ton load in the max 263K car.

At that time, the costing formula used to establi***hose rates assumed that track cost was fixed at a certain rate per gross ton mile, without regard to any increase that might result from the heavier axle loads. Some of the operating and road people were beginning to question the this issue, but were somewhat stymied by the regulatory locks on rate making and the lack of any solid engineering evidence.

I am somewhat suprised that the the issue hasn't been adequately explored, or if it has, why the issue hasn't been rationalized. The question is, "Is there a true longer run reduction in the cost per unit shipped using the larger cars?" If not, what is the point? Competition? If rate competition from another railroad or mode is the issue, why "invent" the cost savings? Either cut the rate or drop the business, call it a day and go home.

You mentioned both in the thread and the article improved rail technology and I assume that is heavier weight, cwr, anchoring, ballasting, and tie placement. Did your research on the article give you any sense of the added cost,say per mile, for good 286 or 315 track compared to good 263?

Jay

From my experience, the only reason for bigger is that cars cost almost the same for a smaller car as a larger car. About the only difference is the cost of the steel because there is little additional labor to build a larger car. It is also my opinion that the increased track and structure costs exceed any savings in car acquisition costs. Add to that the per car rates that are now in effect (no more "per 100") were being interpreted as the same for a 40 footer as for a 50 footer, even for a 60 footer. A Plate C 50 foot box will hold a whole lot more than a Plate B 40 footer.

Does anybody but me see a problem here??

[jeaton]

Mark, I understand about the benefits and the problems with concrete ties, but I guess I was hybernating when information was put out on the developments in rail. Thanks for the update.

[Anonymous]

I need to comment on something Mark Hemphill pointed out to Larry:

Larry: We're working on an article on exactly that issue -- subsidy. The rough number is this: if tolls on the Chicago Tri-State Tollway were based on highway wear, and if your toll is $0.50, the 18-wheeler next to you should pay $457.00. Unfortunately, it pays $1.50.

Let's not forget that with all the branchline abandonments and terminal consolidations, today's railroads are wholly dependent on trucks to get the grain to the railhead. If we forced trucks to pay the full cost of road maintenance, no one could afford to get the product from the farm to the railhead in the first place. Either automobiles help subsidize the truckers' share of road maintenance, or none of us gets to eat!

Dave Smith

[Anonymous]

Larry: We're working on an article on exactly that issue -- subsidy. The rough number is this: if tolls on the Chicago Tri-State Tollway were based on highway wear, and if your toll is $0.50, the 18-wheeler next to you should pay $457.00. Unfortunately, it pays $1.50.

[Anonymous]

Jay: I do not know if much has changed from when you were in the rate-making side of the business. If there are more sophisticated costing formulas, no one has shown them to me. The questions you pose are ones I wish I could answer!

While much has been improved in track structure, the key in this case is the rail itself. The head-hardened rail now being used is much more sophisticated than what was available three decades ago. Also, railroads have moved up another increment in rail weight. As you probably recall, in the 1970s the standard heavy rail section was 136 lb. (or 132 lb. on some roads such as UP). Now, it's 144 lb. I think the extra weight is all in the head. We have an article on rail underway, from which I hope to learn a lot.

As for concrete vs. wood, in general terms, unless damaged by dragging equipment, a derailment, or improper installation, the concrete tie should last virtually forever, or so I am told. The purchase price between wood and concrete favors wood -- even assuming you're buying oak ties out of Arkansas or Oklahoma -- but the installation cost for concrete is much higher, as is the cost to get them to the site because they are so much heavier.

Moreover, it's and all-or-nothing proposition. You can't mix the two, and the concrete tie takes a different ballast section, so you have to replace the ballast at the same time. Concrete ties give a much stiffer track, which saves on fuel (the track depresses less under load, which means the locomotives are not always climbing out of a hole). Concrete also gives better gauge holding on curves.

[Train Guy 3]

Which is better at supporting weight, concrete or wooden ties. I would imagine concrete ties cost more but how often do each need to be replaced.

[rrnut282]

While there are grants and loans available to shortline RRs, the application process is beyond most "mom&pop" style operators. Plus the opportunities (available funds) in no way comes close to the total need in this country. You will perceive a rise in abandonments/embargos on a lot of marginal lines. Just like Amtrak, the politicians are taking a "since I know nothing about it, I won't do anything about it, either" stance.

[CSSHEGEWISCH]

It's a shame that John G. Kneiling is retired. He would have some VERY thought-provoking comments on this issue.

[daveklepper]

Just to say that I find this topic extremely interesting and important and I hope it receives continuous and thorough coverage in TRAINS as well as on the website. Dave

[jeaton]

Mark,

That was an excellent article. Having been away from the business longer than most people have been alive, the analysis of the coming crisis for the short lines was a real eye-opener for me. When I was working on rate making desks in the early 70's, the so called "incentive loading" rates were for the 100 ton load in the max 263K car.

At that time, the costing formula used to establi***hose rates assumed that track cost was fixed at a certain rate per gross ton mile, without regard to any increase that might result from the heavier axle loads. Some of the operating and road people were beginning to question the this issue, but were somewhat stymied by the regulatory locks on rate making and the lack of any solid engineering evidence.

I am somewhat suprised that the the issue hasn't been adequately explored, or if it has, why the issue hasn't been rationalized. The question is, "Is there a true longer run reduction in the cost per unit shipped using the larger cars?" If not, what is the point? Competition? If rate competition from another railroad or mode is the issue, why "invent" the cost savings? Either cut the rate or drop the business, call it a day and go home.

You mentioned both in the thread and the article improved rail technology and I assume that is heavier weight, cwr, anchoring, ballasting, and tie placement. Did your research on the article give you any sense of the added cost,say per mile, for good 286 or 315 track compared to good 263?

Jay

[Anonymous]

So many things worth adding, so little time ...

Mookie: 315K is permitted on most main lines now in the West, and has been for at least 10 years. It's just not very common yet. As long as track is maintained appropriately, derailments will not go up. There will be more broken rails. One of the first things I learned dispatching at KCS, is if a heavy train leaves a "track light" behind it -- the console shows an occupancy after the train clears the next control point -- is to permit no trains to pass until a track inspector had checked for broken rails. About 1 in 10 times, a broken rail was found.

Larry: We're working on an article on exactly that issue -- subsidy. The rough number is this: if tolls on the Chicago Tri-State Tollway were based on highway wear, and if your toll is $0.50, the 18-wheeler next to you should pay $457.00. Unfortunately, it pays $1.50.

Eric: You nailed it. The rates are unremunerative. The railroads are not covering their cost of capital. If the revenue will not cover the cost of NEW track (which it hasn't done in the last 30 years except for a few chemical and power plant spurs and the PRB build-in), then eventually the infrastructure is all obsolete and used up. An expert I've been corresponding with in Britain figures that by 2008, the Class I railroads will all need be out of cash. The investors clearly think the jig is up too: in the last five years, $21 billion has been taken out of railroad capitalization and given to shareholders as cash, through merger premiums and stock buybacks. All that capital is gone from railroading for good.

Mudchicken: take a look at the tie replacement rate on most short lines -- it assumes a tie lasts 100 years! Obviously, it doesn't ...

Slotracer: Rail wear is disproportionately higher if greater weight is placed on fewer axles. The formula, such as it is, is complex and highly variable. But empirically, rail wear will go up. As it was explained to me, the steel in the rail momentarily goes into plastic flow and tries to squish out from under the wheel. You're right in recalling the Green River experience, though I think that was actually 30 years ago. BM&LP tried it at the same time, as I recall, and gave up too. But since then rail technology has improved and enabled 286K to be used with acceptable rail wear.

[kenneo]

Mookie ---- If the RR holds out equipment to raise prices, there will be a lot of people finding themselves in jail - Martha Stewart style. It is so illegal that I can't begin to describe how much. Has been since about the late 1880's or so in individual states and since the ICC act, nationally. Over 100 years now. Class A felony. Many many years or 3 hots and a cot looking out.

Rates are cast in stone. ALL rates, including the contract rates, are subject to review by the FEDs and almost all states and one of the reasons is the above accusation. Federal Law REQUIRES that all customers be charged the same rate for the same service and (at least it used to be) all contract rates had to be approved by regulators because contract rates provide special incentives to just that one customer (usually in lower costs) that no one else gets.

In Oregon, we had the "R51-Car Shortage and Supply Report" that was used to prove to the state and the ICC that everybody was getting the exact same treatment - no exceptions. I saw one Agent missapply a car and he went to jail. He had one extra car and three shippers. The other two cars were due on the next train, so he supplied the car to one shipper and held the train crew for the next two. He should have held the car out for spotting with the next two, but did not, opting for efficient operation instead. The shipper that got the car loaded it post haste and released it within 90 minutes or so, and the Agent had the crew pull the car when they spotted up the next empties to the other mills. Well, that one shipper got an advantage the other two did not get, and when the ICC did their quarterly audit, charges were filed and to jail he went.

The real problem with your grain shipping is that the return on the rate charged is not adaquit to permit purchase of sufficient cars to load the grain as it is harvested. Since there is no place that can take all of that grain at once, it is just going to have to sit somewhere in the car. The railroad is faced with an investment of buying and maintaining a car for just one load per year, and then has to build and maintain track to store the car - loaded and empty. The farmer or the buyer - neither will pay the railroad to store the car. This forces the railroad to get as many loads from the car on an annual basis as they can. That is why you see elevators all over the place and all those granger branches have been torn up. The rate necessary to provide an adaquit ROI is astronomical.

[JoeKoh]

Mookie
LC has posted about sponsoring a bill to help shortlines get a tax break to help fix their track.The Okolona Zephyr(maumee &Western) is running at 10mph at best.If all that grain went on US24 which already has 60 percent truck traffic things would really be a mess.Csx pulled a set of hoppers for hamler with the transfer track still out of service.
so tell me how this gets our farmers grain to market faster?
stay safe
joe

[Anonymous]

Talking about spills, if you don't want the train to come off, keep the rails in good condition. short lines seem to be a little better at this than Class 1s.
If you look at HO scale track, when you have a section that has thinner ties than the other, there is a spot where the wheels of the trains drop a few milimeters, and might get on top of the rail and derail. That is the way some of the track here in Brunswick is. There hasn't been a derailment since at least the Chessie days, but the CSX main tracks are still connected plate & bolt, and a few seem loose. I was watching a train sunday, and that same drop I described on the HO scale layout, was happening on the main line train, as well as the track being pushed 3 inches down everytime a freigh car or locomotive truck went over. All I can say is that if railroads can't keep the track secure, then Its no suprise that we have derailments. If we could cut down on the derailments due to tack problems, then raising the max weight would be understandable.

[Mookie]

And to add to that last comment - grain was shipped at the same time every year and every year - we were short of grain cars - like it was something new this year. Kind of like Xmas comes every year at the same time and people are still surprised!!!

[Mookie]

MC:

Back in the stone age - the railroad talk was that the railroads "held" out their grain cars - putting them in some out of the way place and not releasing them - to drive up the price of moving the grain. Think this may have happened?

Moo

[mudchicken]

Dear Ms. Mook:

You may have started a posting to rival Nora's thread. But to start things, look at this:

(1) An awful lot of that grain on the ground is never going to ride the rails. It is destined to the local feed lot (a.k.a. "Bovine Disaster Areas"). It moves by truck to the local feeders that cluster around the packing houses. In Colorado, we average about 1 incident a month with the local farmer/rancher (agri-dummy) collapsing a rural bridge under a semi-load of grain/fertilizer/u-name-it. Think the ag-science departments at the local university ought to have a course on "Common Sense Off The Farm" for their incoming freshmen.(Granted Joe-Bob driving the truck may not have the college training, but the Ranch or Farm owner does and should know that Joe-Bob is on his way to wherever off the farm. And the things agriculture gets away with....)

(2) The shortlines are more in danger of getting killed by the 286K/315K thing. They don't have the $$$$ to upgrade or replace older bridges. The railroad that sold them the bridge and the railroad over it probably deferred maintenance on that line so that the money was poured-in to the main line. The owner of the shortline is probably an operating guy, clueless about engineering or maintenance, he just "runs trains"...Most shortlines have no $$$ for maintenance and this kills many a shortline, even if there is traffic.

(3) The derailments and spectacular failures do not always happen immediately. The heavy loads just drive bridges to failure quicker and beeing that they don't always spend the time to inspect track and especially bridges as they should, you suddenly have failures after a good number of heavy loads go by. And as sensitive as bridges are, the track fails faster still (poor ties on fouled ballast under small/old rail....the track modulus thing in railroad design engineerspeek)

(4) The problem is NOT solved, it is just beginning to emerge into public view. IceTEA, TEA21 NexTEA are all great concepts, but the feds never funded them except for the crappy rails-to-trails crud that never was "transportation efficiency" in the first place. The tree-huggers, politicians and the truckers/highway lobby must be smiling somewhere as they have pulled-off one of the biggest con-jobs ever imagined.....

I'll save items (5) thru (bazillion) for later posts and see who catches on.

Iron Feathers

[slotracer]

286 is nothing new. I was negotiating and publishing rates on 286 almost a decade ago. Normal US max gross is 263k. Wear on track? no one can really say for sure, although total train tonnage remains mostly the same for the past decade or so, 286 ussually means less cars in the same weight train. 286 is almost the norm in coal service and common in Grain. I did and saw a large amount of 286k rates in chemical and I suspect it is not uncommon in some minearls and construction bulk materials. It is a win win.....railroad handles fewer cars enabling them to increase volume, while per car move cost is roughly the same. RR gets a portion of the NT vs per car savings and shares it with the customer.
UP tried 315 in Green River 15-20 years ago....they stopped that as it was wearing out the tracks at one of the soda ash producers very quickly I am told.

[Mookie]

And if there are triples out there now (Nebraska won't let them - or didn't at least a few years back) - where does this madness all stop? Bigger is not always better - or is it?

[dehusman]

Railroads are running 286 cars right now. Used primarily on coal and grain cars.

Dave H.

[tree68]

This goes back to the "subsidy" being batted around over on the "Amtrak Always Late" thread - If the truckers had to truly pay for the increase in capacity they are creating, they probably wouldn't be increasing capacity. It's an insidious tax - the Interstate (and other roads, too) has to be resurfaced more often, and to handle the bigger loads. If the railroads had the same subsidy - ie, the feds and the states "repaving" the track periodically, and increasing it's capacity (specifically for weight, in this case), then 286K and 315K wouldn't be an issue.

Were someone to do a truly representative cost-per-ton-mile between trucking and the railroads, perhaps the powers that be would recognize the inherent economy in rail transport. In the meantime, every time you fill up your tank, you are helping subsidize the truckers.

It would be interesting to go to a pure "toll road" concept - every mode of transportation pays its share of what it costs to use its infrastructure. Applying the cost-per-unit-mile would probably truly reshape how we ship things and move people.

[Anonymous]

I look at it this way - Railroads are competing with Trucks. Every year Trucks get longer and longer. I was out late a few weeks ago and I saw a truck hauling 3 trailers - trains without rails. How can RR's compete? Get bigger and faster!!

[Mookie]

Reading Trains Magazine.....I don't even know where to start.

286,000 lbs for a loaded car and 315 in the future. Is this really going to work?
Isn't maintenance going to be a nightmare? Will derails go up?

We have a lot of grain around here and it spends a lot of time on the ground, because we can't get grain cars to haul it. Have they solved that problem? Does making bigger tupperware mean it will be hauled faster? I don't think so. I think a few politics are involved here. I realize I don't have a grasp of the strategy of railroad thinking, but it just seems to me this is getting a little unmanageable?

Mookie