Slotracer,
As a layman I'm sure glad you decided to give the simple view of the situation. It does read as if you are saying the people who operate our freight railroads are not really totally incompetent. They do known what they are doing.
John
Outstanding, slotracer.
Lots of speculation on both sides of viewpoints, I'll try to provide some facts on the current state of the business, coming from someone who is now and has been in the rail/logisitcs business for 20 years (7 with UP marketing and 13 with a major shipper receiver with dozens of plants.)
The rails got smart and aligned their business model to serve types of business they were best equipped to do.....bulk, long haul shipments. Lines and lanes were abandonned while others were upgraded, the merger process, strategic planning of terminals and building service plans around volumes of business in their lanes. A focused strategy on reducing cost and handling business that makes economic return for them. Manifest is still part of that picture but intermodal, unit grain coal and automotive have been planned and serviced to provide the railroad a return for their assetts and capacity while trying to please customer needs. The unit grain train may run at a lower margin but efficienies and cost have been rung out and the train is meant to keep running cycles and ringing the cash register. Intermodal is similar as they have consolidated into large terminals that they have squeezed about every dollar of cost out and build their schedules around that. If they didn't, direct over the road truck would beat them on a cost and service basis far more than they do. Facts of life is that not all traffic fits this efficiency model, they gear up to handle the JB hunts, UPS and Schnieders of the world, thousands of onesey twosey intermodal shipments would play havoc on lane and train capacity, position of assets (Intermodal cars and trailers) and managing efficient fluidity in the terminals. Also, since rates on intermodal are highly competitive vs truck margins are limited and service requirements are at a premium level, thus terminal capacity, assett availability and service lane performance is closely planned and stringently managed to maintain good business retention (happy customers) and viable economics (acceptable return on investment for the railroad.) There are monetary penalties for service failures in contracts with the major 3pl's of the world so service networks and lanes are designed around intermodal performance.
It is far more complicated but what I described gives a brief view of the reality that drives the railroads business model on intermodal. This may not jive with some folks loyalty to railroads and refusal to understand railroad business realities but this is the playing field like it or not.
Now Specifics.....
Boxcar...Railroads have been killing the boxcar business for the past decade for the most part. We used to ship some oubound box business but rail rates trippled and quadruppled, boxcars became less available and when comparing the yield of a 53 ft van vs a 60ft plate f boxcar we were lucky if we could get a 2 to 1 ratio, the sky high boxcar rates made unit cost shipment unfavorable to intermodal and most truck lanes. Add to the slow transit times and high transit time variablity and higher susceptibility boxcars are to damage for lading, the probability of someone shipping boxcars is getting smaller and smaller.
Truck or Intermodal on the lane specified in this thread.....The origin cited is basically the Duluth area. I just checked this with one of our folks who has been on outbound logisitcs for 20 years, we ship hundreds of millions a year in outbound freight and have favorable contract rates and excellent experience in truck and intermodal lanes....here are the facts on this move....
We could move this over the road for about 3 grand a truckload including current fuel surcharges, transit time is 2 and a half days considering hours of service laws, delivery, roughly, plus or minus 2 hours most of the time.
Intemodal we cannot even obtain a rate, they don't want to bother to quote and if they did, would be well over 4 grand. The REALITY (not what railbuffs wish the situation was to suit some fantasy) is there is essentially no intermodal ramp at St Paul, surpisingly none at Houston Either. Long Dray from the Duluth area would have to go to ramp at Chicago. On the Southern End, deramp would occur at Ft Worth and Dray to Houston. These costs are what kills intermodal on this lane. Service figure AT BEST 2 days from pickup to loading on a trailer, 2 more days best case on the rails and deramp and deliver on the Southern end, 1 day AT BEST. Realistically you are looking at 6 and maybe 7 day door to door service intermodal at over 4 grand a load vs 3 day servie at worst at 3 grand for the over the road option.
We can all dream and what if and brush aside reality if it doesn't suit our desires of what we would like things to be, but others in charge of running business based on economics and reality are teh ones making the decisions, thus, the original question on this move going truck OTR does so for very solid reasons for which Intermodal cannot hold a candle.
schlimm The 4R Act was passed 37 years ago; the Staggers Act 33 years ago. So much has happened in the world and in commerce and technology, yet on here one would think the evil old ICC was abolished just recently.
The 4R Act was passed 37 years ago; the Staggers Act 33 years ago. So much has happened in the world and in commerce and technology, yet on here one would think the evil old ICC was abolished just recently.
The 'Decision Makers' that held the power condinued in the business for many years past the enactement of 4R and Staggers - they only knew the ICC way - and it shaped all their thought processes. It has only been during the past 15 years or so that the 'Decision Makers' are those that have no idea what the ICC was or how it restricted the rail industry and they were raised on Marketing as it is practiced in the 21st Century.
Never too old to have a happy childhood!
That's true, its been a generation now since Staggers and the 4R came to pass, and we now, more than ever, live in a dog eat dog survival of the fittest world. Shippers no longer value niche carriers who specialize in a mode or a couple of lanes or regions. More and more they want carrier suppliers who can offer a whole gamut of services from trucking to rail, marine, and air to worldwide services, hence the proliferation of middlemen freight brokers over the years. These folks do what the asset based guys can't or won't do...they will go into a shipper and offer to do everything...just get the freight ready for shipping and they'll take it from there. That makes it tough for a carrier to go in and say "we're good at New Jersey to Texas moves, do you have any of those?" Shippers don't want that unless the specialty carrier severely discounts his price. That's probably been the biggest shift over the last five years. The other big shift in recent years is that few shippers/receivers carry inventory any longer. Everyone wants time definite delivery now, where five years ago first come first serve within an eight hour window was ok.
Too many Americans live in the past, never passed history, don't understand the present and can't thinkg of the future in any terms.
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greyhounds [ I'm going to disagree here. The first step is certainly not defining the product or service you are trying to make money with. The first step certainly is identifying the product or service that a group of customers (market segment) needs. Then you determine if you can develop a product or service that meets that need at a profit. Don't do it backwards. Fit the service to the need. It's true that the railroads did do some marketing under regulation. There is not an enterprise in the world that doesn't do some type of marketing. We're fortunate in this geographic area to have a lot of side of the road vegetable stands in the summer. They do some marketing. They put a sign up that says something like: "Fresh Tomatoes and Sweet Corn". That sign is marketing their produce. Under the misguided, counterproductive, government economic regulation we did do some marketing in railroading. We had printed handouts to distribute, bought some advertisements, our salesmen took customers to lunch, and to golf at country clubs. We bought season tickets for sports teams and gave them to customers. (Four seats behind the St. Louis Cardinal dugout that had been the GM&O's since the 1940s. When no customer wanted the tickets, they went to employees such as yard clerks.) But you could not identify, quantify, and design a service/equipment/price package to meet the needs of a market segment. Then implement it. The government wouldn't allow it. And the freight went elsewhere for movement. I was there.
[
I'm going to disagree here.
The first step is certainly not defining the product or service you are trying to make money with. The first step certainly is identifying the product or service that a group of customers (market segment) needs. Then you determine if you can develop a product or service that meets that need at a profit. Don't do it backwards. Fit the service to the need.
It's true that the railroads did do some marketing under regulation. There is not an enterprise in the world that doesn't do some type of marketing. We're fortunate in this geographic area to have a lot of side of the road vegetable stands in the summer. They do some marketing. They put a sign up that says something like: "Fresh Tomatoes and Sweet Corn". That sign is marketing their produce.
Under the misguided, counterproductive, government economic regulation we did do some marketing in railroading. We had printed handouts to distribute, bought some advertisements, our salesmen took customers to lunch, and to golf at country clubs. We bought season tickets for sports teams and gave them to customers. (Four seats behind the St. Louis Cardinal dugout that had been the GM&O's since the 1940s. When no customer wanted the tickets, they went to employees such as yard clerks.)
But you could not identify, quantify, and design a service/equipment/price package to meet the needs of a market segment. Then implement it. The government wouldn't allow it. And the freight went elsewhere for movement.
I was there.
Under the Interstate Commerce Commission and pertaining to railroads, You are right, Greyhounds. But "marketing", as I said, is a very broad, often misused and understood term. You can define a market then invent and produce a product or you can have a product and then produce a market. I remember an old Bob and Ray radio skit with a reporter out on the street finding nothing despite aind ignoring screams, shots, sirens, and crowd noises while interviewing a Cape Cod'er about uses of cranberries, suggesting to the Cod'er he might make a juice and sell the juice to the public. In railroading marketing can begin when a customer comes to them with a product to move and the railroad has to come up with a plan competing with trucks or another railroad. OR the railroad can sit at the end of a move with 100's of empty cars and seek a way to fill those cars going back the other way. Marketing is creating money more than anything else.
Yes, hypocrisy knows no bounds. Our corporations are really just a reflection of our society's values. We want top pay, security, and lots of time off for ourselves but are all too happy to buy stuff from third world countries where workers have to put up with slave wages and horrible working conditions. Someone who makes $50.00 an hour here and complains about it buys a shirt from someone who is happy to get that in a month. The large corporations are really just us after all... the execs are here and the shareholders are here for the most part...We're a society of selfies.. if innovation doesn't work then bend over someone poor in Asia to cut cost and look the other way.
CSSHEGEWISCH You make regulation sound like it arose out of nowhere to hogtie the market. Regulation is very much a political creation and, at least in the railroads' case, came out of a public demand for it since they felt that the railroads were abusing their economic power. This attitude toward railroads has never quite faded away and continues to turn up in attempts at re-regulation.
You make regulation sound like it arose out of nowhere to hogtie the market. Regulation is very much a political creation and, at least in the railroads' case, came out of a public demand for it since they felt that the railroads were abusing their economic power. This attitude toward railroads has never quite faded away and continues to turn up in attempts at re-regulation.
What I find hilarious in the re-regulation attempts are that those organizations that are pushing for it 'because the railroads have a monopoly' are the same organizations that have a monopoly in their product areas over their customers. What they are really upset about is that they have to negotiate with the railroads as equals - not flunkies just too happy to do their bidding.
henry6 Marketing is a broad term and can be interpreted in so many ways. Railroads say it wasn't until the end of the ICC before they could market when in fact they were marketing right along in some form or another. Marketing includes several steps, the first being to recognize and define the product or service you are trying to make money with. That is followed by research and design so that you know who will buy what, why they will and what they will pay. You then design the product and the cost structure(s) and compare to what your research has told you. After all comes together...the research, the design, the equipment and personnel needs, then you advertise it and send you sales force out. Too many go out to sell before they know either what they have to sell, how much it will cost to do the job, and what the customer will pay if service or product is offered. I see many in business who have a product with a price tag so they can make money without understanding who will buy and at what price. Retailers always get me when I ask to define their clientele and they say everybody when in fact it is either an adult or child or senior item and nobody beyond the neighborhood or within a five mile radius at most is going to come to their location because it is not that unique nor cheap enough to bring customers. Restaurants often miss this point. Marketing isn't just a word or a term with a single definition but broad and contingent on many factors. Do railroads do it? Yes. Do they do it enough? Sometimes. Sometimes they miss the opportunity or ignore it in order to follow what appear to be more lucrative pursuits.
Marketing is a broad term and can be interpreted in so many ways. Railroads say it wasn't until the end of the ICC before they could market when in fact they were marketing right along in some form or another. Marketing includes several steps, the first being to recognize and define the product or service you are trying to make money with. That is followed by research and design so that you know who will buy what, why they will and what they will pay. You then design the product and the cost structure(s) and compare to what your research has told you. After all comes together...the research, the design, the equipment and personnel needs, then you advertise it and send you sales force out. Too many go out to sell before they know either what they have to sell, how much it will cost to do the job, and what the customer will pay if service or product is offered. I see many in business who have a product with a price tag so they can make money without understanding who will buy and at what price. Retailers always get me when I ask to define their clientele and they say everybody when in fact it is either an adult or child or senior item and nobody beyond the neighborhood or within a five mile radius at most is going to come to their location because it is not that unique nor cheap enough to bring customers. Restaurants often miss this point. Marketing isn't just a word or a term with a single definition but broad and contingent on many factors. Do railroads do it? Yes. Do they do it enough? Sometimes. Sometimes they miss the opportunity or ignore it in order to follow what appear to be more lucrative pursuits.
greyhounds...I remain convinced that more railroad resources need to go in to marketing, especially market research and development.
+1
If you don't want to wither and die, you need to ask: "What else should I be doing?" and "What should I do next?"
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
.
PNWRMNM Ken, You are 100% right in this analysis. It is also true that the carriers have so decimated their field marketing forces that they have made themselves deaf, dumb, and blind to all potential customers smaller than the Fortune 500. It has been that way for so long that today's management probably does not even realize it, in the same way the fish does not know it is swiming in water. I just is. However, the carriers have plenty of traffic, so much that they are actually investing to expand capacity, something that did not happen in the 1960's, 70's, and 80's except for Powder River Basin coal. Given the capacity constraints, how much sense does it make to hire guys who will cost about $150,000 per year per head to go shake the bushes? I think some, a few, aimed at selected target markets. You and I agree that perishables are a good target market. There may be others, but I do not know what they are. This is back to your risk question. How does the Marketing VP sell the President on the notion of making a high risk investment to gain new traffic when they are running hard to keep up with what the big boys are bringing every day? Mac
Ken,
You are 100% right in this analysis.
It is also true that the carriers have so decimated their field marketing forces that they have made themselves deaf, dumb, and blind to all potential customers smaller than the Fortune 500. It has been that way for so long that today's management probably does not even realize it, in the same way the fish does not know it is swiming in water. I just is.
However, the carriers have plenty of traffic, so much that they are actually investing to expand capacity, something that did not happen in the 1960's, 70's, and 80's except for Powder River Basin coal. Given the capacity constraints, how much sense does it make to hire guys who will cost about $150,000 per year per head to go shake the bushes?
I think some, a few, aimed at selected target markets. You and I agree that perishables are a good target market. There may be others, but I do not know what they are. This is back to your risk question. How does the Marketing VP sell the President on the notion of making a high risk investment to gain new traffic when they are running hard to keep up with what the big boys are bringing every day?
Mac
Mac, you make a good point.
I'm reading that the BNSF is in a near melt down on the old GN line. Their operating foks are likely justifiably screaming for more people, power and track capacity. It would be hard to put scarce resources into marketing while they're needed so badly elsewhere.
But beyond the crisis, I remain convinced that more railroad resources need to go in to marketing, especially market research and development.
Anyone know how that UP box-car train is doing? Is it still running?
daveklepper But, as already posted, it is not all black . There is some grey and white. The investment in Powder River was made, NS did go into Triple Crown, KCS into Mexico, and even CSX. the least involved in marketing (along with CP), has invested in new intermodal centers. Possibly once the capacity hurdle is overcome, we can expect to see more marketing efforts. I expect BNSF to move up to be at least equal to NS, and both they and UP to then go after west coast perishables. Isn't UP running a west coast north-souh bring-it-to-us and we will carry it small-shipper scheduled box-car train?
But, as already posted, it is not all black . There is some grey and white. The investment in Powder River was made, NS did go into Triple Crown, KCS into Mexico, and even CSX. the least involved in marketing (along with CP), has invested in new intermodal centers. Possibly once the capacity hurdle is overcome, we can expect to see more marketing efforts. I expect BNSF to move up to be at least equal to NS, and both they and UP to then go after west coast perishables. Isn't UP running a west coast north-souh bring-it-to-us and we will carry it small-shipper scheduled box-car train?
greyhounds I'd like to commend everyone on this thread (well, almost everyone) for conducting an interesting, informed, generally very civil discussion. But before blaming anyone, think of the railroad culture. As I said, railroads tend to be dominated by their operating departments. Marketing generally plays a subordinate role. In railroad operations there is no room for failure, the acceptance of risk, or innovation. The rule book is written in blood. A senior manager who has spent 30 years working his/her way up through the operating department has learned to avoid risk at all costs. Taking a risk would mean risking a life. Marketing, on the other hand, is all about taking risks. Prudent risks to be sure. But what you're risking is money, not lives. You don't need a spotless record, just a winning record. If, over time, you bring in increasing amounts of income you've won. And had no injuries or deaths as a result. Think of the inevitable conflict between the operating VP and the marketing VP. The marketing VP says: "This is probably going to work. It will take three years of development. But we'll come out well ahead." The operating VP hears the word "Probably" and gets very skeptical. He/she literally lives in a world of "Sure", not "Probably". So it's not that the operating folks don't want to change. It's that they're conditioned and acculturated to avoiding any and all risks. But successful marketing is all about taking prudent, knowledgeable, informed, analyzed risks. And therein lies the problem.
I'd like to commend everyone on this thread (well, almost everyone) for conducting an interesting, informed, generally very civil discussion.
But before blaming anyone, think of the railroad culture. As I said, railroads tend to be dominated by their operating departments. Marketing generally plays a subordinate role. In railroad operations there is no room for failure, the acceptance of risk, or innovation. The rule book is written in blood. A senior manager who has spent 30 years working his/her way up through the operating department has learned to avoid risk at all costs. Taking a risk would mean risking a life.
Marketing, on the other hand, is all about taking risks. Prudent risks to be sure. But what you're risking is money, not lives. You don't need a spotless record, just a winning record. If, over time, you bring in increasing amounts of income you've won. And had no injuries or deaths as a result.
Think of the inevitable conflict between the operating VP and the marketing VP. The marketing VP says: "This is probably going to work. It will take three years of development. But we'll come out well ahead."
The operating VP hears the word "Probably" and gets very skeptical. He/she literally lives in a world of "Sure", not "Probably". So it's not that the operating folks don't want to change. It's that they're conditioned and acculturated to avoiding any and all risks. But successful marketing is all about taking prudent, knowledgeable, informed, analyzed risks.
And therein lies the problem.
A generalization with a lot of truth in it - although the ice has melted a good bit over the past couple decades. "Service Design" is no longer an oxymoron.
aricat First of all, you will need to get from Cloquet to Superior on BNSF and get out of Superior. The over the road trucker by now is well down I-35 to Des Moines. By the time you get the box car out of Superior who will get the car ? Will BNSF hand off this to UP ? I tend to doubt it. The trucker will be in Kansas City before the boxcar is out of Northtown. The trucker will be in Dallas before the boxcar makes it to Chicago or Galesburg, The trucker will make the dock in Pearland Texas long before the UP or BNSF get it to Kansas City. The trucker will sleep in rest stops and eat in truck stops. This is a cargo that is the domain of the over the road trucker. The big question is can BNSF get the over the road trucker off I-35 and get both him and his load on to the railroad for part of the trip, AND have both the over the road trucker and the railroad make money.Interstate 35 between Minneapolis and Kansas City is jammed with trucks; so is virtually every other interstate highway. There is money to be made and are the railroads smart enough to make it.
First of all, you will need to get from Cloquet to Superior on BNSF and get out of Superior. The over the road trucker by now is well down I-35 to Des Moines. By the time you get the box car out of Superior who will get the car ? Will BNSF hand off this to UP ? I tend to doubt it. The trucker will be in Kansas City before the boxcar is out of Northtown. The trucker will be in Dallas before the boxcar makes it to Chicago or Galesburg, The trucker will make the dock in Pearland Texas long before the UP or BNSF get it to Kansas City. The trucker will sleep in rest stops and eat in truck stops. This is a cargo that is the domain of the over the road trucker. The big question is can BNSF get the over the road trucker off I-35 and get both him and his load on to the railroad for part of the trip, AND have both the over the road trucker and the railroad make money.Interstate 35 between Minneapolis and Kansas City is jammed with trucks; so is virtually every other interstate highway. There is money to be made and are the railroads smart enough to make it.
The idea of hauling the tractor along with the trailer is something that has caught on in Europe, largely to get around bottlenecks caused by mountain passes and tunnels.
But make no mistake, in the countries where this is standard practice it has a lot more to do with government policy than anything else...
In the US, there really is no economic case for loading the 10+ ton truck tractors with the trailers "circus style" onto flatcars. The tare weight (i.e weight of the equipment versus weight of the revenue bearing cargo load) is way too high and the trucking company would be much better served having the first truck drop the trailer (or better yet container) at an intermodal ramp and having a second tractor and driver hook up at the end of the rail movement.
The only way I could see the "truck ferry" concept catching on in the US is if the Federal/State Government(s) mandate it and I doubt either the trucking or railroad industries would welcome that....
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
Johnny
Lake Jeff, after reading your post and all of the others, all I can come up with is that the people at the top of the companies are doing just fine. They get salary increases, bonus's, and have all the money they need. So why bother to rock the boat. More business will not make any difference to them, and if need be the people at the top can just fire more of the middle management and middle workers to keep the profits up and money flowing. If a few more workers are needed, then they will be hired on a as needed basis. This is the way it has been going with many companies over the last 15 years and works for the bottom line and upper managements wallets.And if the company is a corporation with public stock, then they must satisfy the stock analyst predictions of more profit every quarter. I have tried to come to other conclusions over the years, but have not been able to do so. If any one feels that I am completely wrong, then please give a rebuttal that explains way it really is.
Jeff, after reading your post and all of the others, all I can come up with is that the people at the top of the companies are doing just fine. They get salary increases, bonus's, and have all the money they need.
So why bother to rock the boat. More business will not make any difference to them, and if need be the people at the top can just fire more of the middle management and middle workers to keep the profits up and money flowing.
If a few more workers are needed, then they will be hired on a as needed basis. This is the way it has been going with many companies over the last 15 years and works for the bottom line and upper managements wallets.And if the company is a corporation with public stock, then they must satisfy the stock analyst predictions of more profit every quarter.
I have tried to come to other conclusions over the years, but have not been able to do so. If any one feels that I am completely wrong, then please give a rebuttal that explains way it really is.
Status Quo acceptance and apathy. Getting the old pension next week or next year and i can't wait, so let one of the younger guys tackle the new, I'm gonna be gone soon. It the way we've always done it, so who am I to change things? Those are the things I've seen happen in so many things over the years so nothing new is tried, there is no real progress, the whole contraption is falling apart. Until the old blood goes and new blood takes over...sometimes having to reinvent the wheel to make it happen because the guys who left took the keys to the car with them. I think union rules could have been change 50 or 60 years ago, for instance, except that those in power were ready to pull the pin...both in the union and in the executive suite so there was giving in on minor things so that the boat floated on in serene waters. Until both sides were gone and the newbies were left in charge. And they had to learn fast or try anything new so that something wrong didn't happen. I think we are there again today.
Ken G Price My N-Scale Layout
Digitrax Super Empire Builder Radio System. South Valley Texas Railroad. SVTRR
N-Scale out west. 1996-1998 or so! UP, SP, Missouri Pacific, C&NW.
John, I these are some of the reasons I think they don't go after some of that business.
They are happy with what they have now. Just about every quarter since the economic down turn began it seems my company has been able to report good financial performance, if not record profits, even with less car loadings. While my area is slower than it used to be, other parts of the company are busy. Coal is down, and that's what has affected us the most. Frac sand is booming. From the reports given us by the company, a unit train of sand is worth the profit of three unit coal trains. (FWIW, The claim has been made that the first 5 or 6 cars of a sand train pays for all the costs of the train; fuel, crews, equipment, etc.) Since they are making up the difference plus, no real incentive to grow business elsewhere. But that frac sand boom might not last in it's current form. It might not go away, but what if the volumes drop or they aren't able to charge as much?
They might have to work more to get business. I understand it doesn't make sense to add another job to service an industry 10 or 20 miles out for just one or two cars. What I don't understand is where they already have yard or local jobs they don't try to get business at those locations. It seems like they would rather dry up that work and cut off the jobs. They had an opportunity some time back to add a customer where they have a yard engine or local that could've serviced them. The railroad wasn't interested. Sometimes I think it doesn't matter where the fruit is hanging, they just want some one else to do the picking for them.
Large volume/train mentality. On our grain lines, a large grain processor wanted to run shuttle trains from certain loading points to a centrally located plant. Trouble was the train size they wanted was 50 cars. My company still does 75 car grain trains, but they would rather have 100 or 110 car trains. The company wasn't interested. This ag company has in the past, and may still, own/lease some of their own cars. I've wondered if they would've supplied their own cars? If so, then I really don't understand them turning it down. Even if the railroad provided the cars, I'm sure any rate would be one that they would make money on, but maybe not as much as a car of sand.
During the economic slow down, we've had at times quite a few people cut off or working a retention/training board. Most have been recalled, but some cuts have happened again. (They even have a new hire class going on. Why, no one really knows. They will probably graduate to the cut off board.) I know they couldn't have replaced all of the business (although some has been lost to other carriers because of service issues and/or down right arrogance towards customers) but in contrast the Iowa Interstate during the same time didn't furlough anyone. They actually hired off and on because they were able to add business, possibly some of it at our expense. Like others have observed, smaller railroads are more customer friendly. Still. is there any real reason the larger ones can't be? Especially when it comes to intermodal which is where the larger ones claim that's where the growth is supposed to be.
Jeff
Ulrich Speaking of fruit, there's still a lot of low hanging fruit available. But it requires a change in mindset in order to grab it. Right around Staggers or shortly before, railroads were diversifying into other businesses, most importantly, into trucking and other modes. Since then we've come full circle, the railroads once again see themselves as railroads when perhaps they should be marketing themselves as diversified transportation conglomerates. A transportation company with a significant stake in both rail and trucking would be much stronger and more flexible than a stand alone trucking co. or railroad. Imagine a combination like CSX and Swift Transportation...wow.. that would be a force to be reckoned with. We go from trying to stick a square peg in a round hole (i.e. trying to make intermodal as flexible as trucking) to offering customers a wide range of services, from cost effective intermodal to truckload team driver service on the other end. No longer would we be wasting energy in trying to make one mode as effective as the other, we would instead be using each mode as effectively as possible. A railroad trucking combination would also allow the transportation provider to move freight off the highways and on to rail in response to construction, traffic, or a driver shortfall. And conversely, freight could be moved off of rail in the event of a rail bottleneck, strike, shutdown etc. You would also have all kinds of career opportunities open up for people on both sides of the biz. A locomotive engineer might for example buy a couple of trucks to run on the side. A truck driver might decide that life as a switchman or conductor would be more suitable.
Speaking of fruit, there's still a lot of low hanging fruit available. But it requires a change in mindset in order to grab it. Right around Staggers or shortly before, railroads were diversifying into other businesses, most importantly, into trucking and other modes. Since then we've come full circle, the railroads once again see themselves as railroads when perhaps they should be marketing themselves as diversified transportation conglomerates. A transportation company with a significant stake in both rail and trucking would be much stronger and more flexible than a stand alone trucking co. or railroad. Imagine a combination like CSX and Swift Transportation...wow.. that would be a force to be reckoned with. We go from trying to stick a square peg in a round hole (i.e. trying to make intermodal as flexible as trucking) to offering customers a wide range of services, from cost effective intermodal to truckload team driver service on the other end. No longer would we be wasting energy in trying to make one mode as effective as the other, we would instead be using each mode as effectively as possible.
A railroad trucking combination would also allow the transportation provider to move freight off the highways and on to rail in response to construction, traffic, or a driver shortfall. And conversely, freight could be moved off of rail in the event of a rail bottleneck, strike, shutdown etc. You would also have all kinds of career opportunities open up for people on both sides of the biz. A locomotive engineer might for example buy a couple of trucks to run on the side. A truck driver might decide that life as a switchman or conductor would be more suitable.
Given that many of the US class 1's do provide door-to-door solutions to off rail customers I'm not sure what the appeal of investing capital in acquiring trucking firms would be.
If I am a shipper in the Eastern half of the US I can call CSX and have a domestic 53' container on a chassis spotted at my loading bay when I need it. The tractor pulling the rig will be owned be an owner/operator but will be contracted to CSX.
I can also call NS's Triple Crown service and a roadrailer will show up (although this is a more limited network destination- wise).
The biggest reason why a Class 1 may not want to own an over-the-road line haul trucking firm is that there is a risk of alienating an important customer base; truckload companies such as Schneider National and Swift who do a lot of intermodal TOFC (and increasingly) COFC.
If you are a Class 1 and you buy one of the big truckload outfits do you really think you can capture enough business from the other OTR firms to justify a loss of their trailers and containers on your trains?
There are very good reasons that the US freight railroad industry has chosen to focus on it's "core business".....
As to capacity constraints as an excuse, I would simply point out that the sort of additional business greyhounds has been advocating for would not require building an additional track. But as he says, operations folks do not want change.
jeffhergert That includes many railroad employees, me included. But then, I remember when we used to be busy most of the time. Business has been down on the section I work, but they don't seem to be too worried about getting new business to replace what they've lost.
That includes many railroad employees, me included. But then, I remember when we used to be busy most of the time. Business has been down on the section I work, but they don't seem to be too worried about getting new business to replace what they've lost.
Jeff,
I have never worked for a railroad so it is hard for me to argue with your direct experience. But it is hard not to notice that freight railroad companies do not do things the way you and others here would advise them to. If you have any insight about why they don't perhaps you could share it with us.
PS, As I read the posts here I see the "low hanging fruit" theory has a lot of support. My father had a small apple orchard. If you have few apple pickers you are going to focus on the low hanging fruit as you can pick it a lot faster than you can if you have to haul and move a ladder. It does make sense to me that a railroad with a limited number of tracks would focus of filling its tracks with freight trains. If it is doing that it is being successful. But getting more freight would involve first constructing a whole new railroad track, a massive investment. Before you do that you would want to be sure you will have the business to pay for it.
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