Ken: You make a lot of good points. How to assign fixed costs/overhead is also tricky and a false picture could be obtained if not properly done. On a given stretch of track, the overhead from 'administration, dispatchers, sales force, etc. is the same whether 20 trains operate or none. Typically it is spread out equally, I believe. But a more useful method would assign it to a smaller number of trains until the break even point is reached. Then any trains/loads beyond that are largely gravy. That tends to encourage the finding of more loads, even those with a small margin above actual operating costs of crew and fuel, thus increasing the overall bottom line.
C&NW, CA&E, MILW, CGW and IC fan
BaltACDWhile FEC's share of the haul is on 350 miles or thereabouts; most of the traffic they carry is interline traffic with both CSX and NS - so the actual haul for the traffic is much longer than 350 miles.
I totally agree with that. But the FEC only gets paid for those 350 miles, the NS or CSX gets the rest.
And, most importantly, the FEC is smart enough to leverage their trains that carry the interchanged revenue loads. They leverage the longer haul interchanged loads to add shorter haul busines. I'll paraphrase James J. Hill: "The railroad's cost are incurred by the train mile while its revenue accrues by the load. The objective of railroad management is to maximize the spread between the incurred train mile cost and the accrued per load revenue". That's as true today as it was when Mr. Hill said it. (It is greatly simplified.)
Once a schedule is established to handle the interchanged longer haul business certain cost that are usually considered variable become literally "Fixed". (I just gave six accountants a heart attack.) For example, there is no increase in crew cost if the train is expanded from 180 containers/trailers to 240 containers/trailers. So you cannot realistically assign any crew cost to the shorter haul containers that would fill out the train. Those loads simply move without any additional crew cost. They're incremental revenue with no incremental crew cost. They do maximize the total revenue of the loads while not increasing the train's per mile crew cost. Mr. Hill would approve.
And that is how FEC makes a buck hauling intermodal 350 miles. They understand this stuff.
WizlishI again agree with you that these might be 'thin on the ground', but there might be enough to make some version of this kind of service workable.
Look at TV shows. Used to be even the middling shows would be allowed to run all season, during which time they matured and became quite popular. Nowadays, if you're not in the top 5 on opening night, goodbye...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
UlrichSo if railroads can focus on reliable and consistent service that isn't necessarily fast as well as on keeping a lid on prices then that would certainly go a long way to making them the mode of choice. They also need to focus more on recapturing the smaller shippers by taking control of the freight consolidation and distribution function. Over the last 30 to 40 years that's been outsourced to third parties...
Both these points are correct, and critical. I have argued earlier that 'most' intermodal shipping is far more concerned with just-in-time delivery in various aspects than with end-to-end trip time, particularly when (as is so often the case) there is no economical rapid 'backhaul' market for all those inbound containers. Your point about 'early delivery' augments another concern: where are there effective ways of providing increased delivery latency without compromising the effective 'guarantee' of traversing the last mile to be just in time. A current rather pointed topic of research concern by the Government is truck parking on access ramps and outside defined 'parking' areas, or an extension of 'idling' concerns to areas that don't correspond to where shore power or APUs would be available. Some of this might be addressed via features in the intermodal transfer, or by decoupling the 'dwell' of the trailer from what the tractor needs to do at either end.
I'm not sure that the 'sweet spot' in taking over consolidation and distribution really resides with an intermodal railroad, unless there is some agile form of 'intrapreneuring' that can go head-to-head with more entrenched interests or more "conservative" (or excessively finance-oriented) stakeholders. I would personally be more inclined to 'outsource' much of the traffic generation to other services, including online services that can provide the appropriate QoS and disaster recovery, and concentrate exclusively on the portion of 'value-added' agio that pertains to the rail-mode advantages. (That is of course far more than a pro rata 'split' of the average competitive price across modes...)
Railroads need to focus on price and service level consistency. Speed isn't as important as it used to be because supply chain management has evolved to where receivers can anticipate their inventory needs far in advance...i.e. receivers are less likely to be caught low on inventory that requires immediate replenishment. I've noticed this myself over the last five years.. and have received more service failures for delivering too early than too late. So if railroads can focus on reliable and consistent service that isn't necessarily fast as well as on keeping a lid on prices then that would certainly go a long way to making them the mode of choice. They also need to focus more on recapturing the smaller shippers by taking control of the freight consolidation and distribution function. Over the last 30 to 40 years that's been outsourced to third parties..
UlrichToo complicated. At the core of trucking's success is simplicity.
There is no question about any of this, and I am (on a practical level) not at all sanguine that any of these 'high satisfaction' services translate at all well to intermodal, let alone intermodal with different last-mile providers on tap at either end, with anywhere near the combination of circumstances that would make it more cost-effective, let alone convenient, as compared to all-road moves by a single knowledgeable driver or team.
I was more concerned with ways that railroad marketing might make the 'other considerations' for such an intermodal service more attractive ... including, alas, some of the 'negative' arguments such as safety, insurance coverage, pilferage or damage, etc. I again agree with you that these might be 'thin on the ground', but there might be enough to make some version of this kind of service workable. It certainly won't be a large fraction of the existing traffic, perhaps no more than a small proportion, but one of the things that was raised 'originally' was the extent to which new traffic, even in small amounts with random or variable timing, might be desirable or even necessary for some railroads to pursue.
(No, this is not intended as a 'yes, but'(tm)...)
EDIT: Note to the Trains programming staff: can we have some 'smiley' translation entries for common abbreviations like (tm) or (r) that would provide replacement characters inline from the 'smiley' page or by inserting appropriate BBcode...?
Too complicated. At the core of trucking's success is simplicity. Sure, its a little bit more expensive, but what you get is point A to point B service without the need for transloading.. to anywhere roads go. Intermodal can't do that, and can only approximate truck service levels in certain very heavily travelled corridors where volumes are sufficient to make it work. Going back to my previous example, how can Waco, TX to Glace Bay, NS truck service be improved on? Loading at shipper's convenience..i.e. "get truck in here at 1:00 pm and we'll load it".. two to three days later that load shows up at the receiver, and once again it is unloaded at the convenience of the receiver. Forget about speed for a minute, the real advantage is simplicity.. load.. drive.. unload.. job done.
One 'potential' solution might be scheduled sailings of a relatively small consist of appropriate vehicles with associated services -- I'm reminded of the way Conrail was supposed to have assigned use of the Queen Mary car when needed.
The alternative might be to have a small fleet of 'agile' cars which could be delivered perhaps with autonomous-vehicle devices to a particular lane on a particular day, with some U-Ship-like back end optimization for additional population to capacity or for securing loads for the 'return lane'.
Would it not allow considerable relaxation on loading or dunnage to have some part of many of these trips 'on rail' instead of going over the roads? Particularly for some of these large flatbed shipments with close clearances, or moves that require coordination with electric services etc. to lift wires, secure crossings, etc.?
Part of the trouble with truck to rail conversions is that most shippers are small and don't put out the volumes to make shipping by rail viable. How does one convert one to three truckloads a month to rail? Especially if that small amount of traffic doesn't all move in one lane. Say, 30,000 lbs of steel from Waco, TX to Glace Bay, NS... once a month. If all/most shippers put out high volumes of consistent freight then rail would be a no brainer. But so many shippers, like businesses in general, are small mom and pop outfits that are family owned and employ fewer than 100 people. Sadly, the railroads kicked those shippers to the curb years ago, choosing instead to focus on conveyor like service to the few large shippers.
UlrichDepends on the industry segment. Flatbed and hazmat tank pay alot better than hauling consumer goods in a box. Flatbed varies from 50K to 90K a year.. fuel and hazmat that and more.
This brings up a highly interesting consideration: How much of the HIGH SATISFACTION traffic is amenable to intermodal competition? I would bet comparatively little has been done about any of the cited categories, and it might be interesting to hear some opinions about how some of these trips might be safely (or 'more safely', a different thing) done by practical rail movement.
One thing here: would someone rather live in the 'blast zone' for fuel tankers being ferried by rail vs. having them on highways or grade crossings? Interesting potential spin either way...
Automation will soon take care of the much overstated driver shortage. 20 years ago GPS was a pipe dream.. 30 years ago no one owned a cell phone... Just imagine what we'll see in another 20 or 30 years. Very unlikely we will need drivers at all... and if "drivers" are still needed in 2036 they will probably be of the "steering wheel attendant" type..with all skill removed. The bigger problem becomes how do we as a society cope with massive unemployment due to automation, the likes of which we've never seen before?
[quote user="dakotafred"]
OTR is not an attractive lifestyle, and not as well-paying as railroading. Five gets you 10, Mexicans will be driving most of those trucks in 5-10 years.quote]
Depends on the industry segment. Flatbed and hazmat tank pay alot better than hauling consumer goods in a box. Flatbed varies from 50K to 90K a year.. fuel and hazmat that and more.
greyhoundsI'll put the minimum profitable rail intermodal haul at around 400 miles. That's a rule of thumb. It does depend on the situation. Drayage costs and volume are keys
There are other potential 'keys' that might be more important. Most specifically is any place where either end of the lane is in a congested area, or one that is subject to temporal delays that are critical to the service timing (e.g. rush hour traffic considerations) -- or when part or all of the intervening trip involves factors that favor "local" drayage (at one or both ends of the lane) over run-through with cost-effective or sufficiently 'motivated' drivers or teams.
'Creative' understanding and successful promotion of some of these ideas by railroads represent, to me, one of the more interesting potential "new" service opportunities when the more logical sorts of low-hanging fruit have been exploited (or have significantly gone away...)
greyhoundsRoadRailers are macht nichts. ("Makes Nothing").
Actually it's an idiomatic expression that means "don't worry about it" or "it doesn't matter" or "no big deal."
greyhounds Convicted One And yet Norfolk Southern appears about finished with Roadrailers. RoadRailers are macht nichts. ("Makes Nothing"). It's not the equipment, it's the money. Candaian Pacific is continuing its intermodal service between Montreal and Toronto. About 340 miles. (If that service surived Hunter, it's good.) The FEC is doing OK at around 80% intermodal business and a maximum haul of 350 miles. I'll put the minimum profitable rail intermodal haul at around 400 miles. That's a rule of thumb. It does depend on the situation. Drayage costs and volume are keys. It does depend on the situation. But rail can be competitive on the Chicago-St. Paul, Chicago-Omaha, Chicago-Memphis, etc. lanes.
Convicted One And yet Norfolk Southern appears about finished with Roadrailers.
RoadRailers are macht nichts. ("Makes Nothing").
It's not the equipment, it's the money. Candaian Pacific is continuing its intermodal service between Montreal and Toronto. About 340 miles. (If that service surived Hunter, it's good.) The FEC is doing OK at around 80% intermodal business and a maximum haul of 350 miles.
I'll put the minimum profitable rail intermodal haul at around 400 miles. That's a rule of thumb. It does depend on the situation. Drayage costs and volume are keys. It does depend on the situation. But rail can be competitive on the Chicago-St. Paul, Chicago-Omaha, Chicago-Memphis, etc. lanes.
While FEC's share of the haul is on 350 miles or thereabouts; most of the traffic they carry is interline traffic with both CSX and NS - so the actual haul for the traffic is much longer than 350 miles.
Never too old to have a happy childhood!
Convicted OneAnd yet Norfolk Southern appears about finished with Roadrailers.
Railroads are currently trimming capex to make Wall Street happy.
Intermodal keeps going up, soaking up excess capacity from the decline in oil and coal.
The carload hit is primarily metals. When that market bounces back, along with met coal, that should be fun.
Victrola1Can intermodal rail be competitive in a shorter haul domestic market?
And yet Norfolk Southern appears about finished with Roadrailers.
samfp1943recover that abandoned load, and equipment
Russell
Wizlish desertdog In every truck stop (Flying J, Love's, TA, etc.) there is a rack of glossy hiring brochures from trucking companies looking for drivers, offering incentives like high starting salaries, signing bonuses, minimum time away from home. Each is competing for a small pool (apparently) of interested job seekers. So even if the loads are available, there may not be anyone to handle them. I look at this as being almost precisely the same as the situation for hospital nurses. Every job fair, every WSJ article contains all sorts of great-sounding offers for nurses, but the 'market' remains massively unclosed. And I expect that to continue. Anyone with much OTR experience likely knows, far better than I do, just how full of hooey one of those 'job offers' actually is, or what the actual lifestyle and economics entails. Even when we select out all the careful lies and creative prose, we're not left with the kind of dedicated yet resourceful 'team-driver' guys the trucking lines want to commoditize... which leads me to think about being an early cash-in for how to program autonomous trucks to fill some of the 'perceived needs' the bottom end of the trucking-line market actually thinks it wants ... and perhaps some of the needs of the owner-operator community, very different, too. It's harder to approximate this in actual nursing, although it will be fun and not a little amusing to see what comes up as people from places like crApple try.
desertdog In every truck stop (Flying J, Love's, TA, etc.) there is a rack of glossy hiring brochures from trucking companies looking for drivers, offering incentives like high starting salaries, signing bonuses, minimum time away from home. Each is competing for a small pool (apparently) of interested job seekers. So even if the loads are available, there may not be anyone to handle them.
I look at this as being almost precisely the same as the situation for hospital nurses. Every job fair, every WSJ article contains all sorts of great-sounding offers for nurses, but the 'market' remains massively unclosed. And I expect that to continue. Anyone with much OTR experience likely knows, far better than I do, just how full of hooey one of those 'job offers' actually is, or what the actual lifestyle and economics entails. Even when we select out all the careful lies and creative prose, we're not left with the kind of dedicated yet resourceful 'team-driver' guys the trucking lines want to commoditize... which leads me to think about being an early cash-in for how to program autonomous trucks to fill some of the 'perceived needs' the bottom end of the trucking-line market actually thinks it wants ... and perhaps some of the needs of the owner-operator community, very different, too.
It's harder to approximate this in actual nursing, although it will be fun and not a little amusing to see what comes up as people from places like crApple try.
[NOTE: highlights from previous posts are mine.]
[With an excess of twenty plus years OTR and several in the Safety Dept]; I would observe that Truck Driver Recruiting is analogous to fishing in a pond or lake. The pool is not unlimited but varies where one drops their lure.
Every truck drivers situation is somewhat different, and varied, based on their 'Company' and its freight, and dispatch practices. Mileages, only rarely, are paid based on 'actual miles'. Generally that mileage figure is a product of a Computer Program that is sold as an' industry standard'.. I might be a Rand McNally product, or taken off the compilations of what is sometimes referred to as the 'Household Movers Guide'. Whatever system is used, it will be a good bet that it is something less than actual miles driven. On some trips it can become a really problematic issue for some drivers... Can be areall bone of contention with some drivers.
Dispatch and pick-up times, and delivery times; again a set of variables based on many issues out of the drivers control...Late or missed deliveries by drivers can become problems that will shorten their employment periods; depending on the importance to Company of their rules and requirements, or job performance bonus eligibility.
Work for a Company with what might be interpreted as 'boarderline Safety Performances' (Equipment or maintenance issues, or too many accidents, or too many Driver Violations- Logbooks, paqperwork,etc.)- All tracked by not only States, but Feds; Compliance issues that can lead to roadside inspections, chect for all sorts of violations- each time consuming, and problematic for a driver.
There are any number of other' problems' that can befall a driver 'stuck out on the road'. All can build up to an immense lefel of dissatisfaction with an individual who might become extremely dissatisfied with a Dispatcher/or a Company.
A driver can pull into a Truck Stop or any other Driver Recruiting Operation. Find out that he is being offered a better job offer (The grass IS akways Greener!), park his truck, and load,take a new job offer, be gone in several hours in a 'new' ride..
It is then up to his previous employer to recover that abandoned load, and equipment; get it some where safe, or towed to a secure impound facility. All that means added expenses for the effected Trucking Company.
As to the driver and his/her performance: There are companies that 'track drivers' by CDL ####'s but it was always my experience that that available information on a driver who abandoned equipment, was weeks, sometimes months old.
WizlishI look at this as being almost precisely the same as the situation for hospital nurses.
One problem in the medical field is where the money comes from to pay those wages. I would almost say that it's analogous to the railroads pre-Staggers, except it's not the government setting rates - it's the insurance companies.
If a hospital contracts with an insurance company, they are forced to take what the insurance company offers, even if it's less than what will balance the books...
A small-town not-for-profit hospital is hard-pressed to find the cash to pay the wages necessary to attract the necessary talent.
The problem in emergency medical services is just as bad. Many services look to providing ancilliary services (such as invalid coaches) to keep them in the black.
desertdogIn every truck stop (Flying J, Love's, TA, etc.) there is a rack of glossy hiring brochures from trucking companies looking for drivers, offering incentives like high starting salaries, signing bonuses, minimum time away from home. Each is competing for a small pool (apparently) of interested job seekers. So even if the loads are available, there may not be anyone to handle them.
You see more stories on robots designed like humans. Their processing power increases. Their human like bodies are capable of ever more tasks done by humans. Labor cost is becoming less of a factor in manufacturing.
The wage differential between domestic and foregin labor shrinks. Manufacturing where labor is cheap and shipping the finnished product great distances may not be the future. Manufacturing is moving closer to markets.
http://www.macleans.ca/economy/business/why-factory-jobs-may-be-returning-to-america/
Can intermodal rail be competitive in a shorter haul domestic market?
OTR is not an attractive lifestyle, and not as well-paying as railroading. Five gets you 10, Mexicans will be driving most of those trucks in 5-10 years.
In every truck stop (Flying J, Love's, TA, etc.) there is a rack of glossy hiring brochures from trucking companies looking for drivers, offering incentives like high starting salaries, signing bonuses, minimum time away from home. Each is competing for a small pool (apparently) of interested job seekers. So even if the loads are available, there may not be anyone to handle them.
John Timm
Paul_D_North_Jr I too think the future is in intermodal. Unlike John Kneiling, though, there's also a need for carload service - grain to and from elevators and chemicals from refineries are examples. I've also seen cuts of 20 -40 cars come out of a local paper mill - Procter & Gamble at Mehoopany, PA - and that would be less economic if moved by truck/ container. Keep in mind that 1 container = only 1/4 or 1/5 of a railcar (by weight), so it would take a lot more IM units added to equal the loss of 1 carload. Likewise, but going the other way, a profit of X on a container would require the carload to have a profit of 4X or 5X to be comparable. - Paul North.
I too think the future is in intermodal. Unlike John Kneiling, though, there's also a need for carload service - grain to and from elevators and chemicals from refineries are examples. I've also seen cuts of 20 -40 cars come out of a local paper mill - Procter & Gamble at Mehoopany, PA - and that would be less economic if moved by truck/ container.
Keep in mind that 1 container = only 1/4 or 1/5 of a railcar (by weight), so it would take a lot more IM units added to equal the loss of 1 carload. Likewise, but going the other way, a profit of X on a container would require the carload to have a profit of 4X or 5X to be comparable.
- Paul North.
Kneiling's integral train concept included both tank cars and bulk cars so the large volume customers you mention could have been serviced. The trains could break down into 10 (or so) car self-propelled blocks to serve (somewhat) smaller industries.
What he was deadset against was small branch line customers that were getting a car or two at a time. For them he favored containerized intermodal.
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
Would a shortage of truck drivers also be part of it?
MidlandMike While I am happy for the increase in overall volume, shouldn't we be concerned about the shift to the more marginal, less profitable intermodal?
While I am happy for the increase in overall volume, shouldn't we be concerned about the shift to the more marginal, less profitable intermodal?
Post Staggers, the carriers learned that each service provided must cover costs and bring profit to the bottom line. The old 'we lose money on every shipment, but make a profit on the volume' days are long gone.
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