dakotafredI must disagree with some of the posters above about "stockholder wants." Which stockholders? Day (or month) traders maybe, but certainly not me. If I find a company I believe in, with (sometimes) a dividend I like, I stick with it until shown a reason I shouldn't. I think the short-term thinking is more on the part of executives trying to satisfy the terms of their annual bonus. Which terms reflect the thinking of the board, about which most investors know precious little. So don't scapegoat the investors, who do make the wheels turn.
Which stockholders? Day (or month) traders maybe, but certainly not me. If I find a company I believe in, with (sometimes) a dividend I like, I stick with it until shown a reason I shouldn't.
I think the short-term thinking is more on the part of executives trying to satisfy the terms of their annual bonus. Which terms reflect the thinking of the board, about which most investors know precious little.
So don't scapegoat the investors, who do make the wheels turn.
Institutional investors - those trading thousands to millions of shares and looking for a return today, not tomorrow or the next day.
Never too old to have a happy childhood!
dakotafred I must disagree with some of the posters above about "stockholder wants." Which stockholders? Day (or month) traders maybe, but certainly not me. If I find a company I believe in, with (sometimes) a dividend I like, I stick with it until shown a reason I shouldn't. I think the short-term thinking is more on the part of executives trying to satisfy the terms of their annual bonus. Which terms reflect the thinking of the board, about which most investors know precious little. So don't scapegoat the investors, who do make the wheels turn.
I must disagree with some of the posters above about "stockholder wants."
Thanks to Chris / CopCarSS for my avatar.
Murphy SidingUnderstood, but the entity that buys several million dollars worth of stocks at a time generally has some different motives than you do.
I could be wrong, but as I recall, computers are playing heavily in the stock trading game - and I would imagine that they are playing nearly second to second, not week to week or month to month.
A million shares increasing in value by $.02 has a yield of $20,000 - time to sell. Do that several times an hour and you're talking some cash. Then multiply by days and weeks. These folks are gamblers, not investors. Investing is for chumps like us.
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...
tree68 Murphy Siding Understood, but the entity that buys several million dollars worth of stocks at a time generally has some different motives than you do. I could be wrong, but as I recall, computers are playing heavily in the stock trading game - and I would imagine that they are playing nearly second to second, not week to week or month to month. A million shares increasing in value by $.02 has a yield of $20,000 - time to sell. Do that several times an hour and you're talking some cash. Then multiply by days and weeks. These folks are gamblers, not investors. Investing is for chumps like us.
Murphy Siding Understood, but the entity that buys several million dollars worth of stocks at a time generally has some different motives than you do.
WE are sort of getting out into the 'weeds', but stock value, and Returns on Investment definitely come into play as a corporate decision is made about how as railroad manages its system.
Seems that tree68 and Murphy Siding make some pretty valid points about stock trading in this day and time; particularly, where computer programs are used to make almost instaneous trades, activities can be keyed for the computer to 'move' when perameters are set for it. A couple of triggers might be stock volumes trading or limits as to pricing.
dakotafred seems to fall into a group that would be 'traditional traders(?)'. A system that works for his needs and goals. My position is more of interested bystander, A couple of times, acting on good friends, I did invest, and got a lesson learned the hardway.
To reinforce tree68's point about buying and selling here is some information: @http://www.investopedia.com/terms/a/averagedailytradingvolume.asp
This link has information:based on average daily volumn and its effects on a couple of examples: http://www.investopedia.com/articles/active-trading/091514/essential-strategies-trading-volume.asp
Day trading, programmed trading, options trading are just extreme examples of the casino, aka, the stock market. Unless you purchase an IPO or some new shares released by a corporation, you really aren't investing in the company in the sense that you are adding to its capital, even if you hold them for twenty years. You've only bought that capital from a prior owner, i.e., a transfer. Along the way, you may receive some dividends.
C&NW, CA&E, MILW, CGW and IC fan
samfp1943Lots of options to build on, some existing railroad infrastructure; there would seem to be plenty of 'opportunities', but everything would be likely to 'shake-out' differently, if the ownership of the railroad routes see changes in mergers and acquisitions?
If sam (a clever non-railroader) can envision many possible targets (routes and services) for revenue growth, it shows that it is possible for the rails to do so, but only if they hired folks with some vision who were given a mandate.
samfp1943 kgbw49, asked: "...So it begs the question - why can't BNSF develop that intermodal lane right now?.." For starters, BNSF does not connect in Georgia, except by trackage rights (Location at Fairburn,Ga: I suspect is a facility to load unload autos(?) not sure about TOFC there(?). The line in Fairburn,Ga. [IIRC ] is CSX. BNSF terminal in Birmingham, is former SLSF (from Memphis,via Amory,Ms). Once in Memphis, a connection could be made, at W. Memphis,Ar. area (Marion,Ar(?) to the former SL-SF ' River Line' North to St.Louis, and then North to Minneapolis-St.Paul. The questions then would be: Is this route on the River Line cleared for 'Double-Stacks'? Or is it 'heavy' enough to support the extra traffic ? My recollection is, it might be classed as a 'secondary line', except for the steel mill traffic south of Osceola (Armorel),Ar. area(?) An NS/BNSF Routing could be made North to a BNSF Connection in Southern, Ill. { NS runs or used to daily service through Jackson,Tn to St.Louis, and Chicago via a connection in Centralia,Il. -(Not sure how they would welcome another 'dance partner' on that service?) CSX is in Jackson,Tn. as well. Then there is another potential connection at Jackson,Tn. with the West Tennessee RR (It operates between Corinth, Ms (on NS) and The Fulton,Ky area. (CNR)
kgbw49, asked: "...So it begs the question - why can't BNSF develop that intermodal lane right now?.."
For starters, BNSF does not connect in Georgia, except by trackage rights (Location at Fairburn,Ga: I suspect is a facility to load unload autos(?) not sure about TOFC there(?). The line in Fairburn,Ga. [IIRC ] is CSX. BNSF terminal in Birmingham, is former SLSF (from Memphis,via Amory,Ms).
Once in Memphis, a connection could be made, at W. Memphis,Ar. area (Marion,Ar(?) to the former SL-SF ' River Line' North to St.Louis, and then North to Minneapolis-St.Paul.
The questions then would be: Is this route on the River Line cleared for 'Double-Stacks'? Or is it 'heavy' enough to support the extra traffic ?
My recollection is, it might be classed as a 'secondary line', except for the steel mill traffic south of Osceola (Armorel),Ar. area(?)
An NS/BNSF Routing could be made North to a BNSF Connection in Southern, Ill.
{ NS runs or used to daily service through Jackson,Tn to St.Louis, and Chicago via a connection in Centralia,Il. -(Not sure how they would welcome another 'dance partner' on that service?)
CSX is in Jackson,Tn. as well. Then there is another potential connection at Jackson,Tn. with the West Tennessee RR (It operates between Corinth, Ms (on NS) and The Fulton,Ky area. (CNR)
I haven't done an analysis of actual traffic, but the old Frisco "river line" seems underutilized. I don't know the reason, but I seldom see a train on there, and when I do, it's a medium length manifest with old power on the front.
L & N used to have a line that came off the Memphis-Nashville line at about the midway point and ran north to Paducah. They swapped cars with the CB & Q, that came down from Centralia. In the early 1980's, the L & N line was abandoned. I don't know if that connection would have been of use to the BNSF and CSX today or not. The BNSF Centralia line still has a bunch of BNSF and UP PRB coal for river barges and power plants in the area, but no intermodals of any sort.
BLS53 wrote the following post[in part].
Check out this link @http://www.abandonedrails.com/Hardin_Southern_Railroad
The line in question is the former NC&St.L RR from Paris,Tn. to Paducah,Ky.
[This site is of interest if tracking abandonments in Tenn:] http://www.abandonedrails.com/Tennessee
3.6M
U S Loads Analyzed
607K
BNSF Network Opportunities
325K
Savings>5%
113K
OTR Conversions
samfp1943 BLS53 wrote the following post[in part]. Check out this link @http://www.abandonedrails.com/Hardin_Southern_Railroad The line in question is the former NC&St.L RR from Paris,Tn. to Paducah,Ky. [This site is of interest if tracking abandonments in Tenn:] http://www.abandonedrails.com/Tennessee
Yes, it was a NC & StL line. L & N bought them in 1957. The Hardin Southern ran a tourist train from Hardin Ky to Murray KY for awhile, but went out of business about 10 years ago. There's a shortline (KWT) that operates south of Murray into Tennessee that connects with the CSX. The track north of Hardin (about 40 miles worth) into Paducah, has been removed for over 30 years.
BN is basically a western railroad.They have no connection to the southeast like NS does thru Southern Railway
Kielbasa The CSX terminal in Fairburn, Ga is in fact a rather large intermodal ramp. Almost exclusively BNSF power in there, with CSX people running the operation. About a year ago they underwent some improvements and BNSF had to reroute traffic to Memphis and dray our boxes to Atlanta on their dime. Pretty nice facility as far as they go, they could easily handle the added traffic if needed.
The CSX terminal in Fairburn, Ga is in fact a rather large intermodal ramp. Almost exclusively BNSF power in there, with CSX people running the operation. About a year ago they underwent some improvements and BNSF had to reroute traffic to Memphis and dray our boxes to Atlanta on their dime. Pretty nice facility as far as they go, they could easily handle the added traffic if needed.
There is BNSF staff on the ground in Fairburn. You might call it a joint BNSF/CSX facility. BNSF originates a significant amount of UPS traffic at Fairburn, much of it bound for LA, Oakland, Seattle.
cat992c BN is basically a western railroad.They have no connection to the southeast like NS does thru Southern Railway
BNSF has its own tracks to Birmingham. After that ~150 miles of CSX trackage rights puts BNSF in Fairburn, GA. Why BNSF has never leveraged its Atlanta connection more fully is a head scratcher.
cat992cBN is basically a western railroad.They have no connection to the southeast like NS does thru Southern Railway
Five words for ya, buddy: Ship it on the Frisco.
Seems like a good "Trails to Rails" project!!
https://www.traillink.com/trail-history/silver-comet-trail.aspx
iowahsrail BNSF has its own tracks to Birmingham. After that ~150 miles of CSX trackage rights puts BNSF in Fairburn, GA. Why BNSF has never leveraged its Atlanta connection more fully is a head scratcher.
kgbw49So it begs the question - why can't BNSF develop that intermodal lane right now?
Having just read the article in question, I got the impression that the author used the Minneapolis-Chicago-Atlanta cooridor as an example because it suited the distance parameters of the the concept he was illustrating (the donut hole). Not that business demand justified it.
466lex indicates 40-50 loads per day. That doesnt cut it.
Recall that NS ran the Triple Crown into Twin Cities via the UP. I saw that train a few times crawling thru Chicago. No doubt the TCs went to Ft. Wayne where they were split up for Detroit, East Coast and the Southeast. So...there was single line intermodal service recently, in the form of Triple Crown.
Ed
If we are talking 50 containers/day - with 5-pack stack cars - that is 5 car loads or approximately 3000 feet of train. My carrier wants to run their intermodal trains with upto 14000 feet of train.
People don't understand the recurring volume necessary for a rail line/service to be profitable. If you have between 150-200 truck/containers per day then you are starting to talk about business worth serving and making a profit from.
So it appears that Twin Cities - Atlanta will probably not support an intermodal train.
This goes to prove that not every lane is going to be viable.
BaltACD If we are talking 50 containers/day - with 5-pack stack cars - that is 5 car loads or approximately 3000 feet of train. My carrier wants to run their intermodal trains with upto 14000 feet of train. People don't understand the recurring volume necessary for a rail line/service to be profitable. If you have between 150-200 truck/containers per day then you are starting to talk about business worth serving and making a profit from.
If the service were there, 2-3X per week it could grow. I wonder what the cost/revenue numbers actually are? It seems like the rails have boxed themselves into a shrinking niche of trainload-only services.
schlimmIf the service were there, 2-3X per week it could grow.
The only thing about this is that I think the opportunity cost of the equipment investment factors in, somewhat as it does for the airline industry.
If you're devoting a consist to a dedicated route (which may be serving more than one lane, but explicitly doesn't involve switching out the actual intermodal consist itself) "2x to 3x per week" you have to decide what the other use of that consist might be, or if there are better uses for the consist or some of its cars in other, more established, lower long-term risk operations. If the consists are to be used for other purposes, or made up on a kind of ad hoc basis when expected, you'll need appropriate reserve capacity in or near specific locations to maintain expected QoS -- as opposed to trains running in routings or lanes that support more of their full capacity frequently, or that for some reason involve lower cost or higher profit margin than the periodic service.
In passing, I'd say that railroads want to keep trainsets together and operating as much as possible, with as little switching of baretable or loaded consists as possible. And that translates to me into a preference for 'trainload-only' services, with the trainload perhaps adjusted for a given lane's capacity or importance, but quantized at some minimum level for engine power and ruling train or route resistance. It would be nice to be able to run intermodal consists comparable to what Perlman was proposing for the Western Pacific, more likely now with better single-locomotive reliability but still governed by the effective use of the higher nominal horsepower (perhaps also evaluated per dollar capital cost of a more complex) modern locomotive. If we get to reliable one-man-crew operation, it might reduce the requirements for railroad acceptance even further. But I don't mind predicting that services like this aren't really catching on, and in some services (I'm thinking particularly of the Meat Train and its problems being dispatched on a congested railroad) the necessary use of a dispatching 'slot' for a shorter and perhaps faster consist might be problematic.
Several of the available intermodal options might be considered: I think I have already mentioned the British CargoSpeed (with van trailers) and there are methods of gang-shifting containers very rapidly between parallel consists (moving and indexing the trains slightly when needed to fill gaps or to put containers in given sections of the consist to optimize whatever last-mile intermodal transfer is going to be used). In my opinion you will NOT see any version of this that works with RoadRailers (because of the issues with handling the intermediate trucks) or with RailRunners (because of the tare weight if handled as trailers, and the substantial capital outlay for 'inferior' performance if used as blocks for regular intermodal service between specific use as trailers).
The alternative usually involves what independent truckers (or specialty truck lines) would charge to move the commodities, using more normal intermodal service between established intermodal facilities or moving in established lanes. Over a time period long enough to become established as a service option, through whatever changing climate or traffic conditions may prevail, with a guarantee of subsidy to keep the operation running in lean periods, or through unanticipated interruptions, or until a critical mass of actual traffic has built up. I can understand why generally-conservative railroad traffic management prefers to keep its efforts where profitability is already well-established, and leave much of the innovative models to 'someone else to try first'. As with DRAM chip production in the '80s, if one railroad tries it and succeeds, expect to see it used in other places ... and if you don't, look carefully at any special conditions or at the people involved.
There have been a number of posts that I think provided reasonable cost/revenue data for intermodal consist utilization ... or provided enough of the conditions or options involved to rule out any meaningful quantization of cost-benefit for situations without hard or empirical data.
After seeing CSX hustling eastbound through Utica with an IM train last week, though, I have to wonder.
One locomotive, one 3-pack, each with one container. Musta been hot...
RMEME wrote the following post 2 hours ago: schlimm If the service were there, 2-3X per week it could grow. The only thing about this is that I think the opportunity cost of the equipment investment factors in, somewhat as it does for the airline industry.
Opportunity cost tends to get used to protect the status quo. I'm talking about a small trial (probably a small loss) with an eye on growth medium term, using existing, maybe underused equipment. If growth does not happen within X months, D/C it. If you want growth, you need to take some risks. Likely there is unused capacity on some routes, given the decline in coal and Bakken oil. Other folks with experience in railroad marketing, like Greyhounds, have had ideas.
RMEBut I don't mind predicting that services like this aren't really catching on, and in some services (I'm thinking particularly of the Meat Train and its problems being dispatched on a congested railroad) the necessary use of a dispatching 'slot' for a shorter and perhaps faster consist might be problematic.
Good Grief! Who ever suggested a "Meat Train" be dipatched on a congested railroad? Certainly not I! (This will eventually get back to the Minneapolis-Atlanta opportunity.)
The OP cited a Trains article about future mergers. Contained in this article are two important quotes:
"It's a network business, and the larger the network the more valuable you are to customers." -- Rob Krebs
"It appears that the industry is in zero-growth mode at brest, so at some point new markets must be created." -- Jim McLellan
So we've got a network business (railroads) in need of traffic growth but we also have people, such as RME, who find new business "problematic" because it will add phamtom trains, trains never proposed but imagined, to a congested network. I'll ask again, who ever proposed adding a "Meat Train" to a congested line? My experience with operating officials is that they would just make stuff up to avoid handling new business. The less there was to haul, the easier their jobs were.
What I have said is:
1) There is a large and growing concentration of red meat production centered at Sioux City, IA. (also in the area are a large turkey plant and significant egg/processed egg product production)
2) This food moves in large steady volumes both eastward and westward.
3) The CN has a greatly underutilized line through Iowa that is well located to handle the eastbound business.
4) The CN has absolutely no interest in developing this business. They'd rather have a greatly underutilized rail line than provide intermodal service to Sioux City. A reason for this disinterest is cited in the subject article, it's only a 500 mile haul for CN and that causes them to dismiss the opportunity. But, in total, it's a 1,200+ mile haul where rail can be fully competitive with trucking.
5) There is no congestion on the CN Iowa line. It's pretty empty. And that's where the only "Meat Train" I've ever talked about would run.
At Chicago (a hub) the containers/trailers would be street transferred to eastern rail carriers and moved on existing intermodal trains to various destinations. None of this would be hard to do. And none of it would add trains to "congested" rail lines. Adding revenue loads to existing trains throws money to the bottom line big time. Adding a train load of revenue to an underutilized line (CN) does the same thing.
Minneapolis is in the same situation as Sioux City. It generates revenue loads but the loads are going to diverse destinations, including Atlanta. Minneapolis and its destinations are "Nodes" on the network. Very few nodes on the network have enough business between themselves (one origin-destination pair) to support dedicated intermodal service. That was one of RoadRailer's big problems.
So the containers/trailers must go through a hub. The hub doesn't have to be Chicago, but you've got to take all eastward/sothward traffic from/to Minneapolis and aggregate it into a train or trains running from/to a hub. At the hub the loads are sorted and placed on trains to destinations.
Markets such as Sioux City and Minneapolis must be developed and used to feed/distribute business to be handled on trunk line trains. The trunk line trains need only to get longer. They do not need to be more frequent and add to congestion.
CNSFyou need to aggregate for a market as small as Minneapolis. Atlanta alone won't cut it, but it might get interesting if the same train also served Memphis and Birmingham. That would seem to be a natural, except for one thing which I don't understand. A glance at BNSF's service map shows that they don't run any intermodal trains down the river line between Galesburg and Memphis. To get into the southeast from Minneapolis on their current intermodal service routes, you have to detour way west through KS and OK. That adds too much circuity (thus time and cost) to be competitive with truck over that length of haul. I don't know why they don't use the river line for intermodal (clearance issues?) but that seems to me to be the whole crux of it. If that line was open for intermodal there would be many possibilities and I suspect we'd see BNSF pursue at least some of them.
Yes. And this need to aggregate markets reinforces the need to purchase the available freight movement data. (Information can't hurt you.)
Good marketing people with this information, some vision, and a knowledge of what the railroad can do well can come up with a conceptual plan to deveop the Twin Cities markets. That's markets, as in plural. Twin Cities-Atlanta alone won't do it. But Twin Cities to/from the whole south just might be viable. The purchased data would give the railroad a down and dirty quick answer. (I wonder how many loads of chicken move from North Georgia to Minnesota. Georgia is the number one state for chicken production.)
IF the business is there the route looks promising. BNSF has a pretty straight shot between the Twin Cities and Centrailia, IL. There division map at least shows they have trackage rights over the CN between Centrailia and Memphis. That's a pretty non circuitous route that avoids any St. Louis congestion. (Unless they want St. Louis on the route for origin/termination of loads.)
http://www.bnsf.com/customers/pdf/maps/div_sf.pdf
A preliminary analysis of the potential could be done quickly and cheaply if the data was made available. (and the marketing people had some "cojones".)
Our community is FREE to join. To participate you must either login or register for an account.