SAN ANTONIO, Texas – Rail service has been poor more often than it’s been good during the past five years because railroads run too lean and get caught short of crews, locomotives, or both and can’t recover quickly from the impact o...
http://trn.trains.com/news/news-wire/2019/05/24-analyst-penny-pinching-is-behind-prolonged-service-problems-at-class-i-railroads
Brian Schmidt, Editor, Classic Trains magazine
You get what you pay for - that goes to both the customer and to the company that employs the work force.
Customers always think they get overchaged and company's always think their work force is over paid.
What a pyramid to build good customer relations upon!
Never too old to have a happy childhood!
Just think - if the money being paid to hedge fund investors was being used to better the railroad...
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...
Sounds similar to the shippers arguments on paying excessive demurrage or car hire charges because the railroad claims the car is available before it is even on their siding. Which I read the judge in that case asked "Can you as a shipper charge the railroad a demurrage charge if the car is delivered or picked up late". The response was no and the judge said....."I think I can fix that". So lookout ,some more regulations are on their way....heh-heh.
What I found rather disturbing about that whole exchange was the car incurring the extra fees by the railroad was not railroad owned but was privately owned in many cases by the shipper being charged. Not sure how the railroads get away with that twist but it does sound like shippers and the patience of the civil court system is wearing thin.
tree68 Just think - if the money being paid to hedge fund investors was being used to better the railroad...
I guess that's why I'm not an investor.
zardoz tree68 Just think - if the money being paid to hedge fund investors was being used to better the railroad... I never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns. I guess that's why I'm not an investor.
I never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns.
Johnny
zardozI never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns.
See, now, you're thinking long term. These folks could care less about the long term - they want max return, now.
In a way, they're like gamblers - think slot machines. They know that a machine is due to pay off soon, so they play it, and once it pays off, move on. In this case, it's actually easier. You get an EHH in the top seat, under proper control, buy in, then cash out before the sky falls.
Trust me we have had a few people like EHH in the OTR industry also. Trouble is by the time they get caught by the carrier and FMCSA the carrier normally is bankrupt and forced out of business.
Arrow Jevic Falcon and many other companies have all been killed by short term greedy leadership. Except in our industry normally when the driver's find out is when their paychecks bounce and their fuel cards are shut off. Arrow stranded almost 1200 driver's all over the USA when they shutdown right before the holidays.
....will never make the pages of Barrons, Wall Street Journal or any other financial rag.
tree68 zardoz I never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns. See, now, you're thinking long term. These folks could care less about the long term - they want max return, now. In a way, they're like gamblers - think slot machines. They know that a machine is due to pay off soon, so they play it, and once it pays off, move on. In this case, it's actually easier. You get an EHH in the top seat, under proper control, buy in, then cash out before the sky falls.
zardoz I never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns.
That is the hedge fund philosphy - get in, loot the teasury, get out and dump the failure on those that remain. I am amazed that Mantle Ridge is still involved with CSX.
BaltACD tree68 zardoz I never could understand that mentality. If I invested in something, I would do what I could to ensure that my investment stayed in good shape, so it could continue to provide me with returns. See, now, you're thinking long term. These folks could care less about the long term - they want max return, now. In a way, they're like gamblers - think slot machines. They know that a machine is due to pay off soon, so they play it, and once it pays off, move on. In this case, it's actually easier. You get an EHH in the top seat, under proper control, buy in, then cash out before the sky falls. That is the hedge fund philosphy - get in, loot the teasury, get out and dump the failure on those that remain. I am amazed that Mantle Ridge is still involved with CSX.
Especially since their boy has been pushing up daisies for a year now. How much longer before the STB says enough is enough on this bull. From what I have been told from our larger customers that also use railroads is that they are about to all sue them for failing to meet contract obligations. We're talking massive amounts of money in legal action that is about to hit the fan. Companies like Sabic plastic Huntsman Chemical Shell BP GM Ford they are all wanting to see the Class 1 railroads in court.
The railroads have been wonderful for longterm passive investors.. forget about the hedge fund people. If you've been a regular working stiff over the last 20 years and you've diligently saved 10% of your income.. and you've done nothing more than invest those savings in railroad stock and allowed your investment to compound through reinvesting dividends you would be a millionaire today. I guess there is an upside.
What exactly is the relationship between PSR and longer trains? People sometimes indicate that longer trains is one of the facets of PSR. Is it?
In a general sense, I would tend to think that longer trains is in conflict with PSR because longer trains tend to be unwieldy and PSR is all about being nimble, just in time, etc.
EuclidPSR is all about being nimble, just in time, etc.
The whole point of so many recent discussions here is that "PSR" as recently practiced is anything BUT that sort of thing.
The 'precision scheduling' is entirely concerned with knowing where railroad assets are at a given time, and in getting them where the railroad wants by an expected time at an expected cost. To my knowledge, it has little if anything to do with actual 'customer' requirements, or desires: it is strictly for the railroad, by the railroad, and when it is assessed and measured relative to some metric like OR directly, it produces distortions in critical thinking about operations that result in things like the level of 'customer abuse' that is producing such a political backlash.
If, for example, a component of "PSR" was watching and designing efficient response to temporary service interruptions (such as, for example, wrecks or flooding) it would be a Good Thing. But pure-investor stockholders, and managers who think they need to optimize quarterly analyst reports, aren't going to perceive the importance of 'insurance' in the absence of justifying levels of disaster for CYA.
Don't expect this to resolve soon without new regulatory lawmaking. Don't expect it to resolve as a result of any regulatory lawmaking our present or prospective government will make, either.
Overmod, somehow I agree with you. The idea is not to provide good service to customers, but to make money for the investors while quoting Mr. Vanderbilt in the process.
Euclid What exactly is the relationship between PSR and longer trains? People sometimes indicate that longer trains is one of the facets of PSR. Is it? In a general sense, I would tend to think that longer trains is in conflict with PSR because longer trains tend to be unwieldy and PSR is all about being nimble, just in time, etc.
PSR is more about "sweating the assets" i.e. using locomotives, crew, rolling stock and infrastructure as efficiently as possible than about being nimble and just in time. Longer trains are arguably more efficient than shorter ones where all trains regardless of length require the same crew size... overall fewer crews required. But the flip side of that is that customer service has deteriorated as longer trains require more time to build and handle.
There seems to be a pattern to PSR: at first they (the railroads) buy into it with near religious zeal.. and then after the dust has settled they realize that PSR has to be tempered somewhat to bring customer service back from the abyss. CN is a good example.. 15 years ago it was all about pushing down the OR.. now the OR is nolonger front and center, and they're nolonger concerned about it creeping back up to over 60%.. Their recently hired head of ops doesn't even come from a PSR background.. he's from BNSF, one of the last holdouts on PSR. So at CN at least it appears that they've recognized that PSR isn't quite the magic bullet it was portrayed to be 20 years ago. They're moving to a more balanced approach which involves PSR but where PSR is nolonger front and center as most important.
I only ask about the relationship of longer trains to PSR because I have read a lot of articles and comments saying that longer trains are a result of adopting PSR. In many cases, these comments are blaming PSR for the problems caused by longer trains. Maybe they are just doing that because they don't like PSR as being the child of EHH.
I think that's right.. the whole idea of PSR to to drive cost down through efficiency. Running longer trains is obviously more efficient than running shorter ones so long as other factors like service and safety aren't adversely affected.
UlrichRunning longer trains is obviously more efficient than running shorter ones so long as other factors like service and safety aren't adversely affected.
But when you combine two trains and need three crews to get it to its destination...
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
Perhaps where PSR fails is in its emphasis on cost saving over generating revenue. IMHO, PSR assumes a constant income, thus any cost savings will ramp up net profit.
There is also the factor wherein a given type of traffic doesn't generate enough profit. I think we've discussed that the railroads would prefer to dump that traffic, going instead for the high ROI stuff.
I suspect that railroad management finds, once the initial gloss of PSR wears off (or the profit-taking investors lose interest), that they need to keep that "middle ground" traffic, too, in order to maintain long term viability. And perhaps even some low end traffic.
"Penny pinching" is not only tied to freight cars and PSR. The "service" issue is also tied to the railroads as stewards of the lands they operate over and being good corporate citizens. Other parts of the railroad organizations, like Real Estate & Contract are getting depopulated to the point that timelyness and attention to detail is taking a huge beating. If you are trying to cross a railroad with a utility or place a public or private road crossing, you are seeing huge delays caused by a lack of staff (qualified or not) handling the requests and checking to see if the requests meet minimum standard. Shoving the work off to a contractor or consultant often isn't the answer either (competency issue compounded by the ethics of the low bid)...There is a built-up frustration with the railroads that is going to wind up with state** and federal mandates to make the railroads more responsive* and timely in dealing with utilities and non-shippers trying to deal with railroads. Communication is breaking down and it is pretty clear that the beancounter mentality is at the heart of it simply because it is out of touch, relying solely on a spreadsheet that is never looked up from.
(*) does not absolve the utility engineers, municipal and county people from the reckless behaviour that has been around for years near railroads with last minute applications, design blunders/ guessing, and a fundamental difference in design concept (like casing of pipelines, AREMA vs. ASCE, risk management, contract vs. easement, etc.)
(**) Minnesota and Iowa have enacted legislation that will probably be challenged at STB at some point. (state vs federal regulatory control)
zugmann Ulrich Running longer trains is obviously more efficient than running shorter ones so long as other factors like service and safety aren't adversely affected. But when you combine two trains and need three crews to get it to its destination...
Ulrich Running longer trains is obviously more efficient than running shorter ones so long as other factors like service and safety aren't adversely affected.
Probably wouldn't make sense to combine the two trains then. PCR is fine provided (like anything else) it isn't carried to an illogical extreme. Cutting costs to the bone makes no sense when doing so causes customers to leave and revenues to fall.
Ulrich zugmann Ulrich Running longer trains is obviously more efficient than running shorter ones so long as other factors like service and safety aren't adversely affected. But when you combine two trains and need three crews to get it to its destination... Probably wouldn't make sense to combine the two trains then. PCR is fine provided (like anything else) it isn't carried to an illogical extreme. Cutting costs to the bone makes no sense when doing so causes customers to leave and revenues to fall.
Mantle Ridge and their ilk are based on illogical extremes so as to fleece their victims.
UlrichProbably wouldn't make sense to combine the two trains then. PCR is fine provided (like anything else) it isn't carried to an illogical extreme. Cutting costs to the bone makes no sense when doing so causes customers to leave and revenues to fall.
The "S" in PSR does not stand for sense.
Anymore I'm beginning to think it should stand for Stupidity Shameful Suppar Slovonley and some other things I can't list here while remaining PG rated.
Bingo! We have a winner!
Our PSR propaganda talks about securing appropriate business. One can assume(*) that there is inappropriate business. One can also assume(*) that appropriate business would be business that is relatively cheap to handle, i.e. doesn't require a lot of switching. Manifest business requires switching. If they can get rid of as much of it as possible, they look at all the things they can eliminate. Such as yards (maybe even routes), engines, rolling stock, and people. Even though they can make money off that business, I guess they feel they'll be better off by operating a reduced, balanced network. As long as they can announce 'record' profits and a low OR every quarter, they'll be happy.
Jeff
(*) Recognizing the consequences of assuming anything.
tree68I suspect that railroad management finds, once the initial gloss of PSR wears off (or the profit-taking investors lose interest), that they need to keep that "middle ground" traffic, too, in order to maintain long term viability. And perhaps even some low end traffic.
jeffhergertAs long as they can announce 'record' profits and a low OR every quarter, they'll be happy.
Perhaps the trade war will put a dent in the IM business, and then the railroads will have to go begging for business.
For some reason the biggest proponents of PSR believe it has to be implemented quickly.. probably a more gradual change would work better as it would be less of a shock to the system as a whole. Instead of shuttering all the hump yards... shutter one or two.. get used to the adjustment.. and then go from there. Let customers and employees adjust. Pushing PSR through fast is like telling an out of shape 280 lb 55 year old to run six miles because exercise has proven benefits.
UlrichFor some reason the biggest proponents of PSR believe it has to be implemented quickly.. probably a more gradual change would work better as it would be less of a shock to the system as a whole. Instead of shuttering all the hump yards... shutter one or two.. get used to the adjustment.. and then go from there. Let customers and employees adjust. Pushing PSR through fast is like telling an out of shape 280 lb 55 year old to run six miles because exercise has proven benefits.
The reason it has to be done quickly is before the money can be used to benefit the railroad instead of the waiting sharks that are looting the money. Bank robbery is not successful when it drags out over time.
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