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Is loose car railroading dead?

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Posted by henry6 on Saturday, December 8, 2012 8:41 PM

Murphy Siding

     henry-  Maybe it's that I live in a different part of the country.  Maybe it's because we are different ages.  My world isn't going to hell in a handbasket.  My glass is half full.  You have my sympathies.

The world went to hell in a handbasket, a supermarket cart, and a leveraged buyout years ago...I don't need your sympathies, but you by all means, need mine.  My wine glass if full and I drink to your hopeful future!.

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Posted by MidlandMike on Saturday, December 8, 2012 8:37 PM

Bucyrus

Murphy Siding

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

What kind of a dern fool thing is that to say?   An emotional decision?

If it is not an emotional decision, why are they so wishy-washy on whether or not they want the business?  If I get a project offer where I can’t make money, I don’t take it.  You have more or less said the same thing earlier when you disagreed with the approach the railroad takes in refusing business they apparently don’t want. 

So if their decision to discourage business by dropping hints is not emotional, what then motivates it?  Either the business makes money and they perform the job, or it does not make money and they get out of it.   

Or do they not know whether they make money or lose money on the small business because it is small, and therefore they cannot be sure they are making money on it?  

I don't know if they are taking so long to deliver your car because it's so low a priority that it is unimportant to them, or if they are trying to drop hints, but I doubt they will ever outright tell you they don't want your business.  If they did, some businessmen would go to their congressman, and then the congressman would think how ungrateful the RRs are after he gave them that infrastructure money, and he may start agitating for re-regulation.

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Posted by Anonymous on Saturday, December 8, 2012 8:22 PM

If I asked them, I would probably get an emotionally based answer to my question.  You brought up the quesion.  Why do you think they abuse the small customers to make them go away rather than just set the price where they make money?

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Posted by Murphy Siding on Saturday, December 8, 2012 8:01 PM

Bucyrus

Murphy Siding

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

What kind of a dern fool thing is that to say?   An emotional decision?

If it is not an emotional decision, why are they so wishy-washy on whether or not they want the business?  If I get a project offer where I can’t make money, I don’t take it.  You have more or less said the same thing earlier when you disagreed with the approach the railroad takes in refusing business they apparently don’t want. 

So if their decision to discourage business by dropping hints is not emotional, what then motivates it?  Either the business makes money and they perform the job, or it does not make money and they get out of it.   

Or do they not know whether they make money or lose money on the small business because it is small, and therefore they cannot be sure they are making money on it?  

  I guess you'd have to ask the BNSF.

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Posted by Murphy Siding on Saturday, December 8, 2012 8:00 PM

     henry-  Maybe it's that I live in a different part of the country.  Maybe it's because we are different ages.  My world isn't going to hell in a handbasket.  My glass is half full.  You have my sympathies.

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Posted by henry6 on Saturday, December 8, 2012 7:00 PM

Murphy...believe me it is an emotional decision.  One after the other.  Often shooting from the hip, anxious for the rewards, the sight of dollar signs reflecting from everything they see.   Natural gas drilling companies in PA finding people with hundreds of acres of unused property, near or under foreclosure on the mortgage or back taxes, leaping on these people sucking up the land use at $2 an acre and start drilling the next day without looking at the land or the water or the air.  Next thing you know the water is full of methane and water spigots on bathroom and kitchen sinks ignite and burn.  So quick to get the money they forgot to text the ground and the water...no are being accused of causing a problem...yeah...often land owners themselves didn't know it existed, or did but the money was too hot to pass up.

Another one, a president of a supermarket chain walks into a store early one Friday morning and doesn't like what he sees.  Calls the head offices 40 miles away and tells them the store is to be redone before Monday rolls around, updated, new everything.  It is done. Then the store is closed two months later because it was a loser anyway.  

And investors are like that when they want more return on investment than it is currently doing.  So they fire, cut back, change the methods, change the size, lessen the quality, but bring the cost down so they can earn a huge mark up that they want.  But the market balks in the loss of quality or bulk  or scarcity of the product and buy another brand.  Emotion runs high when one wants to make high mark ups and wide margins.

There is more emotion in the money aspect of most everything.  Have you ever heard of a pipefitter or house painter or factory laborer jumping from the 50th floor of their building?  But you have heard of bankers and stockbrokers doing it.  Yep, money decisions are emotional.

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Posted by Anonymous on Saturday, December 8, 2012 5:12 PM

Murphy Siding

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

What kind of a dern fool thing is that to say?   An emotional decision?

If it is not an emotional decision, why are they so wishy-washy on whether or not they want the business?  If I get a project offer where I can’t make money, I don’t take it.  You have more or less said the same thing earlier when you disagreed with the approach the railroad takes in refusing business they apparently don’t want. 

So if their decision to discourage business by dropping hints is not emotional, what then motivates it?  Either the business makes money and they perform the job, or it does not make money and they get out of it.   

Or do they not know whether they make money or lose money on the small business because it is small, and therefore they cannot be sure they are making money on it?  

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Posted by Murphy Siding on Saturday, December 8, 2012 4:53 PM

henry6

Emotional is the right word here, Zug.  Investors will look at a business with an accountant's eye and take off whatever does not come up to the wanted return on investment.  Haven't you heard me say they want 80% of $100 rather than 50% of $200.  Yeah, they won't spend the extra hundred to earn $20 more overall. because it brings the return down.  That's emotional not sound business thinking, especially when you get into a business that moves things for other people.  If you don't want to move things, then go open a pizza parlor.

henry6

Emotional is the right word here, Zug.  Investors will look at a business with an accountant's eye and take off whatever does not come up to the wanted return on investment.  Haven't you heard me say they want 80% of $100 rather than 50% of $200.  Yeah, they won't spend the extra hundred to earn $20 more overall. because it brings the return down.  That's emotional not sound business thinking, especially when you get into a business that moves things for other people.  If you don't want to move things, then go open a pizza parlor.



     It's a business,  not your Aunt Emma's favorite pet yorkie.  The business exists to make a profit for the owners, not to give them a warm, fuzzy feeling. Bang Head

 

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Posted by Murphy Siding on Saturday, December 8, 2012 4:48 PM

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   



     What kind of a dern fool thing is that to say?   An emotional decision?

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Posted by Anonymous on Saturday, December 8, 2012 3:20 PM

zugmann

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

Emotional?  You're joking, right?

Well it sure sounds emotional—i.e. nudging the customer away, dropping hints with crummy service, not really wanting the small business, better service for tipping the crews, etc.

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Posted by henry6 on Saturday, December 8, 2012 3:08 PM

Emotional is the right word here, Zug.  Investors will look at a business with an accountant's eye and take off whatever does not come up to the wanted return on investment.  Haven't you heard me say they want 80% of $100 rather than 50% of $200.  Yeah, they won't spend the extra hundred to earn $20 more overall. because it brings the return down.  That's emotional not sound business thinking, especially when you get into a business that moves things for other people.  If you don't want to move things, then go open a pizza parlor.

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Posted by zugmann on Saturday, December 8, 2012 2:57 PM

Bucyrus

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

Emotional?  You're joking, right?

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by BaltACD on Saturday, December 8, 2012 2:52 PM

I see CSX and NS containers and trailers on the road all the time in my area,

Don't forget the UPS bought Overnite from UP for their trucking option and bought Mail Boxes etc. to rebrand them as 'The UPS Store' to compete with FedEx in a tit for tat basis or did FedEx copy UPS.

 

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Posted by Phoebe Vet on Saturday, December 8, 2012 2:25 PM

I would love to see NS or CSX container trucks on our roads.  Of course the brands were totally chosen because they are the local RRs here.

Purchase the trucking companies the way FedEX turned Roadway into FedEX Ground and got retail outlets by buying Kinko's.

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Posted by Anonymous on Saturday, December 8, 2012 1:26 PM

Do railroads want out of the small customer business because they actually lose money on it, or is it more an emotional decision based on a liking of more lucrative business?   

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Posted by csxns on Saturday, December 8, 2012 12:46 PM

Phoebe Vet,not far from us up in Statesville is a good size Lumber reloads.

Russell

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Posted by Phoebe Vet on Saturday, December 8, 2012 11:16 AM

I promise you that a trucking company would be happy as a clam to deliver your lumber on a schedule that makes you happy.  Railroads need to stop thinking of trucks as competition and form some partnerships.  Rail is very good at moving large shipments long distances.  Trucks are very good at local deliveries to many locations.  After all, that's why containers were invented.

Dave

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Posted by blownout cylinder on Saturday, December 8, 2012 9:33 AM

Paul_D_North_Jr

Victrola1
[snipped - PDN] Lumber is not fine china. Containerize it.

Yep.  Thumbs Up  Use one of these instead (Hammar Lift USA - there are several other maufacturers worldwide): 

http://www.hammarlift.com/ 

They say in several places that it can be used for railcar-to-truck transfers, and I have no doubt of it - but I can't easily find a good photo of that actually happening (yet), other than this one:

http://www.hammar.eu/images/products/150/inaction/4.jpg

- Paul North. 

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Posted by BroadwayLion on Saturday, December 8, 2012 9:05 AM

According to the LION, rail will always be a big player in lumber movements.

But the movement is from the mills to regional wholesalers who will truck it to the retail outlets.

There is ONE (count them... ONE) Mobil oil dealer in North Dakota. He is a wholesaler with a retail outlet. He receives all of his product by truck from a distributor in Montana. If anything, THIS would be a good candidate for rail transport. He is right on the main track, indeed right on the rail yard in Dickinson. Shipments could be received at the convenience of the railroad.

Oh well, it is not my business!

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Posted by Murphy Siding on Saturday, December 8, 2012 8:17 AM

Victrola1

Throw momma and mop board off the train maybe a little much.

My expertise on rail lading of lumber is limited to watching the trains go by. Still, the old concept of LCL containers for one agent depots lingers.

Lumber cars remind of a silverware basket hung on the tray end of a dishwasher. Can you make a 2X4 tray to fit the well of a container car? Post and lintel a stationary  frame over the track to meet clearance. Lift and pull to the side. Wave to the rail crew as they depart.

Better yet, put the 2X4 tray on a truck. Abandon the branch line.

      There's no doubt, that all our lumber will be on trucks in the near future.  The unreliable timeframe of railroad shipment is killing us.

      However, there is an interseting backstory to this.  The rail spur, and the lumberyard are only 4 years old.  We've probably received about a dozen cars total on it.  The owner of the company, my boss, made the decision to put in the rail spur.  Had he asked me,  I would have said it was not a good investment, as we'd never save enough freight to cover the investment.  He didn't ask me.  He asked the BNSF what they thought of the idea.  ' Turns out, they thought it was a great idea!  In fact, they've used our spur more times as a parking spot than we have.

     I guess the reason we got a rail spur, was that the old yard had a rail siding- that hadn't been used in 30 years.  In the last 124 years the company has been around, railroads have play a huge role.  The silver lining, is that the spur is surrounded by industrial land.  Someday, the piece of real estate with the rail access will be worth major bucks to someone else, and we'll just move up the road a couple of blocks.

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Posted by Paul_D_North_Jr on Saturday, December 8, 2012 7:15 AM

Victrola1
[snipped - PDN] Lumber is not fine china. Containerize it.

Yep.  Thumbs Up  Use one of these instead (Hammar Lift USA - there are several other maufacturers worldwide): 

http://www.hammarlift.com/ 

They say in several places that it can be used for railcar-to-truck transfers, and I have no doubt of it - but I can't easily find a good photo of that actually happening (yet), other than this one:

http://www.hammar.eu/images/products/150/inaction/4.jpg

- Paul North. 

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by Phoebe Vet on Saturday, December 8, 2012 5:45 AM

Remember when IBM, the maker of the largest computer systems on the planet, made a conscious decision to ignore the "small computers" that were being used by individuals and small businesses and concentrate on the giant high profit machines?  How did that work out for them in the long run?

Dave

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Posted by Victrola1 on Friday, December 7, 2012 10:05 PM

Throw momma and mop board off the train maybe a little much.

My expertise on rail lading of lumber is limited to watching the trains go by. Still, the old concept of LCL containers for one agent depots lingers.

Lumber cars remind of a silverware basket hung on the tray end of a dishwasher. Can you make a 2X4 tray to fit the well of a container car? Post and lintel a stationary  frame over the track to meet clearance. Lift and pull to the side. Wave to the rail crew as they depart.

Better yet, put the 2X4 tray on a truck. Abandon the branch line.

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Posted by Murphy Siding on Friday, December 7, 2012 9:16 PM

Victrola1

Lumber is not fine china. Containerize it.

Convert old flat cars to handle a container, with a twist. Install a greased, sideways ejection rail with an  explosive charge on the flat car. There is no need for a siding. All you need is an area along the tracks that is preferably ditched to keep the container from rolling too far.

The rail crew makes a cell call about an hour away. The consignee's crane is nearby out of harm's way and ready to move. Shoot the container off the flat car. The consignee picks it up

To return the empty container, hose the dirt and grass off the outside. Remove any match sticks from the inside. The consignee is informed what day the local will be back. Call an hour away so the consignee's crane can reset the empty on the flat car.

No expensive switches are necessary. No siding is necessary. Rural secondary mains and branch lines reduce costs and gain customers.

  Laugh  The best part is,  I read 3/4 of your post, before it dawned on me that you might not be serious. 

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Posted by Victrola1 on Friday, December 7, 2012 8:41 PM

Lumber is not fine china. Containerize it.

Convert old flat cars to handle a container, with a twist. Install a greased, sideways ejection rail with an  explosive charge on the flat car. There is no need for a siding. All you need is an area along the tracks that is preferably ditched to keep the container from rolling too far.

The rail crew makes a cell call about an hour away. The consignee's crane is nearby out of harm's way and ready to move. Shoot the container off the flat car. The consignee picks it up

To return the empty container, hose the dirt and grass off the outside. Remove any match sticks from the inside. The consignee is informed what day the local will be back. Call an hour away so the consignee's crane can reset the empty on the flat car.

No expensive switches are necessary. No siding is necessary. Rural secondary mains and branch lines reduce costs and gain customers.

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Posted by edblysard on Friday, December 7, 2012 8:36 PM

Sound idea, but the rub would be the contract company would have to have employees that are “qualified” under the FRA rules, GCOR or Norac, and NS or whichever Class 1 safety rules and timetable operations, because they would have to use the same main lines.

There is only so much track to use.

Which brings you back to the problem of the contract switcher being in the way of the high dollar traffic, same problem as before.

Either way, crewed by a contract company or the Class 1, you still have the track and time issue which prevents the Class 1 from switching Murphy’s company.

Unless the contract company can afford to build sidings near each of the loose car companies so they can tuck in out of the way, the unit train volume traffic will still get priority dispatching, and your back to square one.

Now, if they can figure out a time window where the major traffic is slight, they could get out there and back, most likely at a slightly less cost, but…you’re talking a pretty big dollar investment, would the return justify the expense?

But hey, at least you’re coming with ideas and trying to find solutions, beats what most folks do.

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Posted by henry6 on Friday, December 7, 2012 8:03 PM

No, I know there are terminal and switching roads...usually owned jointly by Class 1's.  But I envision a company which will contract with a class 1 or whoever, to offer the service in markets or cities when the cost the to class 1 is out of line.  Take NS, for instance.  Instead of providing a local switcher and crew in ten different small city or small market locations they instead hire the switching company to provided the locomotive(s), crew(s), and supervisory support, all NS would do is drop the cars off in town; NS would still dispatch and do the paperwork.   Seems to me there'd be a new business opportunity of some kind.

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Posted by edblysard on Friday, December 7, 2012 7:48 PM

Henry,

No need to wait….(unabashed plug for my railroad here) ….

http://www.ptra.com/

Three current member lines, UP, BNSF and KCS.

Average of 500,000. Cars handled yearly.

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Posted by jeffhergert on Friday, December 7, 2012 5:47 PM

Boone, IA is the headquarters for the Fareway Grocery chain, and they have large distribution center here.  They used to receive by rail until late in the CNW era.  I don't know, but imagine the volume dwindled over the years.  (I didn't live in the area at that time.)  It reached the point where the CNW wasn't interested in handling it anymore, even though Boone had, and still has, a daily switch engine assigned. 

The way they convinced Fareway to quit rail was not to allow the switch engine time on the main track to service them.  Guys working at the time said they had cars sit in the yard for close to a week, but they wouldn't let the switch engine out.  Fareway took the hint and went to all truck delivery.  Fareway within the last year did some remodling and added  to their facility, which took out the last part of the building that still had the rail receiving dock. 

There are a couple of industries that still use rail off and on in Boone.  These are located on a remnant of the old Ft Dodge line.  Up until a few years ago, the UP still did the switching.  That trackage has been transfered to the Boone & Scenic Valley (the line goes by the county fairgrounds, which is what the B&SV wanted to be able to access.) who now does the switching.  There were a few UP employees who were upset by this, mainly those that worked the yard engine itself.  (Many times when the let the yard engine across the main to service the industries, they wouldn't let them back across.  That would either lead to overtime or maybe an early quit, with the yard engine tied up on the other side.)  I welcomed it myself, figuring if the UP kept it they would eventually "dry up" the remaining business.  That could mean loss of the last yard engine trick, meaning less work for TE&Y people.

Boone still originates a 5 day a week, turn-around local.   (Way freight for the CNW faithful.)  The local officers try to take care of the customers on this local.  They realize, as do most of us, that jobs are at stake for our terminal.  This sentiment hasn't always been shared higher up in the organization, where interest is more along the lines of unit and intermodal type trains.  At least that's the way it was when we were heavy with traffic, maybe their outlook has changed the last couple of years.

Probably not.  I've always felt that they want the cream off the top, but don't want to milk the cow to get it. 

Jeff           

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Posted by PNWRMNM on Friday, December 7, 2012 4:51 PM

Henry,

What is a "terminal charge"? Please provide an example. Switching charges are exclusively for some respot type of service or for Storage In Transit service as down in Ed's country. Routine pulling and spotting are included in the rate.

You will not see some super switching entity set up to deal with carload custormers in Class One territory. The whole shortline thing of the past 20 years or so was driven by a cheap labor/union busting strategy.  That has largely run its course. Class One carriers have local crews down to three men vs. five decades ago. What it makes sense to spin off has been spun off. The frequency of such deals is way, way down.

Pulling and sportting, and terminal and intermediate switching are simply part of the carload business. Always has been always will be, by definition. Since deregulation a lot of costs have been squeezed out of the carload business and the carriers have effective rate freedom. I am confident the rates are compensatory. If a particular rate was not compensatory as of 1980 you can be sure it has been either cancelled or raised.

Mac

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