Most valuable info from CNSF. The scales are lifted from my eyes, and I see how it is easier to manage, on a daily basis, one 53-ft. trailer as opposed to 20 empties + the flat or well cars to accommodate them.
I will take no more cheap shots at railroad management.
It's true: There are inherent advantages and disadvantages to every transport mode.
Maybe we really would be better off with only two more or less competitive rail systems in North America. Just to lose situations like CN's (ex-WC's) disadvantage to CSX in the situation described by CNSF.
So -- maybe Hunter Harrison is right?
I've got a health problem (which is not going to kill me ) and I've been slow participating. Hopefully, I'll get back in this very interesting discussion soon.
CNSF knows what he is talking about. He formerly did this for a living too. But he did it at a much higher lever than I ever reached.
He's cited a valid problem that needs to be dealt with. But I'm confident it can be successfully dealt with.
Now if I could just remember where I put those pills.
A few comments:CN...thanks for your great discussion on this matter. Until we have true transcontinental lines, this type of move (Iowa - East Coast) will be difficult to achieve unless there is big volumes, or big profits. Great point on any of the large truckers staying away from this. That is probably the best reason this is not occuring.
Second point. I talked to a person who sells refer trailers today and asked him what a typical monthly lease rate is for 53 ft refer trailer and he indicated $1500 per month. Now, that is probably for smaller companies, no doubt the rails or big truckers could do better and granted it is for a trailer, not a container. So, lets say you can drop the pricing down to $1200 per month. How many Iowa - East Coast turns would be made in a month? I dont think you could do 4 per month, so you would be looking at somewhere about $350 - $400 per trip in trailer or container costs, this doesnt include TTX flats. Possible margins are eroding quickly.
CN...I see all these JBH containers moving west on NS from Harrisburg and other DC locations. I have no idea of the percentage of which are loads, but probably not too many. Do the railroads charge same pricing moving containers empty as loaded?
Ed
This is all very interesting and it seems a major hurdle is passing the IM loads onto another line, such as CSX. But the Chicago-Naperville, IL-IN-WI Combined Statistical Area has a population of 9,912,730. I would think that could support one meat train inbound daily.
C&NW, CA&E, MILW, CGW and IC fan
Having rode this line as a Hobo...Traffic is pig feed and paper products from Cicero to Dubuque and on to Waterloo IA. After Waterloo traffic is distributed to other short lines and feed lots and then peters out and there are few trains west of Waterloo. The Chicago Central railroad acted as a seperate short line and still kinda does in the CN System with its own little yard in Cicero S of the BN Yard
I won't wade too deeply into this object lesson in railroad marketing, since Greyhounds is a very qualified teacher who has done this for a living. Those of you following the exercise will learn from him. However, as someone else who has also done this for a living, I'd like to add a background comment. (Greyhounds can probably guess what's coming, as he's heard this from me before.)
I think you're all being too hard on CN's marketing people here. True, they control the origin, but the destination roads (CSX and, for arguments sake, BNSF) have just as much, if not more, at stake. It is they who will get the lion's share of the linehaul revenue, and it is both the quality of their overall intermodal networks and their focus on this particular move that will determine the success of the venture. It would be relatively easy for CN to handle a daily block of 40-50 intermodal loads to a single Chicago facility and get it right - especially on a line that has excess capacity. It's what happens after that, when you fan out to all the destinations nationwide and try to push those loads through a strainer that's already gummed up, that's the trick to manage. (Take a look at some of the other recent discussions here about capacity issues and performance on CSX and BNSF in general.)
And then there's perhaps the biggest question (which Greyhounds has said we'll get to in due course) of equipment supply. CN on their own can't ensure that someone is loading 40-50 intermodal units a day into that part of Iowa, nor can they magically make 40-50 empty intermodal units (plus railcars to move them) appear every day in Chicago.
So, I would suggest that this is more than just a railroad cultural issue. It's structural. This example illustrates the reasons why the U.S. intermodal industry has evolved as it has. The question we should be asking is not why CN isn't jumping all over this, it's why isn't J.B. Hunt, or Hub Group, CH Robinson, or any one of a dozen other national intermodal logistics providers? They are the ones whose businesses are set up to manage intermodal loads and equipment moving all over the country on multiple railroads.
I'm sure if Hunt came to CN with a solid plan to go after this business, CN would happily support them. I suspect the reason it hasn't happened has to do with the aforementioned issue of backhaul/equipment supply. Opportunities like this are actually a dime a dozen. Substitute frozen meat with paper out of International Falls, baled cotton out of west Texas, containerized ag exports out of northern Alberta, or bananas coming in via the port of Mobile - I've seen all sorts of these in my time, and the problem has always been the same: How do you get an adequate equipment supply into the origin when there isn't a major metropolitan market nearby to drive inbound demand?
So how do the truckers do it, you ask? (Correct question at this point.) Since they were at one time on my beat, I've had top management at Werner and other major trucking companies explain this to me directly. They search high and low for any load they can find, from anywhere in the country, going anywhere within a couple hundred miles of the loading point. When they've exhausted those opportunities, they'll taking anything moving partways back in more or less the right direction. Or, they'll triangulate. Maybe there's another plant near our shipper in Iowa receiving large quantities of raw material from Minnesota. So, they'll grab that leg, and then figure out how to get equipment into Minnesota. Over-the-road truckers have way, way more flexibility in staying loaded and balanced than anyone tied to a point-to-point, linehaul intermodal network - even if it's a national network.
That's not to say that a determined, creative team couldn't make it work. Here's a real-world object lesson: paper products out of Green Bay. Wisconsin Central teamed up with Schneider to move large quantities of loads out of Green Bay to destinations all over the east and south. WC ran a more or less dedicated train into Chicago and then handed off to CSX. There wasn't enough inbound traffic to Green Bay to send trailers there loaded, but Chicago was close enough, so Schneider focused on loading trailers back into that area and WC moved them empty from there.
On paper, it should have worked fine, and it did last for as long as WC was independent, thanks to their incredibly hard work. When CN killed it not long after buying WC, I'm sure the railfan community shook their heads and blamed CN for being a lazy Class 1 suffering from a 'too-big' mentality and culture. The reality, however, was that even though WC had been bending over backwards trying to make it work, the program had encountered serious problems and had been suspended for weeks at a time more than once.
The reason? CSX, the primary beneficiary of WC's hard work, couldn't be bothered to reliably provide WC with a supply of flatcars to handle the inbound empties goint to Wisconsin. When equipment was surplus, everything was fine, but whenever they were short of cars - even though WC was giving them upwards of 20-30 loaded flatcars per day - they hoarded the flats in their system and let WC starve. Why? Because they knew Schneider could run over the road between Chicago and Green Bay at only slightly higher cost than using WC, so if the WC service went down, CSX would likely still get the loads from Schneider at Chicago. CN killed the program because they quite rightly saw it as being an extension of CSX, and weren't going to expend resources on a rail move that CSX didn't care enough about to support consistently.
I'll leave it to all of you to decide whether that's cultural, structural, economic or whatever. But it's generally why these sorts of seemingly obvious opportunities continue to be passed up by the industry. If the origin is relatively lightly populated; if the outbound loads are going 'everywhere'; and if more than one railroad is required to make it work - it's likely going to stay with truck. Especially now that the railroads are, in general, choking on more business than they can handle.
jeffhergert mbv9415 Regarding your Council Bluffs questions, BNSF does have an intermodal facility at Gibson Yard and Iowa Interstate has a fairly robust intermodal business, with room for more growth. As far as the CN trackage, there is carload traffic on the Omaha side, but not much. Word is that they have filed to abandon the Iowa trackage west of the yard to the bridge and the Omaha trackage. Supposedly this is the first step to getting the old bridge removed across the Missouri River as the Corps of Engineers has deemed it a navigation hazard. The IAIS does the intermodal work for the UP in Council Bluffs. The buzz has been that the old IC bridge is going away. Although I'm less sure of them (CN) abandoning trackage in Omaha that they actually use to serve their customers. They have been using the UP and BNSF to access the Omaha side for years. Jeff
mbv9415 Regarding your Council Bluffs questions, BNSF does have an intermodal facility at Gibson Yard and Iowa Interstate has a fairly robust intermodal business, with room for more growth. As far as the CN trackage, there is carload traffic on the Omaha side, but not much. Word is that they have filed to abandon the Iowa trackage west of the yard to the bridge and the Omaha trackage. Supposedly this is the first step to getting the old bridge removed across the Missouri River as the Corps of Engineers has deemed it a navigation hazard.
Regarding your Council Bluffs questions, BNSF does have an intermodal facility at Gibson Yard and Iowa Interstate has a fairly robust intermodal business, with room for more growth.
As far as the CN trackage, there is carload traffic on the Omaha side, but not much. Word is that they have filed to abandon the Iowa trackage west of the yard to the bridge and the Omaha trackage. Supposedly this is the first step to getting the old bridge removed across the Missouri River as the Corps of Engineers has deemed it a navigation hazard.
The IAIS does the intermodal work for the UP in Council Bluffs.
The buzz has been that the old IC bridge is going away. Although I'm less sure of them (CN) abandoning trackage in Omaha that they actually use to serve their customers. They have been using the UP and BNSF to access the Omaha side for years.
Jeff
MP173Just checked the map for Tobyanna, Pa...not a good fit for CN/CSX. It is about an hour north of the Bethlehem, Pa. intermodal terminal, but that is on the NS. I dont see CSX working without a huge drayage charge. I would think the drayage charges for Iowa and out of Bethlehem would consume about $500-600 of the line haul charge of $1800. That leaves about $1200 perhaps a little less. What kind of backhaul opportunity exists out of that area to Chicago/Iowa? What kind of ROI hurdle rate do the rails have these days for new projects, particularly when there seems to be a need for capital? Ed
I like the way this discussion is going. Good questions and ideas with no flaming.
Ed, I perceive you are way high with the drayage costs in Iowa. Slightly too high in the northeast. I'll try to get to them next. It's true that Tobyhanna would be better served off the NS instead of CSX. But remember we're going "Everywhere East" out of Cedar Rapids. Not just Tobyhanna. I'd like to run the CN train in to a Chicago IM terminal of an eastern carrier, either CSX or NS, to avoid the Chicago transfer charges an delays. So we may have to suboptimize a few destinations, such as Tobyhanna, for the overall efficiency of our system.
I have no idea what CN's ROI "hurdle rate" is. (That's the rate of return a capital investment must be projected to earn in order to have a chance of getting funded.) I used a 18% annual rate for the Cedar Rapids terminal calculations.
I know about the tunnel at E. Dubuque. I rode through it twice in a locomotive cab. AFAIK, it will not clear full height double stacks. But right now I do not conceptualize use of DS west of Chicago. I'm thinking of "TEEING UP" the containers west of Chicago. They'll go TOFC on their chassis on that part of the trip. That will avoid the hassle of matching up containers and chassis at the small Cedar Rapids terminal. It will also simplify terminal operations and reduce the required handling at CR. It should also save some space. If the traffic really takes off opening up the line for DS can be considered at that time.
RoadRailers might work if we were only going from Cedar Rapids to RoadRailer terminals in the East. In concept we're going to many different terminals located from Montreal to Miami. The containers to be sorted at the eastern carrier's Chicago facility. Many concept destinations do not have RoadRailer service. RoadRailers would be very limiting as to possible destinations.
Next up - estimated drayage costs. We'll deal with backhauls down the road.
MP173 Great discussion and number crunching. LA Ram...I knew there was a tunnel on that line, but it flew right by me and I drove right past the tunnel 10 days ago. I think that tunnel is a game changer. Perhaps the Roadrailer system would work. Anyone have an idea of drayage costs on both ends? Also, gotta figure in the refer lease costs for containers. I will be in contact with a couple of my industry folks about lease rates. Ed
Great discussion and number crunching.
LA Ram...I knew there was a tunnel on that line, but it flew right by me and I drove right past the tunnel 10 days ago.
I think that tunnel is a game changer. Perhaps the Roadrailer system would work.
Anyone have an idea of drayage costs on both ends? Also, gotta figure in the refer lease costs for containers.
I will be in contact with a couple of my industry folks about lease rates.
I think greyhounds would have known about the tunnel in East Dubuque, since tunnels are rare in the midwest. These days a lot of the loads are ethanol. Today I saw an afternoon WB with UP power up front hauling mostly grain cars.
Just checked the map for Tobyanna, Pa...not a good fit for CN/CSX. It is about an hour north of the Bethlehem, Pa. intermodal terminal, but that is on the NS. I dont see CSX working without a huge drayage charge.
I would think the drayage charges for Iowa and out of Bethlehem would consume about $500-600 of the line haul charge of $1800. That leaves about $1200 perhaps a little less.
What kind of backhaul opportunity exists out of that area to Chicago/Iowa?
What kind of ROI hurdle rate do the rails have these days for new projects, particularly when there seems to be a need for capital?
beaulieu There are 6 shuttle grain loaders west of Iowa Falls on the IC. Since that is Iowa they likely load Corn bound for either export via Louisiana or Poultry feeder operations in the SE. It is my understanding that this is one of the major reasons the IC bought back the Chicago Central.
There are 6 shuttle grain loaders west of Iowa Falls on the IC. Since that is Iowa they likely load Corn bound for either export via Louisiana or Poultry feeder operations in the SE. It is my understanding that this is one of the major reasons the IC bought back the Chicago Central.
Yes....
I thought the reason that IC/CN Officially gave for buyback of this line was increasing the line haul of Iowa products via their routing to Gulf Coast Ports from Chicago to Iowa itself. Only going off long-term memory here so I could be wrong.
I wonder if this line would be a good triple crown roadrailer candidate? There would be a lower initial cost for a terminal.
As always, Greyhounds provides us with excellent analysis and I WISH so much that the CN would be smart enough to take a hard look at this. My only question and concern would be the tunnel at East Dubuque, Illinois. Am guessing that there would have to be some work done on this to accomodate double-stack (presumably anyway) traffic.
Our price targets.
According to www.truckloadrate.com the minimum dry van truckload rate from Cedar Rapids to Tobyhanna, PA is $2.01/mile + $0.29/mile fuel surcharge. It's 941 miles. The total truckload cost to the customer is $2,164.30.
We're going for a 10% discount to switch the freight over to intermodal. That discount will be $216.40/load. So that puts our target door to door intermodal rate at $1,947.87
From Waterloo, IA (Tyson pork drayed via the Cedar Rapids ramp.) to Tobyhanna, PA the minimum truckload reefer rate shows as:
955 miles at $2.19/mile = $2,091.45 line haul revenue.
955 miles at $0.33/mile = $ 328.35 Fuel Surcharge
955 miles at $2.52/mile = $2,419.80 Total over the road trucking charge
With the 10% discount our target rate is $2,177.82, a savings of $241.98 per load. That's what we've got to work with here.
greyhounds MP173 This will be fun. I don't know how much "fun" this will be. It looks like the work I did in days gone by - for pay. I was trying to show the gross revenue per train mile at various levels of eastbound and westbound loadings. It assumes $1.00/container mile eastbound and $0.75/container mile westbound. This whole thing will be, at best, one big SWAG. Determining the costs of specific rail movements remains very imprecise. Since we do not have access to real data, we're going to have to make many assumptions that may or may not be valid. Such as: the cost of an IM terminal at Cedar Rapids. In the real world I could get a projection. Here, the best we can do is an assumption. If we guess $2,000,000 (Let's be cheap with this terminal. It's only designed for an average of 40 loads per day.), a 25 year life, and a 18% interest rate, I get an annual ownership costs of $364,183.19. In Excel it's: 12 x (=PMT((0.18/12),(25*12),2000000). I don't like using guesstimates. Are you sure you want to "have fun" with this? Anyway, if we make another assumption of a six day/week operation, while allowing for holidays, and 40 loads per 300 workdays, we get 12,000 loads per year. Dividing the $364,183.19 annual ownership cost of the terminal by the 12,000 annual loads we get a Cedar Rapids terminal ownership cost of $30.35 per load. That figue will go down if we can put more annual loads through the terminal, particularly westbound loads. This is one big SWAG guesstimate. Anyone, please feel free to point out errors on my part. I'm kind of rusty at this. Shall we continue?
MP173 This will be fun.
I don't know how much "fun" this will be. It looks like the work I did in days gone by - for pay.
I was trying to show the gross revenue per train mile at various levels of eastbound and westbound loadings. It assumes $1.00/container mile eastbound and $0.75/container mile westbound.
This whole thing will be, at best, one big SWAG. Determining the costs of specific rail movements remains very imprecise. Since we do not have access to real data, we're going to have to make many assumptions that may or may not be valid.
Such as: the cost of an IM terminal at Cedar Rapids. In the real world I could get a projection. Here, the best we can do is an assumption. If we guess $2,000,000 (Let's be cheap with this terminal. It's only designed for an average of 40 loads per day.), a 25 year life, and a 18% interest rate, I get an annual ownership costs of $364,183.19. In Excel it's: 12 x (=PMT((0.18/12),(25*12),2000000).
I don't like using guesstimates. Are you sure you want to "have fun" with this?
Anyway, if we make another assumption of a six day/week operation, while allowing for holidays, and 40 loads per 300 workdays, we get 12,000 loads per year. Dividing the $364,183.19 annual ownership cost of the terminal by the 12,000 annual loads we get a Cedar Rapids terminal ownership cost of $30.35 per load. That figue will go down if we can put more annual loads through the terminal, particularly westbound loads.
This is one big SWAG guesstimate. Anyone, please feel free to point out errors on my part. I'm kind of rusty at this.
Shall we continue?
Please continue. At least one of us (me) is interested in the various estimates, assumptions and projections that go into a decision like this, and the process an entity goes thru in making such a decision. Even if your input numbers are SWAGs, an explanation of the process and the things that must be considered would be educational. We aren't investing any real money, and there's no penalty for the numbers not being perfectly accurate, so why not? You know more about the process than anyone who has spoken up, so please, instruct us.
MP173This will be fun.
This will be fun.
Does this work?
Well, it didn't work very well. I'll be back after sleep.
Ken:I always appreciate your comments on the transportation industy and particularly your passion for handling meat out of Iowa. So, I will bite on this and let me ask you a few questions (because I think this would work, but probably not on the CN):
1. Cost for establishing a terminal in Cedar Rapids?
2. Average drayage costs to Cedar Rapids terminal? I have lost touch with the trucking costs, but it seems as if a $200 drayage in the CR area (city limits) would cover it.
3. I would assume a thru rate would be necessary from CR to CSX east coast facilities. What is the average container rate for 931 miles? I have no idea but would assume a cost of $1 per mile, perhaps? How would that revenue be split between CN and CSX? If it is on the per mileage basis then CN would garner $271. A trainload of 45 containers to CSX would yield revenue of $12195.
4. How is that $12195 going to stack up vs the fixed costs of a locomotive (how much is a locomotive lease per day? I have no idea).
5. Per diem charge for TTX tables?
6. Labor cost for one crew member? What about labor costs for CR terminal?
7. Backhaul from Chicago to CR? What can be expected for container freight to the middle of Iowa? Perhaps work out a deal with some TL carriers in Chicago (wait, CRST and Heartland are looking for the same freight).
I agree with quite a bit of your points, primarily the IC line needs some traffic to support the heavy fixed costs, but I am not sure that 45 containers a day (one way) is going to cover costs and add a contribution so that I can continue to recieve my healthy CN dividend check in March, June, September and December (which has been growing greatly the past 10 years).
I think Indiana Railroad is perfect for what is happening there. I have not read the article as digital delivery is quicker than the USPS, but as I understand it CN is bringing Asian containers from Prince Rupert to Chicago and then a train drops off the containers at Effingham and then interchanges at Newton daily. All of this is part of already established routes and movements. It would be great to know what Indiana Railroad gets for hauling a container from Newton to Indy.
I could see a shortline handling your movements to Chicago, but not sure if CN will bite.
Intermodal needs to be high volume or unusual circumstances to make coin. While I was writing this, NS ran 3 intermodals thru Chesterton with volumes of 158 containers, about 100 containers, and 233 containers for nearly 500 containers in 25 minutes. That is alot of volume.
Victrola1 The Iowa Northern is a short line. The map shows their territory. Both the Iowa Northern and CN serve Cedar Rapids and Waterloo. http://www.iowanorthern.com/communities/ What difference is there in the Iowa Northern visa vi CN in marketing and obtaining online business?
The Iowa Northern is a short line. The map shows their territory. Both the Iowa Northern and CN serve Cedar Rapids and Waterloo.
http://www.iowanorthern.com/communities/
What difference is there in the Iowa Northern visa vi CN in marketing and obtaining online business?
greyhoundsAt this point it is important to stress that neither the exsisting IRR operation nor the CN Cedar Rapids/Waterloo conceptual operation competes with the truckers for freight between the trains terminals. Drayage costs at origin and destination (not present for the truckers) will destroy any hope of covering IM costs at these distances. But we're not talking about freight moving between the train terminal cities. We're talking trains that extend the existing rail IM network by connecting more distant places in that network to places such as Cedar Rapids. There's a lot of freight to be had. If you've got a very empty railroad, as CN does, there is a need to take a very long hard look at adding revenue to the rail line. If that is outside your culture/business model/whatever, so be it.
Ken: Very informative post. One point I would like to see clarified, however. Is the Indiana RR service strictly IM terminal to terminal (CHI and IND)? If so, why could not IC/CN intermodal compete with loads of meat, for example, from a meat packing center, to one of the several distribution centers in Chicago?
nb: I have never done a 24-hour count, but it seems to me there is more than one train each way on the IC line.
If you go further west along the same rail line, even more product is being handled by truck. According to the USDA, Iowa's red meat production for 2013 was 6,571 million tons (2nd place among the states). Nebraska was first at 7,353 mil tons. A substantial portion of that comes out of Tyson's plant near Sioux City.
MP173I am not sure how attractive intermodal out of Cedar Rapids would be. If the freight is eastbound, then CN would rail it 300 miles to Chicago where it would have to do the Windy City Shuffle. Ditto southbound, although CN could possibly rail it to Memphis and beyond. How about westbound? Rail it to Omaha and then interline to UP or BNSF? I dont see that working out. Do either BNSF or UP have intermodal service in Omaha? Meanwhile in Cedar Rapids you have CRST and Heartland Express, both of which are outstanding truckload carriers.
Well, you cannot just give up and let the truckers haul the loads. Especially if you've got a greatly underutilized railroad, as CN does in Iowa.
You've got to overcome the "Class 1 Mindset" that will quickly concede Cedar Rapids to the truckers. Ed uses the "Class 1 Mindset" in his dismissal of the intermodal opportunities at Cedar Rapids (and nearby Waterloo). No shame in that. That's just what the CN is doing.
300 miles Cedar Rapids to Chicago? Not worth the bother. That's the current culture on the Class 1's. That's how they think.
I was pondering how to write a decent reply when my May 2015 issue of Trains arrived via email. In the emag is another excellent article by Fred Frailey (citing the aforementioned "Class 1 Mindset"). It's about the success of intermodal on the Indiana Rail Road. The Indiana is being successful at 153 miles. Now, if the IRR can successfuly compete with trucks using IM service between Chicago and Indianapolis, just why can't the CN offer a truck competitive service between Cedar Rapids/Waterloo and Chicago connections?
In fact, it may not be possible. But it's something that certainly deserves good analysis and study. It's not something that should be quickly dismissed because of a mind set/corporate culture. (Frailey cites the "Class 1 Mindset" as the main obstacle to market development such as this.)
At this point it is important to stress that neither the exsisting IRR operation nor the CN Cedar Rapids/Waterloo conceptual operation competes with the truckers for freight between the trains' terminals. Drayage costs at origin and destination (not present for the truckers) will destroy any hope of covering IM costs at these distances. But we're not talking about freight moving between the train terminal cities. We're talking trains that extend the existing rail IM network by connecting more distant places in that network to places such as Cedar Rapids. There's a lot of freight to be had. If you've got a very empty railroad, as CN does, there is a need to take a very long hard look at adding revenue to the rail line. If that is outside your culture/business model/whatever, so be it.
Here's a notional concept of a Cedar Rapids-Chicago operation.
1) The Chicago end point could be the CSX IM terminal at Bedford Park. That will give access to all eastern population centers (the destinations) from Montreal to Atlanta to Miami without cross town drayage expense, or rail transfer expense, in Chicago. (As one example, it's 931 highway miles from Cedar Rapids to the Walmart grocery distribution center in Tobyhanna, PA. If you can't make your IM service truck competitive at 931 miles you need to find another line of work. There are many other grocery DCs serving the large population in the destination area.)
2) Establish dedicated train service between Cedar Rapids and Chicago on a schedule. Run it reliably as scheduled. (35 MPH terminal to terminal would require 7 Hours and 45 minutes run time for the 271 rail miles.) You could stretch it a bit to allow break times (i.e. the toilet) and a half hour stopped for a lunch break. But whatever schedule you establish, make it a reliable one.
3) It would be ever so nice if the unions would cooperate in this market development by allowing a one person crew on such a train. A train length limit could be adopted for one person operation. For example, if the train was over 45 containers a 2nd crew member would be required. We could see if a one person crew worked out. I'm convinced it will. One person can handle a relatively short train on a underutilized rail line.
4) Get under the truckers' prices by a good amount. The railroads' marginal cost will be lower than the truckers' marginal costs. Use that to develop the business.
I'm convinced this would work. It at least deserves a good analysis and a market test. It should not be dismissed out of hand due to a "Class 1 Mindset".
And yes, the UP and BNSF both have intermodal terminals at Omaha or Council Bluffs.
What Balt said, and there's part of a Class I subdivision in my neck of the woods that may be leased to a short line if the two entities can come to terms.
Norm
Boyd I wonder if sometimes a large RR buys a regional rail line just so a competing large RR doesn't buy it? Routing of trains through or around a town, city or state to me could be like a chess game. How many trains get purposely routed in a way to avoid going through states with higher taxes on their right of way like my home state of Minnesota?
I wonder if sometimes a large RR buys a regional rail line just so a competing large RR doesn't buy it? Routing of trains through or around a town, city or state to me could be like a chess game. How many trains get purposely routed in a way to avoid going through states with higher taxes on their right of way like my home state of Minnesota?
Selling or leasing lines to Regionals or Short Lines is a exercise in reducing costs. The Regional or Short Line are not bound by the Union agreements of the Class 1 carriers and thereby are able to reduce the costs of operating and maintaining the lines. The Class 1 will either get the benefit of the road haul of the customers on those lines or the ability to operate their own trains over the trackage for a fee that is less than the cost of the Class 1 maintaining the trackage.
Never too old to have a happy childhood!
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