Euclid I suspect that if you double the train size, you cut the crew cost, but it more than doubles the rest of the operating expense. That is in addition to the cost of longer sidings and a possible loss of business due to compromising service.
I suspect that if you double the train size, you cut the crew cost, but it more than doubles the rest of the operating expense. That is in addition to the cost of longer sidings and a possible loss of business due to compromising service.
Now you have 1/2 the number of trains competing for track space and time.
Remember the basic tenant of railroad operations - daily service to the customer at the customers agreed upon switching window. Operating two or more trains beteen Origin-Destination (customer) pairs doesn't buy you anything. As long as the customer is getting the car turnaround and agreed upon switching windows - the customer doesn't care if the carrier is running one train or ten to provide what they want.
Additionally there are customers that only get served 1, 2 or 3 times per week - they also don't care how many trains, big or small, the carrier operates as long as they get their service.
Never too old to have a happy childhood!
I agree that most customers won't notice if their cars came in one long train or in two shorter trains. All most customers will see is the local/industry job that spots or pulls their cars.
Besides, should service get worse (is that even possible?) and customers decide to go to trucks, I'm not sure some of the railroads would even care. They would probably welcome it and just cut off more jobs, reduce or close more facilites and store more power.
Jeff
There must be some advantage to running shorter faster trains. Back in the 60s and 70s Union Pacific was known for short and fast trains, usually with an enormous amount of horsepower on the point to make it happen. Maybe that advantage is nolonger as relevant in this day and age of unit trains. Denver & Rio Grande Western was another railroad that liked to run short fast trains with alot of power. Given that trains (other than unit trains) take time to be assembled and disassembled, short and fast makes sense from a customer service perspective.
I suspect that a major factor is consistent velocity. Railroads work best when all the trains are running similar speeds.
Here in the east, I doubt you're going to see any 70 MPH unit trains.
Ask any dispatcher who handles Amtrak how he likes threading a 79 MPH passenger train through a forest of 50 MPH or 60 MPH trains of all sorts. There's a reason for the "halo" that surrounds the arrival of an Amtrak train at a given station.
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...
Railroads are bottom line economic entities.
Ulrich There must be some advantage to running shorter faster trains. Back in the 60s and 70s Union Pacific was known for short and fast trains, usually with an enormous amount of horsepower on the point to make it happen. Maybe that advantage is nolonger as relevant in this day and age of unit trains. Denver & Rio Grande Western was another railroad that liked to run short fast trains with alot of power. Given that trains (other than unit trains) take time to be assembled and disassembled, short and fast makes sense from a customer service perspective.
Short and fast only makes economic sense when you have customers that are willing to pay the true costs of what is involved in such an operation. Customers really don't want to pay any more for transportation - they want the cheapest freight rates they can get. Cheap rates and high cost service are mutually exclusive.
BaltACDShort and fast only makes economic sense when you have customers that are willing to pay the true costs of what is involved in such an operation. Customers really don't want to pay any more for transportation - they want the cheapest freight rates they can get. Cheap rates and high cost service are mutually exclusive.
Setting aside the customer's willingness to pay, are you saying the short and fast is more costly to the railroad than longer and slower?
I don't exactly recall, but when I read about D&RGW deciding in favor of fast and frequent trains, they anticpated higher profits just from their operating factors, and not from customers willing to pay higher prices.
Good customers are willing to pay alot more for better service. Compare the cost of mailing something to what Fedex charges, for example. Fedex is a great example of a company that provides over the top service and charges for it. Same principle applies to rail. Provide over the top service and charge accordingly. Of course I'm not talking about ALL customers... there are plenty who want five star dining at fast food prices.. forget those guys. The better ones understand the immutable law of business... you get what you pay for.
Ulrich Good customers are willing to pay alot more for better service. Compare the cost of mailing something to what Fedex charges, for example. Fedex is a great example of a company that provides over the top service and charges for it. Same principle applies to rail. Provide over the top service and charge accordingly. Of course I'm not talking about ALL customers... there are plenty who want five star dining at fast food prices.. forget those guys. The better ones understand the immutable law of business... you get what you pay for.
Railroads (at least mine does) provide 'over the top service' and there are basiclly only two customers that are willing to pay for it - UPS & FedEx - other trains may sit in sidings for hours to provide a route for these priority trains. I have to trust that what UPS & FedEx pay for their services cover the delay costs incured by other traffic that is held to insure the priority trains have cleared routes.
Lots of customers are willing to pay more for service... hence the very existence of the trucking and air freight industries. If it was all about price the highways would be empty and there would be no such thing as air freight. No riddles or mysteries... go for the higher value freight and step up service levels big time...i.e. short(er) trains and increased velocity throughout the network. UP and D&RGW had the right idea 40 years ago.
Ulrich Lots of customers are willing to pay more for service... hence the very existence of the trucking and air freight industries. If it was all about price the highways would be empty and there would be no such thing as air freight. No riddles or mysteries... go for the higher value freight and step up service levels big time...i.e. short(er) trains and increased velocity throughout the network. UP and D&RGW had the right idea 40 years ago.
40 years ago railroads were operating under ICC restrictive regulations.
36 years ago Staggers Act deregulation that let railroads in the US operate as businesses - pricing their product in accordance with the service provided.
40 years ago bankruptcy was a very real discussion among all carriers - even those who were skimping on maintenance so they could show they were 'profitable' to their stockholders. I suspect, had all carriers maintained their properties to level of 'well maintained' all of them would have been showing Red Ink on their financial statement. Penn Central, with all the maintenance they differred still couldn't get near the black.
The transportation marketplace of 40 years ago is not the same as it is today, nor are the railroads.
Bankrupcy wasn't an issue for UP and I don't think D&RGW either to my knowledge. Yes, it was a different era and a different marketplace; however, the same basic tenets of customer service remain true today as they were then. Today, railroads have more leeway in how they run their businesses. They can opt to run long mega trains that tie up everything else in their system and in their path... or.. they can chose the more enlightened approach of running shorter trains and foccusing on overall improved systemwide velocity. Speed and execution are everything... plodding along (at anything) is a recipe for failure if not disaster. All of our customers expect us to respond in seconds (not minutes) and most consider overnight door to door service a basic requirement and nothing special. That's what we're up against..and that's where the money is. Long trains might be fine on dedicated mine runs.. but if you're going to compete on the better paying merchandise freight the service requirements are much higher...there's just no room for plodding along with a bunch of low paying freight.
Ulrich Bankrupcy wasn't an issue for UP and I don't think D&RGW either to my knowledge. Yes, it was a different era and a different marketplace; however, the same basic tenets of customer service remain true today as they were then. Today, railroads have more leeway in how they run their businesses. They can opt to run long mega trains that tie up everything else in their system and in their path... or.. they can chose the more enlightened approach of running shorter trains and foccusing on overall improved systemwide velocity. Speed and execution are everything... plodding along (at anything) is a recipe for failure if not disaster. All of our customers expect us to respond in seconds (not minutes) and most consider overnight door to door service a basic requirement and nothing special. That's what we're up against..and that's where the money is. Long trains might be fine on dedicated mine runs.. but if you're going to compete on the better paying merchandise freight the service requirements are much higher...there's just no room for plodding along with a bunch of low paying freight.
Don't know who your 'overnight' customers are - by and large, they are not railroad customers that the Class 1's deal with. Where it makes economic sense for the customer and the carrier there are daily turnaround services. The carriers, in the post Staggers era, work with their customers to design services that are mutually beneficial to both parties. Railroads are not competing against UPS and FedEx, they are customers and the railroads are providing those customers the level of service they expcect and demand!
Loose car railroading is a declining business model. Just like Mom & Pop businesses are the decling business model when compared to Wal-Mart. One can hate Wal-Mart all you want - they have become the yard stick for American merchandise sales as they kill small shops wherever Wal-Mart builds stores.
High value consumer products are now being moved in trailers and containers rather than box cars. Trailers and containers are being hauled on designated intermodal trains get expeditied handling and are also charged premium rates.
With the contraction of the American automobile manufacturing business, the JIT warehouse on wheels operations that supplied numerous automobile assembly plants no longer exist as those plants no longer exist.
Check out the 7-day monthly carloadings graph on page 3 of 9 from the UP presentation yesterday...
http://www.up.com/cs/groups/public/@uprr/@investor/documents/investordocuments/pdf_up_boa-slides.pdf
BaltACD Ulrich Bankrupcy wasn't an issue for UP and I don't think D&RGW either to my knowledge. Yes, it was a different era and a different marketplace; however, the same basic tenets of customer service remain true today as they were then. Today, railroads have more leeway in how they run their businesses. They can opt to run long mega trains that tie up everything else in their system and in their path... or.. they can chose the more enlightened approach of running shorter trains and foccusing on overall improved systemwide velocity. Speed and execution are everything... plodding along (at anything) is a recipe for failure if not disaster. All of our customers expect us to respond in seconds (not minutes) and most consider overnight door to door service a basic requirement and nothing special. That's what we're up against..and that's where the money is. Long trains might be fine on dedicated mine runs.. but if you're going to compete on the better paying merchandise freight the service requirements are much higher...there's just no room for plodding along with a bunch of low paying freight. Don't know who your 'overnight' customers are - by and large, they are not railroad customers that the Class 1's deal with. Where it makes economic sense for the customer and the carrier there are daily turnaround services. The carriers, in the post Staggers era, work with their customers to design services that are mutually beneficial to both parties. Railroads are not competing against UPS and FedEx, they are customers and the railroads are providing those customers the level of service they expcect and demand! Loose car railroading is a declining business model. Just like Mom & Pop businesses are the decling business model when compared to Wal-Mart. One can hate Wal-Mart all you want - they have become the yard stick for American merchandise sales as they kill small shops wherever Wal-Mart builds stores. High value consumer products are now being moved in trailers and containers rather than box cars. Trailers and containers are being hauled on designated intermodal trains get expeditied handling and are also charged premium rates. With the contraction of the American automobile manufacturing business, the JIT warehouse on wheels operations that supplied numerous automobile assembly plants no longer exist as those plants no longer exist.
Carloadings for bulk as well as intermodal are way down. You actually made Ulrich's point, namely that his (trucking) customers are different than yours. If the rails do not change their model (bulk, slow schedule, long trains, cost-cutting) their revenues will decline even more. The Staggers Act is ancient history and WalMart and other bricks and mortar retailers are hurting, thanks to internet. If it weren't for groceries, now their biggest sector, WalMart woild really be in trouble soon.
C&NW, CA&E, MILW, CGW and IC fan
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