Roadblocks

[BaltACD]

jeffhergert

Railroads thinking that if it isn't 100 cars at a time and/or moving at least 500 miles (750+ might be closer to it)  it isn't worth bothering about.  Also having to actually switch cars, either in/out of a customer or at classification yards to get business is a downer.

They've been wholesalers of transportation for so long, I think they don't know how to be retailers again.

Jeff   

Nor do they really want to become retailers again.  Retail loose car transportation would increase costs in switching and the manpower to do the switching.

[jeffhergert]

Railroads thinking that if it isn't 100 cars at a time and/or moving at least 500 miles (750+ might be closer to it)  it isn't worth bothering about.  Also having to actually switch cars, either in/out of a customer or at classification yards to get business is a downer.

They've been wholesalers of transportation for so long, I think they don't know how to be retailers again.

Jeff    

[Euclid]

Murphy Siding

    As part of the bigger economic picture, we see railroad traffic slowing down.  Less coal and oil moved equals less total traffic- makes sense.  In the meantime, the railroads in recent years have worked a lot on adding capacity.  In theory, the railroads should be in a good position to get out there and sell some service.

      What do you see as the biggest roadblocks towards railroads making those gains in their piece of the transportation pie?  In my part of the world, the road block would be a finite amount of outgoing traffic.  There's only so much grain, fertilizer, ethanol and pink rocks to be shipped.

    

 

So railroads have excess capacity for two reasons.  One is that the economy is down, and the other is that they have recently added capacity when business was booming.  So what the railroads need to do is have a sale by reducing the price and increasing their speed, consistency of performance, and overall service.  That is the economics in a nutshell.  As you surmise, they need to get out there and sell their service. 

I don’t see any roadblocks to that solution unless the falling economy outpaces it.  I am interested to hear what others think the roadblocks will be.  We have already heard about some roadblocks in the Super C thread.  What are some others?   

[PNWRMNM]

Murphy,

The most important roadblocks are between the ears of top railroad executives, marketing and operating guys.

The top managements have cut HQ marketing staffs back so far that the few left must concentrate on keeping the big fish. They do not have the time to go looking for new traffic. Due to lack of field forces, the carriers have almost no one out on the ground looking for traffic, that is they have no marketing inteligence.

New traffic will often disrupt the operation, and operating guys are evaluated on their cost control, so they tend to resist disruption. You would think the marketing guys could "buy" what they needed from operations, but I know of no institutional mechanism to do so.

For a real world example consider perisahbles out of eastern Washington State. The BNSF has no clue of the long haul traffic they are running past at Wenatchee, Quincy, and Pasco. They gave away much of the margin by allowing a third party to market the anemic service they operated out of Quincy. They could, and should, offer their own service, with their own equipment and control the whole thing door to door. Get all the available revenue! Top management is unwilling to make the admittedly substantial investment in refrigerated containers. When the operational going got tough a couple of years ago, they gave up on the very idea of expedited service of any kind between the PNW and Chicago.

Problems: no knowledge, no champions, no tollerance for risk, no perishable traffic. Same issues apply to even larger market for perishables from California.

Greyhounds sees same issues for meat out of the beef belt that extends to the south and west from your area all the way down to Amarillo.

Mac McCulloch

Grew up in the self proclamed, but truly, Apple Capitol of the World, Wenatchee WA.

[Murphy Siding]

    As part of the bigger economic picture, we see railroad traffic slowing down.  Less coal and oil moved equals less total traffic- makes sense.  In the meantime, the railroads in recent years have worked a lot on adding capacity.  In theory, the railroads should be in a good position to get out there and sell some service.

      What do you see as the biggest roadblocks towards railroads making those gains in their piece of the transportation pie?  In my part of the world, the road block would be a finite amount of outgoing traffic.  There's only so much grain, fertilizer, ethanol and pink rocks to be shipped.