On my way home from work, I heard a story on the radio about how the average (if I remember correctly) cost to ship fruit from California to the east coast has gone from $6000 to $9000, via truck. They interviewed a guy from some type of ag organization, I do not remember what, who said hopefully the price will come down. Using trains was not mentioned. I wonder if that is because with almost all of the perishable shipments now moving by trucks much of the branchlines around here have been ripped out. Now almost all packing houses would have to transload.
"No soup for you!" - Yev Kassem (from Seinfeld)
Many of the shippers were not located on branch lines, but so what. What your question really gets at is if the abandonment of the ship-by-rail infrastructure, organization, knowledge, and practice is so great that the railroad has no reasonable chance of re-emerging as a significant transporter of perishables at any time in the near future.
The answer is of course, no, but again, so what. Seventy years ago the transportation of perishables was centered around the railroad, yet the truck gradually crept in and took market share bit by bit until all that is left is a fraction of the hard vegetables. If one had looked at perishables from the perspective of a trucker 70 years ago, one could have been daunted by the power and scope of the railroad operation, and been reasonable in deciding to seek a different line of business. But truckers did not quail. They chipped away at niches here and there and in a matter of 30 years -- less than a man's career length -- rendered moot the vast investment of perishables infrastucture, organization, and culture centered on the railroad.
If the railroad has value, railroads and shippers will find it creatively, at first in niches and then in broad swaths if the economics are there. The fact that the old infrastructure is gone is a good thing as no one will be tempted to return to use what is in all likelihood obsolete, worn-out, improper, or in the wrong place.
Remember that back before the invention of the truck, every orange and grape started its journey to the packing house in a wagon. The truck merely mechanized that. The railroad never reached into the field: the packing house always WAS a transload operation.
RWM
A couple of observations which I wonder may have some import with the topic:
Perhaps 60 years ago, maybe closer to 70, about the only thing that could sideline a passenger train when push came to shove was a meat train. Meat is heavy in shipping quantities, and certainly perishible in the wrong circumstances. So, such freights were hastened to their destinations. More than that, and certainly any specifics, I can't say. But could this happen again?
Secondly, there seems to be a stiff breeze behind the movement to consume locally produced foodstuffs of every kind. It is so costly the way we have lived, drinking Perrier and other imported waters, eating fruit produced several thousands of km away, and the like. If this notion were to gain a lot more currency and become a new way of thinking, what impact might it have on trucking and/or the railway?
-Crandell
Could perishables take priority over passenger trains? Certainly. In some corridors Z trains already do. Amtrak long-distance trains simply don't pay enough in track rental and time-keeping incentives to make them economically attractive. Corridor passenger trains are a different matter; many of the corridor operators are paying enough to obtain priority handling, often in the form of expensive capital improvements.
I am no expert on the "grow local" movement though I've read quite a few articles about it. I find it hard to believe that a majority of consumers will ever give a hoot. Cost of transportation will have to climb enormously to render hauling tap water half-way around the world so expensive that consumers will find it too pricy. There's a breaking point, of course -- we're discovering that $4/gallon gasoline seems to be one -- but who knows where it is. No one was sure where the breaking point was in gasoline prices and we blew right through $3/gallon with almost no effect on consumption.
I don't see the rising cost of transportation having anything but a positive effect on North American railroads until it becomes so high it forces the economy to contract severely. Certain business groups and lanes will be favored or harmed. One major reason railroads sought to grow in size through merger was to insulate themselves more heavily from economic fluctuations of this type. A year ago, we knew that Asian imports were showing signs of weakness. We also knew U.S. exports of raw materials would rise somewhat and offset some of this loss, but I think most of us have been surprised not only by the sheer volume of U.S. exports of raw materials, but by the strength of the carload business in general and also by the rapid growth of exported U.S. manufactured goods. Net for railroads overall is a very satisfying gain.
I have assumed that no significant percent of perishables will ship by rail within the next few decades. When UP and CSXT started the Express Lane, I hoped that they would get more perishables to move by rail. However, the trains I have seen lately do appear to be have any more cars carrying perishables than those I saw back in 2001.
Also, it appears that shipping by truck is ingrained into the ag industry. Even though transportation costs have increased by 50% within the last year, there is no mention of looking into shipping by rail. The thing that stuck me was the guy was just hoping that prices would come down instead of looking at reducing them (shipping by rail). It looks like railroads have a very long way to go to get a significant percent of the perishables business.
You are right about the packing house being a transload point (along with sorting, grading, perhaps waxing, and packing). However, to ship by rail, most produce would require a second transload, perhaps a third at the other end.
I think you're way too pessimistic.
1. It's all about money. No one will shed any tears over walking away from a truck-centric transportation system if they can save a penny a pound by rail. They walked away from rail, didn't they? They can walk away from truck, too. The Class I railroads themselves may not be organizationally or culturally equipped to handle the retail-level trade that it may take to capture this business, but there are plenty of short lines, 3PLs, and ambitious ex-railroaders that understand how to make it work.
2. General growth in the economy will greatly favor railroads regardless of oil price increases. Ton-miles are expected to double in the next 25 years in the U.S. If market share between truck and rail is to stay the same, then trucking has to not just retain its current driver workforce but attract a new one, cover the rise in cost in diesel fuel, cope with the snarl of traffic congestion in cities (which will likely seek temporal and route restrictions), re-equip with EPA compliant engines, and maintain the same price/service ratio it has relative to railroads. How's it going to do that? I don't think anyone in transportation thinks it can.
3. Multiple transloads are not out of the question. Think about a UPS package -- city truck to dock, dock to pup, pup to intermodal ramp, deramp at the other end, pup to dock, dock to city truck. The package has switched modes or boxes eight times. That's an egregious example but even in bulk commodities we're moving grain by truck to covered hopper, covered hopper to steamship container, steamship container onto well car, well car to a port, container off the well car, container onto the ship (with probably a stop on the dock on the way), off the ship, onto a truck, and to a customer's feedlot. That's also eight handlings.
The existing rail perishables business might not have shown much growth in the past few years but that doesn't necessarily indicate it won't in the future. It might just not have quite reached its threshold yet. Thirty years ago we all thought intermodal was in most cases a method of making a profitable boxcar business into an unprofitable piggyback business and hoping to make it up on volume ... and now look what's happened.
Railway Man wrote: Thirty years ago we all thought intermodal was in most cases a method of making a profitable boxcar business into an unprofitable piggyback business and hoping to make it up on volume ... and now look what's happened.RWM
Thirty years ago we all thought intermodal was in most cases a method of making a profitable boxcar business into an unprofitable piggyback business and hoping to make it up on volume ... and now look what's happened.
Well, we didn't ALL think that.
But this isn't the place to go into a carbox vs. TOFC discussion.
Rail perishable business has been an absolute hot button for me since I worked to get bananas back on the IC(G). Chiquita and Dole would bring shiploads of bananas into Gulfport, MS and the railroad would look the other way like they didn't exist. I did get some of 'em back on the railroad. I had to fight the operating department ("bananas, we don't want to haul no stinking bananas") and the freight claims folks who dreamed of the day they would achieve their ultimate goal of never paying a claim for damaged freight the day the railroad handled no freight. But bananas rode the rails north. And I loaded the boxes with revenue freight both ways. UPS and LTL went just fine in a Chiquita container southbound. Money in the bank.
The perishable market is absolutely huge, and it's long haul. The meat market is very concentrated in large production facilities located far away from coastal population centers. It's steady, long haul business custom made for rail transport.
California produces almost half of the freish fruit and vegetables for North America. Also a huge market, something like 500,000 loads per year. Government regulation drove it from the rails. It'll come back. Trucking is becomming non economic.
It's only a matter of time.
If oil stays high their will be a shift from distribution systems that rely on trucks to systems that rely on rail. However, it will take a generation.
When I earned my living improving the C&NW chemical business I saw a lot of traffic flows that made more sense moving by truck vs. rail. However, we continued to handle the traffic because the people paying the freight bills had started out working for railroads and were not comfortable with trucks. Just after I left the C&NW for the Espee in 1982 these people pulled the pin and were replaced by people that came out of the trucking business. Only then did much of this obvious truck traffic start to move by truck. Another reason to move from Chicago to San Francisco :).
The same thing comes up with ethanol in today's market. The oil industry doesn't understand refinery inputs moving in anything other than a pipe line or tanker. We discovered this when we were putting together Shell's TankTrain from the Bakersfield field to Wilmington, CA. The critical part of the project was having the transportation people at Shell selling rail to their peers running the refinery.
I think change will come in time and when it comes is will be a very deep change.
2600 miles between LA and Boston give or take a few miles.
Diesal 5.00 a gallon. Truck = 300 gallon fillup.
One Thousand Five Hundred Dollars to get 300 gallons of gas.
Figure in 6.0 Miles per gallon to move it. That comes out to 440 gallons. Idle time is 8 hours per day.. call it 10 for singles, almost none for teams. That's another3 gallons or so gone sitting still. (Remember, no APU's or assisted power/Hotel support)
Singles do it in about 6 days. (ALOT less than that but let's not go there today)
Teams do it in 72 hours.
Freight rate. Per mile. Need about 1.40-2.20 to break even and make a profit on that move.
Company driver pay is approaching .50 per mile. That works out to 1300.00
Already you have fuel at $2200.00
Add the two together and it works out to 3500 dollars in basic cost to truck that stuff LA to Boston.
You also are going to carry other costs on that truck. It does not turn a wheel without permits, taxes, weight fees, consumables, food, water etc etc etc
Call it roughly 4500 dollars basic cost to run one load in three days team between LA to Boston. That works out to about a rate of 1.73 per mile.
You, me, family, friends will have to pay that at the Grocery store. I think Apples now are about 1.60 per pound.
46,000 pounds of apples in the box will be valued at roughly 75 thousand dollars to somebody. It isnt hard to raise the price from 1.60 to 1.70. That ten cents will pay the 4600 dollars or so freighting charges from LA to Bos.
If Desiel os 10 dollars per gallon, those apples will be two bucks a pound or more and someone somewhere will haul it. Otherwise it all will rot in the grower's lands to waste.
bobwilcox wrote: If oil stays high their will be a shift from distribution systems that rely on trucks to systems that rely on rail. However, it will take a generation. When I earned my living improving the C&NW chemical business I saw a lot of traffic flows that made more sense moving by truck vs. rail. However, we continued to handle the traffic because the people paying the freight bills had started out working for railroads and were not comfortable with trucks. Just after I left the C&NW for the Espee in 1982 these people pulled the pin and were replaced by people that came out of the trucking business. Only then did much of this obvious truck traffic start to move by truck. Another reason to move from Chicago to San Francisco :).The same thing comes up with ethanol in today's market. The oil industry doesn't understand refinery inputs moving in anything other than a pipe line or tanker. We discovered this when we were putting together Shell's TankTrain from the Bakersfield field to Wilmington, CA. The critical part of the project was having the transportation people at Shell selling rail to their peers running the refinery.I think change will come in time and when it comes is will be a very deep change.
I think there's a factor here in the perishable market that didn't exist in the chemical business. This factor will speed up the change from truck to rail. (Although I do agree that getting people to change is the hardest part.)
Companies that ship perishables, such as Tyson, are back on their heels. The information I have is they're averaging a loss of $45 per bovine they dispatch. Smithfield just dumped its beef business. Swift has been sold so many times it'll make your head spin.
Pilgrim's Pride, the #1 poultry producer, is closing plants. Hog producers have been described as "Being in a state of shock" and not knowing what to do. They can't pass their increased costs along and they're bleeding money.
Now a smart railroad marketing person can make someone at Tyson, Swift, Pilgrim's Pride, etc. a hero and get him/her a promotion by showing them how they can save their employer significant money by shifting to intermodal. That will be the incentive for someone at the shipper to champion change.
Because of this, I think the "Change to Rail Intermodal" will come sooner rather than latter.
A couple of points that no one else has addressed yet.
First, there are existing produce moves from the west coast to the east that are rapidly gaining share. Railex which operates a twice weekly unit train of reefers from Washington State to Rotterdam, NY between specially constructed warehouses with trackage inside and otherwise specially equipped to handle produce.
Second, one reason many railroads have de-marketed produce is the extreme time and dmage claim exposures. There are a number of reasons for the excessive claims, old equipment, poor maintenance, disputes over fueling of reefers and lack of facilities at various locations, poor car management and others. These factors which can cause mass spoilage of produce or meats can result in very large claims far outweighing the transportation revenue.
Also, as has been mentioned trucks are faster and the public's expectations about the freshness of produce that is acceptable at markets has risen significantly since the end of World War II. Although our existing energy crisis which is wreaking havoc on the truckers may force a reduction in some of those expectations even as prices rise making rail a more acceptable and customary produce transportation alternative.
LC
Well, it's doubtful that any significant change from truck back to rail will ever occur thanks to one very simple phenomenon. Every trucking company manager knows that if he does not find a way to continually meet or exceed his customer's expectations, there are at least 10 other trucking companies lined up just outside the customer's door waiting for the chance to handle that customer's business. Competition is a wonderful motivator and it has given us the highest standard of living in the world today.
By contrast, railroads are not under this kind of pressure for continuous improvement. All of them either have an oligopoly or monopoly, depending on the commodity and market. They just don't have the same level of intense commitment to the customer and the marketplace that truckers have. An awful lot of them just don't seem to care very much anymore. Remember that the infamous phrase "demarketing" came out of the railroad industry not the trucking industry.
Yes, it's true that rail service is the best it's ever been. And most shippers and receivers will tell you that rail service overall is about where the trucking industry was 10-12 years ago.
I think that perhaps if we slowed things down just a little bit in places like the Meat Country and other parts of the shipping/Recieving it will be much better. The truly important cargos can speed to thier recievers and be unloaded within a few minutes to half a day max.
I used to be content ordering stuff online and allowing UPS Buster Brown to truck it from the west coast to where I am for a week across that hard hot southwest USA. Now I prefer to spend a few more dollars and order it flown by USPO or UPS. Small stuff, nothing big.
Trains seem to be doing good business these days. I think I remember a Sysco back east that tried to get railcars of food to get out from under the trucking thumb. The Sysco discovered that the railcars showed up whenever they showed up and then they got charged perdiem if they did not get railcar unloaded quickly. Now I think they allowed that siding and dock to be buried in HVAC equiptment, not sure.
I have not forgotten the Railex train from the West to Albany NY. There ought to be more trains with a priority schedule. This will take the pressure off truckers from sitting for days waiting for Produce to be blast chilled. Perhaps they can then go to Albany, base there and run regional sleeper and make a good living that way.
The last time I picked up a Produce load out of Americold in Salinas CA, or a location VERY much in that coastal area, I had 5 inportant bosses and brokers panting into the telephone... PLEASE Team Driver PLEASE!! THEY ARE READY AND WAITING FOR YOU. We proceeded to horsewhip the rig across the hills and through California rush hour to get to the dock asap.
We sit 20 feet from thier shipping office watching Satellite TV and cooking meals in the cab for the next 46 hours chugging away the entire time. Income for two people? ONE BIG FAT ZERO.
Never again. No cargo is that important... except wartime freight.
jgiblin wrote: Well, it's doubtful that any significant change from truck back to rail will ever occur thanks to one very simple phenomenon. Every trucking company manager knows that if he does not find a way to continually meet or exceed his customer's expectations, there are at least 10 other trucking companies lined up just outside the customer's door waiting for the chance to handle that customer's business. Competition is a wonderful motivator and it has given us the highest standard of living in the world today.By contrast, railroads are not under this kind of pressure for continuous improvement. All of them either have an oligopoly or monopoly, depending on the commodity and market. They just don't have the same level of intense commitment to the customer and the marketplace that truckers have. An awful lot of them just don't seem to care very much anymore. Remember that the infamous phrase "demarketing" came out of the railroad industry not the trucking industry.Yes, it's true that rail service is the best it's ever been. And most shippers and receivers will tell you that rail service overall is about where the trucking industry was 10-12 years ago.
I think you're being overly pessimistic. The railroads can, and do, handle perishable commodities in competitiion with over the road trucking. So we're not talking about breaking in to a new line of rail business, but instead expanding an existing line as the economics of rail vis a vis trucking shift to favor rail.
Lettuce, for example, is a very perishable commodity. For the week ending 5/29/2008 the USDA reports that the Salinas-Watsonville District in California shipped around 354 truckloads of lettuce. 43 of those truckloads went on intermodal Z trains. That's a little less than one out of eight loads, but remember, the railroads aren't even trying (yet) to get the lettuce going to Seattle, Los Angeles, Minneapolis, etc.
On lanes where they are trying, they are being competitive with over the road trucking. And the railroads' competitive position vs trucking is only going to get better for the forseable future. I'm reasonably confident that the rail market share of this perishable business will increase dramatically sooner rather than latter.
jgiblin wrote:Well, it's doubtful that any significant change from truck back to rail will ever occur thanks to one very simple phenomenon. Every trucking company manager knows that if he does not find a way to continually meet or exceed his customer's expectations, there are at least 10 other trucking companies lined up just outside the customer's door waiting for the chance to handle that customer's business. Competition is a wonderful motivator and it has given us the highest standard of living in the world today.By contrast, railroads are not under this kind of pressure for continuous improvement. All of them either have an oligopoly or monopoly, depending on the commodity and market. They just don't have the same level of intense commitment to the customer and the marketplace that truckers have. An awful lot of them just don't seem to care very much anymore. Remember that the infamous phrase "demarketing" came out of the railroad industry not the trucking industry.Yes, it's true that rail service is the best it's ever been. And most shippers and receivers will tell you that rail service overall is about where the trucking industry was 10-12 years ago.
I don't disagree with anything you say, espically if you compare an owner operator with a an employee of any company. If the owner operator does well his kids get to eat! If he doesn't do well it is a personal disaster. Maybee that is why their are very virtually no financially succesful truckers. They give great service but for what? On the other hand the railroad guy can go to his boss and get millions of dollars to run apples from the PNW to the Northeast.
In addition a succesful trucker and railroad serve two distinct markets. People pay UPS pay very high rates per ton mile to move packages for service first and cost second. People pay the NS very low rates per ton mile to move coal from WV to Tidewater for cost first and service second. Things get very interesting when you move toward the middle and things are not quite so clear cut weighing service vs. cost.
JOdom wrote:Can I ask what may be a dumb question or two? The Railex operation from Washington state to Albany (area) NY seems like a great idea - let the truck do the consolidation and distribution and let the train do the long haul. Couldn't some enterprising company set up a network of warehouses like those in Albany in major metropolitan areas (Dallas-Ft. Worth, Atlanta, Orlando, Memphis, etc) distributed around the country and do the same thing? Meat trains could run from the production points (slaughterhouses) to the same warehouses (or adjacent warehouses set up for meat) to maximize use of the assets.
The answer is yes. Who will it be?
bobwilcox wrote: JOdom wrote:Can I ask what may be a dumb question or two? The Railex operation from Washington state to Albany (area) NY seems like a great idea - let the truck do the consolidation and distribution and let the train do the long haul. Couldn't some enterprising company set up a network of warehouses like those in Albany in major metropolitan areas (Dallas-Ft. Worth, Atlanta, Orlando, Memphis, etc) distributed around the country and do the same thing? Meat trains could run from the production points (slaughterhouses) to the same warehouses (or adjacent warehouses set up for meat) to maximize use of the assets.The answer is yes. Who will it be?
Probably a 3PL.
bobwilcox wrote: jgiblin wrote: Well, it's doubtful that any significant change from truck back to rail will ever occur thanks to one very simple phenomenon. Every trucking company manager knows that if he does not find a way to continually meet or exceed his customer's expectations, there are at least 10 other trucking companies lined up just outside the customer's door waiting for the chance to handle that customer's business. Competition is a wonderful motivator and it has given us the highest standard of living in the world today.By contrast, railroads are not under this kind of pressure for continuous improvement. All of them either have an oligopoly or monopoly, depending on the commodity and market. They just don't have the same level of intense commitment to the customer and the marketplace that truckers have. An awful lot of them just don't seem to care very much anymore. Remember that the infamous phrase "demarketing" came out of the railroad industry not the trucking industry.Yes, it's true that rail service is the best it's ever been. And most shippers and receivers will tell you that rail service overall is about where the trucking industry was 10-12 years ago.I don't disagree with anything you say, espically if you compare an owner operator with a an employee of any company. If the owner operator does well his kids get to eat! If he doesn't do well it is a personal disaster. Maybee that is why their are very virtually no financially succesful truckers. They give great service but for what? On the other hand the railroad guy can go to his boss and get millions of dollars to run apples from the PNW to the Northeast. In addition a succesful trucker and railroad serve two distinct markets. People pay UPS pay very high rates per ton mile to move packages for service first and cost second. People pay the NS very low rates per ton mile to move coal from WV to Tidewater for cost first and service second. Things get very interesting when you move toward the middle and things are not quite so clear cut weighing service vs. cost.
Bob, I haven't been in the business quite as long as you (but I might have as many grey hairs). I like very much the way you capture the service and financial results comparisons so succinctly and graphically.
I think what few people realize (or would like to cope with) is that the technology of trucking and railroads is fundamentally different and how that difference plays out in service. For a trucker not providing good service requires almost complete dereliction of duty. For a railroad, providing the same level of service takes scrupulous discipline and teamwork of hundreds of people and no small amount of luck. I think we obsess far too much on our wish that railroads were just like trucks, which they cannot be due to their aggregation-and-batch method of obtaining the value out of the technology of the railroad. And we spend not nearly enough candor on realizing why the railroad is not like a truck and thus fail to do what we can do well. The new emphasis on multi-service logistics parks with point-to-point non-yarded trains between them is I think perhaps the most clear-eyed and smart thinking in the business in years.
beaulieu wrote: bobwilcox wrote: JOdom wrote:Can I ask what may be a dumb question or two? The Railex operation from Washington state to Albany (area) NY seems like a great idea - let the truck do the consolidation and distribution and let the train do the long haul. Couldn't some enterprising company set up a network of warehouses like those in Albany in major metropolitan areas (Dallas-Ft. Worth, Atlanta, Orlando, Memphis, etc) distributed around the country and do the same thing? Meat trains could run from the production points (slaughterhouses) to the same warehouses (or adjacent warehouses set up for meat) to maximize use of the assets.The answer is yes. Who will it be? Probably a 3PL.
I think you are correct. It will be someone who flourished flipping homes in Vegas.
I was shocked to learn about five years ago that one of the Big 3 auto manufactures had contracted out their set-up auto physical distribution to UPS! I always was happy I never had to find out what the world would be like if one of my captive chemical producers had contracted his outbound shiping to UPS. As a capitive Texan once told me, "You've got me by the b**** but I'm in a perfect postition to p*** on you!" It was a sad day in railroading when the customers got bigger than us.
I could be wrong but I think there is a market like this in NYC. Its called Hunts Point Market. It has or had rails and handled meat and produce.
bobwilcox wrote: beaulieu wrote: bobwilcox wrote: JOdom wrote:Can I ask what may be a dumb question or two? The Railex operation from Washington state to Albany (area) NY seems like a great idea - let the truck do the consolidation and distribution and let the train do the long haul. Couldn't some enterprising company set up a network of warehouses like those in Albany in major metropolitan areas (Dallas-Ft. Worth, Atlanta, Orlando, Memphis, etc) distributed around the country and do the same thing? Meat trains could run from the production points (slaughterhouses) to the same warehouses (or adjacent warehouses set up for meat) to maximize use of the assets.The answer is yes. Who will it be? Probably a 3PL. I think you are correct. It will be someone who flourished flipping homes in Vegas. I was shocked to learn about five years ago that one of the Big 3 auto manufactures had contracted out their set-up auto physical distribution to UPS! I always was happy I never had to find out what the world would be like if one of my captive chemical producers had contracted his outbound shiping to UPS. As a capitive Texan once told me, "You've got me by the b**** but I'm in a perfect postition to p*** on you!" It was a sad day in railroading when the customers got bigger than us.
Its SOP in Europe, has been for a while. National borders and customs requirements caused it to happen, even though much of that has gone away with the formation of the EU and the EEC. Transfesa has the Ford contract (now they are part of DB Schenker), DB Schenker has Volkswagen, TX Logistics has Audi, There are also a few specialist Auto only Logistics companies. UPS and Fedex are trying to play catch up in the Logistics business to avoid being just a supplier.
Railway Man wrote: Bob, I haven't been in the business quite as long as you (but I might have as many grey hairs). I like very much the way you capture the service and financial results comparisons so succinctly and graphically.I think what few people realize (or would like to cope with) is that the technology of trucking and railroads is fundamentally different and how that difference plays out in service. For a trucker not providing good service requires almost complete dereliction of duty. For a railroad, providing the same level of service takes scrupulous discipline and teamwork of hundreds of people and no small amount of luck. I think we obsess far too much on our wish that railroads were just like trucks, which they cannot be due to their aggregation-and-batch method of obtaining the value out of the technology of the railroad. And we spend not nearly enough candor on realizing why the railroad is not like a truck and thus fail to do what we can do well. The new emphasis on multi-service logistics parks with point-to-point non-yarded trains between them is I think perhaps the most clear-eyed and smart thinking in the business in years.RWM
You've got a good point. The "aggregation-and-batch method" used in railroading adds many "events" to a rail move. Each of these events has a possibilty for failure which will degrade service quality. They also add expense. These "events" are not present in a truckload move where the unit of sale is the same as the unit of production and a driver personally oversees each move and ensures its quality. As you say, it is hard for a railroad to match the service quality offered by a trucker.
However, if service qaulity was all that counted everything would move by truck. Service qaulity certainly has to be present, but it is part of a service mix offered to the customer. It is not the ultimate goal in logistics.
There is a cost element in the mix that increasingly favors rail.
The railroads can either cede vast amounts of traffic to the truckers or they can develop markets such as fresh fruits and vegetables/meat. It's long haul, high volume traffic and it pays well by rail standards. It will take some work, but it's possible. The rail share of fresh meat shouldn't be 0.00%.
The cost part of the service mix has moved to favor rail. The USDA is reporting that the truck charge on lettuce from Salinas to Chicago is averaging $5,900. That's around $2.45/mile. That's a lot of money to just cede to the truckers.
No, the railroad is not going to win a race with a trucker from Salinas to Chicago for the reasons you cite. The railroad will not deliver with the same consistancy as the trucker. But a railroad can offer enough service quality to deliver that lettuce in good condition for sale - and the cost savings possible by rail can offset the service advantage of the trucker. Somebody just has to put this thing together.
Expresslane wrote: JOdom wrote:Can I ask what may be a dumb question or two? The Railex operation from Washington state to Albany (area) NY seems like a great idea - let the truck do the consolidation and distribution and let the train do the long haul. Couldn't some enterprising company set up a network of warehouses like those in Albany in major metropolitan areas (Dallas-Ft. Worth, Atlanta, Orlando, Memphis, etc) distributed around the country and do the same thing? Meat trains could run from the production points (slaughterhouses) to the same warehouses (or adjacent warehouses set up for meat) to maximize use of the assets. I could be wrong but I think there is a market like this in NYC. Its called Hunts Point Market. It has or had rails and handled meat and produce.
Hunts Point recieves truck loads every night of Meats, Seafood, Grocery, Fruits, Vegs etc.. basically everything consumed the next day in NYC's Butchers, Restraunts etc. While I dont claim Hunts supplies ALL of NYC's food, I will say from experience that there is a great deal of inbound deliveries to Hunts from all around the USA and in some cases overseas as well.
Butter in from Baltimore, Seafood from Boston, Meats from the West and Produce from all kinds of places. I think Lemons out of Yuma, Cabbage and other Produce from Nogales, California and elsewhere.
To GET to Hunts Point requires stopping at one of the truckstops an hour or so away.. Conneticut, New Jersey etc. And running in with hundreds of other trucks late in the afternoon and evening. By morning the outbounds empties start getting out of the city. The lucky ones get into Jersey or New England to reload before the rush hour.
Usually the GW (George Washington Bridge) recieves hundreds of trucks an hour on the upper deck plus more on the lower deck trying to get into Hunts from Jersey and I THINK it was the Throgs or White's that took traffic in from New England. Time has erased some details of my remembering.
Sometimes you take food products close to NYC and trans docked it to straight trucks that would go down into the city from Jersey or whatever to deliver the goods.
I have spent some years of my life working Hunts and feel fortunate that there has not been any real trouble there. This is just one Market (NOT your local family friendly produce or farmers market... dont mis understand me.) out of dozens around the USA all doing the work to feed the cities every night.
Let's not forget the Tropicana Train that comes up from Florida often to NJ. Nothing stops that train except for maybe Potus or other moves.
Did not know Americold had a facility in Salinas, Ca.
Last time I checked most of the shippers in Salinas were growers & coolers.
rgds ign
My apoligies for my rambling.
On shipping produce. I'm one of those truck drivers(OTR gang) who pulls a refridgerated(temperature controlled) trailer.
1. A lot of produce these days gets moved in Truck Load quantities(ie 40,000lb lots/ 20 pallet) The patterns I see is that it moves very quickly & is absolutely not subject to delay unless someone really wants a lot of trouble. Cargo has to be temperature checked continously & must keep moving.
A lot of this can move 500 miles a day but there is a lot that has to move faster(ie team freight) .
There is a huge variety of not only refridgerated freight but also stuff that is temperature sensitive. (protect from freezing, protect from excessive heat, keep 0 deg f or below. maintain a temperture of xx to xx Deg F).
Railroads are getting a little better at this. Most railroads when they rebuld or but a new refridgerated railcar they will put a Thermo King SB III unit or a Carrier Ultra. Both of these units were developed primarily for truck trailer use. (If you look inside older railcars you will see the units mounted in the area for mech. equipment with the roof section over this are cut away. the new railcars simply have the units mounted on the end of the car.s
If the railroads were smart, they would get into this business. I would not accept traditional rail rates, but would insist on getting the rates that they would get if they were a trucking company(this also means providing trucking company service).
The other comment I would make is that railroads would have to have multiple departures daily to get the best chance at this business. One of the comments I heard inside my company when I asked about why the co. did not use rail any more, was that they had real problems getting R/R to hold a train when the grower was running late. This was in spite of the fact that they were sending 20 containers or more a day.
When they saw that they would not make the daily dept, well on the road it went. On those days when they did not have enought trucks to cover the loads & R/R was unavailable someone ended up paying for the missed loads.(and it was not the railroad).
Not sure what else I can say.
Rgds IGN
narig02 wrote: My apoligies for my rambling. On shipping produce. I'm one of those truck drivers(OTR gang) who pulls a refridgerated(temperature controlled) trailer. 1. A lot of produce these days gets moved in Truck Load quantities(ie 40,000lb lots/ 20 pallet) The patterns I see is that it moves very quickly & is absolutely not subject to delay unless someone really wants a lot of trouble. Cargo has to be temperature checked continously & must keep moving. A lot of this can move 500 miles a day but there is a lot that has to move faster(ie team freight) . There is a huge variety of not only refridgerated freight but also stuff that is temperature sensitive. (protect from freezing, protect from excessive heat, keep 0 deg f or below. maintain a temperture of xx to xx Deg F). Railroads are getting a little better at this. Most railroads when they rebuld or but a new refridgerated railcar they will put a Thermo King SB III unit or a Carrier Ultra. Both of these units were developed primarily for truck trailer use. (If you look inside older railcars you will see the units mounted in the area for mech. equipment with the roof section over this are cut away. the new railcars simply have the units mounted on the end of the car.s If the railroads were smart, they would get into this business. I would not accept traditional rail rates, but would insist on getting the rates that they would get if they were a trucking company(this also means providing trucking company service). The other comment I would make is that railroads would have to have multiple departures daily to get the best chance at this business. One of the comments I heard inside my company when I asked about why the co. did not use rail any more, was that they had real problems getting R/R to hold a train when the grower was running late. This was in spite of the fact that they were sending 20 containers or more a day. When they saw that they would not make the daily dept, well on the road it went. On those days when they did not have enought trucks to cover the loads & R/R was unavailable someone ended up paying for the missed loads.(and it was not the railroad).Not sure what else I can say.Rgds IGN
Thanks IGN. And you certainly didn't ramble.
The current BNSF standard for premium intermodal is 750 miles per day so I'd say they were currently competitive for "a lot" of produce. The railroads are never going to win a race with team drivers, so if the freight is that hot, it's going to stay on the Interstate System. But, as you say, there is "a lot" available for 750 miles/day service.
Monitoring the temperatures is no longer a problem on the rail, satelites fixed that. Multiple departures shouldn't be a problem out of a place like California, but out of Dodge City (lots of beef) it could be.
Are you an o/o? If so, how would a railroad get you to use rail intermodal. It's getting to the point with fuel where the railroad could haul your tractor and your trailer on a flatcar, and you in a passenger rail car for less than it cost you to drive. (They'd charge you for the meals.)
As diesel fuel continues to climb the opportunity for rail to take over a lot of the California Produce Market to the midwest and east exists.
Salinas being captive to the UP should seriously consider trucks hauling the produce to a terminal such as Stockton where it can be placed on a BNSF train for Chicago or Kansas City or even points in Texas. If it is continuing east than the cars receive priority at whatever point they interchange with an eastern road. If trucker's haul it within a certain radius to destinations such as the way JB Hunt handles there trucks than much of the fuel crisis can be resolved for the truckers and bring down prices in the grocery store.
Many years ago I was in the trucking industry as an owner operator and after loading my trailer using a rental tractor while waiting for mine undergoing a major overhaul in eastern Canada for a trip to Vancouver I received the bad news that my tractor was not going to be ready in time for the trip. I contacted the railroad about transporting my trailer to Vancouver and within hours after loading it was on its way west. I used the same railroads airline five days later to fly out rent a truck and unload my trailer. I reloaded using the rental tractor back to Toronto and once again flew home to Toronto and waited for my trailer. By that time my tractor was waiting for me and I unloaded when it returned to Toronto. If the company I had worked for had spotted that trailer on the railcar I would have been terminated. There were no damages to any of the shipments and inspite of all of the expenses incurred I made more money on that trip than I would have had I driven all the way. And I got to spend more time with my family and that time was priceless. That was when I decided it was time for me to look at something else for a living. Oh and I might mention that the trailer arrived at both destinations still clean. If I had driven it I would have had to wash the rig at both ends another expense I did not have to incur.
Al - in - Stockton
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