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The Final Decade

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The Final Decade
Posted by ttrraaffiicc on Thursday, April 2, 2020 10:17 AM

This will be the final decade of railroading. At least, I think so, and there is a lot of evidence to back me up.

There is only one reason that a shipper would ever use rail, and that is to save money. Railroads have a laundry list of disadvantages compared to trucks, more than I want to get into here, but I will name a few key ones. These are service (railroads are a nightmare for customers and we all know this) and speed (rail is eye-wateringly slow, taking orders of magnitude longer than road delivery). These disadvantages are deal breakers for the vast majority of businesses. The reality is that if a shipper can afford to shift to trucks, they will. The advantages are just too much to ignore. But of course, not every industry can afford to, but this will not be the case for much longer.

New trends in the trucking industry like automation and electrification are on track to massively slash the costs of trucking and completely wipe out any price advantage rail once had. Electrification will cut maintenance and fuel costs (while also eliminating the environmental arguement for using rail), and automation will eliminate most labour costs, while also greatly decrease transit times and increase asset utilization, meaning few trucks can do the same amount of work. People will often say that these things are a long way off, but they will be here in just a few short years. Trucks like the Tesla Semi which are set to bring about these changes are launching this year.

So what will this mean for the railroad industry. In no uncertain terms, death. In theory, rail could do some things to respond, but they won't happen. Electrification is a possibility, but it will never happen as it requires too much of an initial investment. Automation is also a possibility, and many will point to Rio Tinto in Australia as an example. The problem is, while there are level crossings and most other things that make it comparable to mainline railroading, it is in a sparsely populated region. This means that, not only are the chances of an accident far lower, but so is the liability. Trains require too much stopping distance to make it possible to automate on mainlines. Let's also not forget that because fuel and labour make up a larger portion of trucking's costs compared to railroading, that even if they both automate at the exact same time, trucking will still be at an advantage. Let's also not forget that a greater investment in trucking technologies means that trucks will electrify and automate well before railroads ever do, and that means the damage will be done.

What is the most likely outcome going forward? I foresee that this decade and the next will make the 1960s and 1970s look like a golden age of railroading. It is likely that if any railroads survive, they will be greatly diminished, with most trasncontinental and mainline routes being abandoned with the remaining ones hauling very little niche specialized freight. But even this much is unlikely to survive. The economic advantages of autonomous trucking are just too great. Railroads are being made obsolete, but hey, after almost 200 years, rail had a good run.

More good reading:

Art-Invest
https://ark-invest.com/research/autonomous-trucks

Bill Stephens
http://cs.trains.com/trn/b/observation-tower/archive/2020/03/17/the-autonomous-barbarians-are-at-the-gate.aspx

Clean Technica
https://cleantechnica.com/2020/02/16/tesla-semis-are-cheaper-than-rail-enough-of-the-time-to-reshape-ground-freight/

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Posted by Euclid on Friday, April 3, 2020 11:48 AM

I think you dismiss railroad automation too easily, and that you exaggerate the successful revolution to driverless trucks.  The latter is just a concept that springs from the concept of driverless cars.  Good marketing includes exaggeration and nobody does it better than Elon Musk.  So, I think the driverless truck bandwagon has merely jumped onto the driverless car bandwagon, and both are presented as utopian solutions.

On the other hand, I believe that driverless trains are in the very near future.  The central beauty of that concept is that the railroads own their corridors; whereas driverless cars and trucks must share a nationalized corridor.

You dismiss railroad automation because of the grade crossing problem.  I have heard that argument 1000 times.  You just can’t have driverless trains passing over public grade crossings.  Why is that? 

You say the stopping distance of trains is too large for allowing them to run crewless across grade crossings.  Yet, what on earth does the crew have to do with mitigating the dangers of a long stopping distance?  You might say that it is the engineer’s job to spot a developing conflict at a grade crossing in a way that automation cannot accomplish.  I would submit that automation can include grade crossing conflict development sensors that would be vastly more capable and reliable than the skill of the engineer in spotting the potential grade crossing conflicts.  Rio Tinto uses sensors for that purpose.  They don’t just rely on the fact that they are in remote areas seeing sparse road vehicle traffic.

This argument you use to dismiss railroad automation based on grade crossing danger sounds just like the argument that the labor unions make on that same issue.  I don’t see the substance.  Everybody knows that trains require a lot of stopping distance, and engineers are powerless to overcome that problem. Then suddenly comes along the new idea that crews are needed on trains to prevent grade crossing collisions. 

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Posted by Overmod on Friday, April 3, 2020 12:00 PM

ttrraaffiicc
New trends in the trucking industry like automation and electrification are on track to massively slash the costs of trucking and completely wipe out any price advantage rail once had.

You must not have much practical experience in engineering, or the trucking industry.  There have been some particularly good threads here in the past few years on the topic, and although the [expletives deleted] community-search tool remains broken, you might want to see if you can find some of them.

Until autonomous trucking solves the issue of prompt recharge, the idea that existing infrastructure can handle the overall supply of current and the access to 'megacharging' facilities is ridiculous.  Capital costs of this one factor alone handily wipe out any putative savings from "electrification" well out into this tech cycle; we won't get into battery maintenance, accident recovery, or all the myriad other factors that go with obligate BEV for class 8 vehicles.

The great advantages of autonomous operation are in solving the driver-shortage and operations issues, and in allowing nominally shorter headway, platooning, and 'railroad-like' GPS enablement of predictive operations to save fuel or minimize operating 'wear and tear' enroute.  The great problem is in financing all the necessary technology, infrastructure, practically-vetted GIS, cost-effective differential HA, and a variety of other things that are practically needed for operating large fleets of trucks on ordinary roads.  You sure won't find your cell-phone carrier allowing easy monthly payments and two-year upgrades on all that!  

And then there are the consequences of the first, and then the second, and then more, high-profile accidents regarding multiton autonomous trucks -- and the probable demise of the company or companies responsible on paper for them.  Look for all-time high insurance premium coverage, probably expediently jacked up every time there's a key change in scope or "another" issue that current autonomous systems can't address effectively.  Look also for an increasing amount of rapid-response calls to service the breakdowns, or just the 'that-does-not-compute' failsafe or nongraceful-degrade stoppages.

I wish someone at Trains would dust off some of the old Kneiling columns, as one of the potential 'salvations' for rail technology comes as soon as more effective truck transportation actually does start cutting into PSR-finance-driven-incompetence operating models for railroads.  Use of autonomous systems in rail, once you go, say, to an iron-ocean model of access and provide a proper system of autonomous last-mile chassis for prompt and effective intermodal transfer where and as needed, is both easier and less expensive than its counterpart for on-road operations (just as it is for aircraft, although some of the details are different).  It would be nice to be able to say (as I suspect you will try) that cost of the technology involved will drop by orders of magnitude as the technology becomes established -- the problem here being that only a subset of the autonomous solutions for passenger vehicles translate into effective answers for heavy freight.

In my opinion, you won't see much long-term utility for full-BEV semi-trucks, certainly until someone addresses the baseline and peak power networks needed to support them in large markets.  By contrast, both point-recharge facilities in a few fixed locations, for hybrid locomotives, and provision of even dual-mode-lite sectional catenary represent much more effective uses of capital and resources in lowering 'carbon cost' and ensuring prompt operation of key railroad links.

You are certainly correct that insofar as 'last-mile' delivery of loose-carload merchandise to small shippers is concerned, better trucks will produce a relatively large decline in rail use.  That is a segment that most railroads appear to be trying to shuck except when it is just the kind of 'captive' business that will jump quickest when a more convenient alternative at the same effective price presents itself.

The idea that expensive autonomous trucks will be used for bulk mineral or grain traffic is frankly laughable.  It's like the old retail argument that 'what we lose on margin we'll make up in volume'.  When we see fairly savvy capitalist bankers make bids on obsolescent things like Tennessee Pass ... for their ongoing bulk traffic from agricultural operations, I think naive writing-off of railroads 'in general' is not a very wise, and certainly not much of an accurately futurist, perspective.

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Posted by Murphy Siding on Friday, April 3, 2020 1:00 PM

 

  Thought provoking concept but missing reality on several levels. Railroads will change, but they’re not going away in our lifetime. Bulk commodities like coal, grain, ethanol, chemicals, rock, etc. that are price sensitive but not time sensitive will continue to move in unit trains.

     Wild numbers: a 110-car unit train would need to be replaced by approximately 450 semi-trucks. Figuring 80 feet per truck with 80 feet between them, you have a line of trucks about 13-1/2 miles long. Which state has an overabundance of highways that they are willing to have worn out by so much more truck traffic?

      How much would it cost to purchase 450 semi-trucks and trailers? Quick look online puts it between $63 million and $79 million.

     Multiply the above numbers times the number of unit trains hauled annually and the whole premise falls apart.

 

Thanks to Chris / CopCarSS for my avatar.

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Posted by chad s thomas on Friday, April 3, 2020 1:25 PM

Railroads are far more efficient then highways. The exception being short distance (first mile / last mile). Unless someone invents a economical teleporter (ala Star Trek) railroads are not going away anytime soon.

Highways are mostly at capacity right now. They would need far more capitol for expantion then railways would. And that's if they could even find the real estate.

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Posted by Paul Milenkovic on Friday, April 3, 2020 6:55 PM

Overmod:

One of the things Kneiling was promoting was a cheap intermodal terminal consisting of a siding with road running along the side along with the Stedmann side-transfer device.

There have been all manners of intermodal Golden Bullets from Iron Highway to RoadRailer.  Don Oltmann has been skeptical of the side-transfer intermodal truck chassis (the railroad spine car -- doesn't work with double-stack -- is passive) although I haven't been able to press Don on specifics.

I agree, if there is a place to try out an autonomous system, it would be in the fenced-off intermodal yard.  It is in the intermodal interface where you incur cost and slow down the door-to-door time.  This is true where you ask motorists to park their car and then take a train.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by matthewsaggie on Friday, April 3, 2020 9:04 PM

This dude just joined the forum today and this is his second post. He joined just to drop this diatribe on us? I would like to know more about his interests in the subject.

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Posted by zugmann on Friday, April 3, 2020 10:29 PM

Sounds like a typical dime-a-dozen truck lobbying blogger.   

 

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

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Posted by jeffhergert on Friday, April 3, 2020 11:13 PM

All this self-driving or platooning of trucks leads me to this question:  "who's going to use it?"  When I travel I-80 in western Iowa most of the trucks I see belong to small carriers and owner/operators leased to carriers large and small.  I do see larger fleet carriers, but often they aren't close together.  I think those techies (like Elon Musk) now how to make the equipment, although I don't think it's at the level they claim, but don't know how the industry works.  And the general public also don't know how that, or any industry really works.  They, the public, depend on "journalists" who think they know how everything works to inform them.  And think everything they see on the TV or internet are how things are.

Now I could see some use by the LTL/package carriers who have regular routes between sorting terminals.  That might impact the railroads.  Even with a crew on board the trains, the productivity that rail can provide still could might beat a driverless truck.  The road carrier will have to decide which is better, using rail or investing and maintaining autonomous equipment for all highway movement.  IF the railroads can provide the service level the trucker wants, rail will be OK.  That big IF is the real thing facing the railroads in these PSR, shareholder value over all else times.

Jeff 

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Posted by NorthWest on Friday, April 3, 2020 11:24 PM

ttrraaffiicc
Automation is also a possibility, and many will point to Rio Tinto in Australia as an example. The problem is, while there are level crossings and most other things that make it comparable to mainline railroading, it is in a sparsely populated region. This means that, not only are the chances of an accident far lower, but so is the liability. Trains require too much stopping distance to make it possible to automate on mainlines.

So the reason we can't automate trains is because they might have level crossing accidents?

I thought automated cars/trucks were supposed to prevent accidents?

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Posted by tree68 on Saturday, April 4, 2020 7:17 AM

I see two mile long IM trains among the 50-60 trains passing the camera in Deshler each day.  That's several hundred trucks equivalent.

I see mile long trains of autoracks on the cam as well.  That's over a hundred trucks.

The highways can't handle it.

LarryWhistling
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Posted by Euclid on Saturday, April 4, 2020 7:21 AM

This reason of grade crossing safety is widely used by those who oppose automatic trains. They are mostly the fans, the labor unions, and operating employees who's jobs are threatened by the automation.  I too would guess that the OP is promoting trucking over rail, and appears to be aruging that rail will not be able to automate, whereas automatic, platooning trucks will the lead to the ultimate triumph of trucks over trains. 

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Posted by Overmod on Saturday, April 4, 2020 10:01 AM

Paul Milenkovic
One of the things Kneiling was promoting was a cheap intermodal terminal consisting of a siding with road running along the side along with the Stedmann side-transfer device.

He seems to have missed the obvious improvement, which I made in the mid-Seventies, of providing an intermediate stage of modified adjustable scaffolding and directional rolls permitting gang-loading and unloading at any particular stop.  The trucks would then 'address' the individual dock locations with appropriate asynchronicity without holding up the train...

I was relatively 'green' at the time; just as I trusted Kneiling with how to spell the le Tourneau loader's name, I trusted him on Stedman.  He didn't do right in either case.  (But he knew which end of the Arm had the armaments...)  The 'Steadman ratcheting side-loader' was billed as a sufficient side-transfer device for the truck-loading 'side', and I took it as gospel that the thing worked ... after all I'd read it in Trains, The Magazine of Railroading, and they'd surely fact-check anything they published...

The interesting thing, looking back in reference, is that my whole system even in the mid-Seventies was ISO series 1 container-centric.  Even then I assumed ocean shipping would provide the bulk of the actual container construction, and would keep the standardization within bounds and not allow 'creeping proprietariness', and allow relative standardization of the equipment required together with, um, a reasonable guarantee of resale value should any particular operator go belly-up (you can tell who'd been reading that book On Time! with its accounts about why F units might be approved for near-moribund railroads based on fungibility...)

Amusingly, I assumed that the underframes involved would be FuelFoiler-style skeletal, although not fully 'spine' simplified.  I noticed yesterday that one of the major private ROW contractors now has a circus-loading train converted from well cars with simple decking... this approach would work even better for single sideloading with older costed-down equipment sets...

There have been all manners of intermodal Golden Bullets from Iron Highway to RoadRailer.

Systematize some of them and you still might have systems that work ... in particular lanes.  The problem has been, and probably will continue to be, in the lowest-dollar nature of much of the available business, and in too much dependence a la late big steam on certain proprietary vendors who go out of business and make both the IP and the spare parts disappear.  You could certainly say the same about the whole 'Portager' class of equipment even after Wickens figured out first how to make it track and then how to build it cheap.  

The point of asynchronous sideloading is that it accomplishes what very few other intermodal systems can: it practically allows a large number of potential stops to last-mile distribution points to be established and then maintained for very little money, while having only transient influence on PSR-era overall train timings.  The dwell at any particular 'stop' for the train and its crew, provided there is enough scaffolding, is little more for multiple containers than it is for one; any delay due to 'cheap truck equipment' is handled later -- at the sole convenience of the trucker or the line that might be employing him or her -- and does not affect all the other rail customers involved. 

Don Oltmann has been skeptical of the side-transfer intermodal truck chassis (the railroad spine car -- doesn't work with double-stack -- is passive) although I haven't been able to press Don on specifics.

I was very, very careful to avoid anything that smacked of 'lumping' in the scaffold-to-truck transfer.  As you know from looking at the patents, the actual Steadman systems weren't particularly 'automatic' with regard to safe arm extension and retraction, locking and stabilization between truck underframe and scaffold, power and instrumentation provision, or twistlocking (and unlocking and retraction) at appropriate points.  I don't consider these 'showstoppers' but they wouldn't be cheap, and many, many early adopters are likely to be cheap...

I agree, if there is a place to try out an autonomous system, it would be in the fenced-off intermodal yard.  It is in the intermodal interface where you incur cost and slow down the door-to-door time.

And of course this is precisely the point where it shouldn't!  The whole premise of the gang-transfer systems like the 'old' CargoSpeed was to minimize dwell at the actual intermodal transfer point -- even the idea of there having to be a 'yard' where cuts of cars were shoved around and purpose-built tractors were shuttling around pulling trailers off ramps is a bit 19th-Century -- and the idea that switching to little ramps all over the place was stunningly discredited decades ago (and, I think, every time it has been reintroduced since).  

Now, one other thing Kneiling touted was a concept eminently suited to 'future' autonomous design: the idea of modular self-propelled trains that would separate and join 'on the fly' to service alternate points and routes.  In his day the necessary autonomous guidance was essentially science fiction; today it is available.  There are even suitable underfloor combustion engines that package in place of his turbines, and of course all the space for hybrid batteri and their insulation and conditioning you could need...  Such equipment could easily be applied to ramps, even to the point of carrying its own low-duty-cycle loading equipment carried on the equipment and ballasted with liquid stored in onboard tanks.  All this tech is now decades old and probably out of patent.  This applies particularly to the -- I think longer-extended than folks like ttrraaffiicc would care to admit -- period where true autonomous tractors are only found in certain areas of support, operating within a limited radius outside of established-traffic lanes.

This is true where you ask motorists to park their car and then take a train.

If you limit yourself to the (somewhat idiotic) model that all the cars and all the passengers have to travel in the same enormous train, at enormous-train speed with enormous-train handling fun.  

Probably the correct model is that the passengers arrive at a valet-like portico where they have their essential 'trip' baggage taken off and checked, and receive their claim check.  They then proceed to departure lounge, etc. -- get on their passenger train, ride it to destination... and, should their car not quite 'be there on time', get free Uber Black or comparable service to their Air BnB or wherever, and equally free transportation back to pick it up when and where it comes in.

Let the skilled drivers or equipment operators handle the loading expediently, let the cars travel at best 'car speed' (properly secure, of course, so the car alarms don't go off on rough track...), and have skilled drivers and equipment operators handle the unloading expediently.  Probably best if the passengers aren't waiting for their car to 'come out of the garage' ... even in times where social distancing hasn't become a convention.  More than sausages and laws share the applicable  characteristic.  The key is perceived service ... just as with Acela, and Markkula and Jobs taught us that service is very often what you tell people it is, and then execute properly as told.

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Posted by ttrraaffiicc on Saturday, April 4, 2020 5:32 PM

A lot of good points from this discussion, but I certainly think we can all agree that IFrail survives, the majority of its market share will be lost.

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Posted by Paul_D_North_Jr on Sunday, April 5, 2020 6:41 AM

Now this is has turned into a fascinating thread - too bad it doesn't have an appropriate title. 

The modular self-propelled train (think what we now call a "block" of cars, only with its own power, like a DPU) could work just fine with intermodal now. 

Not sure I'm following all your comments on the technology of truck-based unloaders, particularly that they can't handle double-stacks? (if I understand that one correctly, which I might not have)  Care to offer any comments on these: 

https://hammarlift.com/why-sideloader/ - mostly about singles, but at the bottom right looks like it can be equipped for handling 2 high - not sure if it will go high enough for the top box up on a rail car, though 

https://www.steelbro.com/products/ 

https://www.swinglift.co.nz/products/ - see the "Special Applications" tab 

Thanks for any insights you can provide.  

- PDN. 

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by Overmod on Sunday, April 5, 2020 9:53 AM

The technical issues with 'double stacking' do not directly concern the feasibility of sidewise loading with devices like Letroporters -- I will take this up in a moment.

Sideloading of the kind Steadman designed for is explicitly lateral transfer using the underframes as support.  Obviously this is no more practical for containers in the bottoms of well cars than circus loading is for trailers on FuelFoilers; there is the additional consideration that underlifts for containers in wells have severe access problems, and even a straddle lift would require careful vertical lift (net of any asymmetrical or shifted load in the container) for more than 3-4' before any tilting or lateral movement/shifting is possible without damage.

Sideloading of 'upper stack' containers first requires some kind of retraction of the twistlocking at the four corners, or lifting of the upper container free of castings that engage the twistlock pockets at the corners 'far enough to remove them' (itself an interesting operation for a yard crew).  Then the sideloading has to be done to an elevated platform, with a long lever arm forcing suspension deflection, subgrade shifting, etc. on the transfer vehicle.  It is unlikely that most types of 'sideloadable' trailer underframe will be adequately strong to tolerate being elevated and leveled to permit this.

I did look into whether scaffold-based solutions could be made to allow 'upper-level' side transfer.  The structural difficulty is that the 'scaffolding' can't be more than about 'one container' wide and for loading either the truck runway must be elevated in spots or the scaffolding has to drop vertically to correct height; these greatly increase the cost and complexity of the installation and make careful knowledge and skill in operation more and more necessary.  (The sidelocking of scaffolding is to the twistlocks in the 'lower' container in the stack, and longitudinal precision in the train and intercar spacing can be somewhat avoided by placing the sidelocks so they run in adjustable channels ... but it's still no fun and fraught with the wrong kinds of surprise).

The more 'correct' approach is to have a sideloader capable of top lift.  Fork underlift might work if the containers have 'fork pockets' in the side rails, but this assumes reasonably balanced loading both front to back and side to side to be safe.  A top-lift will have little trouble lifting single containers out of wells or picking upper-deck containers off, but keep in mind that the machine must be stable when vertically extended, and this makes it comparatively larger and heavier and probably in need of extendable (e.g. hydraulic) stabilization during a lift.  It is amusing to calculate the rough number of orders of magnitude more expensive this is for large numbers of containers to be transferred than is relatively simple sideloading from skeleton underframes...    

We then have the issue of actual intermodal loading; the sideloader usually has to wheel to reach the trailer underframe and this takes much additional subgrading and paving.  A somewhat obvious 'choice' is to have the loader reach over existing scaffolding to access upper-deck stacks, then set it down appropriately for asynchronous sideloading in the 'usual 'way.  But such a loader must be even stronger, heavier, and better stabilized than previously mentioned ... and the likelihood of calamity that wipes out years or decades of 'big savings' rises along with that.

I note peripherally that a 'portable' sideloader that is carried on the consist and water-stabilized becomes relatively more complicated and difficult to deploy and run for 'stack' service.  I think it likely that the actual operation would call for singles in all wells that were to be accessed 'en route' with appropriate care in logistical loading of the train at any origin or loading point(s), something easily accommodated with sensible PSR and computer systems.  But it's still more fun to build and run a vertical-lift spreader-based portable lift than one with forks or arms...

 

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Posted by Bruce D Gillings on Sunday, April 5, 2020 7:11 PM

Murphy Siding

 

  Thought provoking concept but missing reality on several levels. Railroads will change, but they’re not going away in our lifetime. Bulk commodities like coal, grain, ethanol, chemicals, rock, etc. that are price sensitive but not time sensitive will continue to move in unit trains.

     Wild numbers: a 110-car unit train would need to be replaced by approximately 450 semi-trucks. Figuring 80 feet per truck with 80 feet between them, you have a line of trucks about 13-1/2 miles long. Which state has an overabundance of highways that they are willing to have worn out by so much more truck traffic?

      How much would it cost to purchase 450 semi-trucks and trailers? Quick look online puts it between $63 million and $79 million.

     Multiply the above numbers times the number of unit trains hauled annually and the whole premise falls apart.

 

 

[quote user="Murphy Siding"]

 

Regarding Murphey Siding's post: 

Incorrect. Utah, Montana, Nevada and I’m sure other states allow double-length bulk haulers.  These include open-top bulk (low value) but now more and more pneumatic bulk (higher value).  These are roughly double the payload of conventional single-length bulk haulers.  Weight restrictions are based on pounds per axle, not on overall gross weight.  I’ve tried to paste links to them but can only get a few to work.
 
There are currently limits on where these trucks can run in some states: in others, they can run on most primary roads, highways and interstates.  Per one of my clients, shippers are pushing the feds and states to allow them everywhere. It WILL happen: it is just a matter of time, because there is too much money at stake.  That changes the economics of bulk trucking by a large amount. Give it a decade at most.  
 
The other factor you are missing is turns. A bulk truck will move from origin to destination in far less time than a unit train (best times) or loose car railroading (worst times).  The number of loads the truck can haul in a given time frame will vary from between two to ten times what a railcar will carry, based on round trips per month/year. So the investment factor for a truck relative to a railcar vis-à-vis equivalent loads is not just a factor of payload, but payload times turns per month/year.
 
On the UP Coast Line in CA, the TankTrain UP was running San Ardo heavy crude between the loadout at Wunpost to the unloading facility at Sepulveda and Alameda in Carson. For a lot of reasons it was replaced by trucks running over highway 46 to a pipeline connection in Bakersfield. At the end of the day it is moving by truck/pipeline, not rail. My point is not that this will replace all rail moves: rather that a LOT of bulk moves can easily AND economically be made by truck (that is, economically to the shipper, not Joe Driver who pays a disproportionate share of the highway damage the trucks do). And until something is done to change how trucks pay for infrastructure so that their true road damage impact (even factoring in for constant axle loading) becomes a part of their rates, or railroads are given full or nearly-full tax credits for infrastructure investment as some form of leveling the playing field (both of which are probably very, very, very unlikely), conversion of bulk to truck in many lanes is likely to accelerate. There may always be a need for major bulk arteries where multiple unit trains per day just make sense.  But more and more of the bulk non-unit train sidings will continue to disappear.
 
ttrraaffiicc’s basic premise should not be dismissed. Railroading as we know it is in a very precarious position. The cash cow of coal is fading away.  And beyond that market share continues to shrink (dismissing the shock of Covid-19). BNSF continues to stay focused on the longest of hauls in intermodal: a great profit strategy but ignoring the medium-haul markets that were until the last year or two considered to be the next frontier for intermodal conversion.  Others, like UP out West, can’t figure out how to make intermodal work in most lanes, and so are opting for ever-lengthening schedules (while touting on-time service metrics….). Terminal investments at UP are getting cut, to a strategy of maximizing what they own regardless of location. The railroads are in a circle-the-wagons strategy combined with a head-in-the-sand perspective on logistics changes.  Meanwhile, a new generation of managers see the next generation of trucks as a key to reducing their supply chain costs even more, NOT railroads. As I’ve said ad nauseum, lower rail rates (where they still exist in non-bulk moves) often do not reflect supply chain costs. And THAT is what matters.
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Posted by tree68 on Sunday, April 5, 2020 7:52 PM

I would opine that the biggest threat to the railroads will continue to be the vultures whose only desire is to loot the treasury.

They have little interest in growing traffic, or growing capacity.  More traffic means more labor and maintenance expenses, and growing capacity involves capital outlays - all money they'd rather have in their pockets.

If railroads are going to survive, they need to shed the opportunistic investors and increase the number of investors who are interested in long term growth and profitability.  It won't be easy.

Management (especially boards) will have to be found and employed that makes it plain that long term growth is the goal and thus hopefully discourage opportunistic investing.

 

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Posted by ttrraaffiicc on Sunday, April 5, 2020 9:46 PM

Bruce brings up an interesting point. In terms of tonnage, trucks move over 5x what rail moves. Pipelines move double the tonnage of rail. Railroads are completely irrelevant to the US economy. Even bulk moves can mostly be handled by trucks for a lower total supply chain costs. Road haulage doesn't even need to go autonomous to kill rail. Rail is already in the grave and the truckers are ready to start burying it.

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Posted by BaltACD on Sunday, April 5, 2020 11:01 PM

With covid-19 could this be the last decade for humanity?

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Posted by tree68 on Monday, April 6, 2020 7:30 AM

BaltACD

With covid-19 could this be the last decade for humanity?

We've survived worse.  Despite what the media seems to portray, better than 98% recover...

You're more likely to die while you're out motoring around instead of "staying in..."

As for the death of trains - that's already been predicted several times in the past, yet they are still here.  

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Posted by NKP guy on Monday, April 6, 2020 8:16 AM

 

tree68

I would opine that the biggest threat to the railroads will continue to be the vultures whose only desire is to loot the treasury.

They have little interest in growing traffic, or growing capacity.  More traffic means more labor and maintenance expenses, and growing capacity involves capital outlays - all money they'd rather have in their pockets.

If railroads are going to survive, they need to shed the opportunistic investors and increase the number of investors who are interested in long term growth and profitability.  It won't be easy.

Management (especially boards) will have to be found and employed that makes it plain that long term growth is the goal and thus hopefully discourage opportunistic investing.

 

 

   I recall reading how John Wannamaker, the inventor the concept of the Department Store, once sneeringly referred to a rival as a "businessman," while Wannamaker took great pride in being a "merchant."  There is a big difference.

   Railroads need to be run by professional railroaders, not just businessmen with their eyes on the stock price 3 months hence. 

   Imagine what the results would be if we elected as President a person with no experience whatever in running a government?  You can't be a barber, or a teacher, or an Information Technologist without a credential in that field.  But in railroading and in the Executive Mansion, people brand-new to the business are simply installed with authority, with results that are all too apparent.

  

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Posted by Overmod on Monday, April 6, 2020 9:58 AM

BaltACD
With COVID-19 could this be the last decade for humanity?

More likely it's the last decade for much of American society as we've come to understand it.  At least as radical as the change from Depression to postwar prosperity (that not-too-incidentally killed off most big steam in less than a decade) or the changes after 1828.  Look for some segments to respond slowly, if at all, although I suspect the model for cruise ships and trucking ... there will always be someone to buy up the capital assets and try to make a go of the marketing and operations, if there are enough greater fools to patronize it ... will apply to mass social operations like wedding venues, open-floor eat-in restaurants, or kids' party facilities.  Look for weird expedient changes in education, too -- probably not particularly for the better in already-ill-served 'cohorts'.

More importantly, COVID-19 was the dry run for rapid response to an actual pandemic.  Those of us who have studied this know that any 'engineered pandemic' won't be just one, and won't be deployed in a vacuum without other strategies or tactics being sequentially fired.  Even accidentally-originating strains could easily progress to 'Red Plague' or Captain Trips status with distressing speed, the operative factor appearing to be delayed induction or appearance of symptoms to allow greatest possible undetected spread, combined with a targeting of key receptors or systems that are highly conserved and that can't be externally modulated or blocked without severe related consequences (see HIV/AIDS as a comparable model).  We badly failed in most respects, and while we have been failing repeatedly for many years, to be failing now on so many levels is both a wake-up call and a very useful set of 'lessons to be learned' about what to fix, what to emphasize, and what not, not, not to do the next time.

And there will be a next time, and it may not give any more warning than a critical solar-event EMP would.  

(There is also an associated point.  We've had people working with a wild will to build a more imperfect America for some time.  Now that we have to essentially re-create whole sectors of American society, we might as well set up to do it right by correct standards, not expedient ones.  You can stop laughing now; I'm serious.)

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Posted by tree68 on Monday, April 6, 2020 10:04 AM

NKP guy
 You can't be a barber, or a teacher, or an Information Technologist without a credential in that field.

It has been said, however, that a good manager can manage anything, even with little knowledge of the nuts and bolts.  That does assume that those being managed do have said knowledge.

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Posted by Overmod on Monday, April 6, 2020 10:26 AM

tree68
It has been said, however, that a good manager can manage anything, even with little knowledge of the nuts and bolts.  That does assume that those being managed do have said knowledge.

No; what it assumes is that the manager has a good grasp of actual sound principles by which rational things are accomplished, and is willing and able to learn the relevant things he or she must know about the nuts and bolts.  

The latter is the place where the Stanford grads usually come to grief.  If you come in already knowing the answer, or the methodologies you intend to implement on the benighted, you'll never figure out what you don't know, and what you can't know, in order to figure out what ought to be done and how to conduct and implement the myriad 'midcourse corrections' you'll almost certainly need.

Note that this is a very different discussion, with very different parameters, than the discussion of what a good leader can or should do in a similar position.

(It is also a very different discussion from what a good, or adequately Agile, administrator would do.  Some people make the very unfortunate mistake of assuming that administrators are managers.  Some enterprises and organizations actually survive when that mistake is made.)

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Posted by BaltACD on Monday, April 6, 2020 11:30 AM

Overmod
 
tree68
It has been said, however, that a good manager can manage anything, even with little knowledge of the nuts and bolts.  That does assume that those being managed do have said knowledge. 

No; what it assumes is that the manager has a good grasp of actual sound principles by which rational things are accomplished, and is willing and able to learn the relevant things he or she must know about the nuts and bolts.  

The latter is the place where the Stanford grads usually come to grief.  If you come in already knowing the answer, or the methodologies you intend to implement on the benighted, you'll never figure out what you don't know, and what you can't know, in order to figure out what ought to be done and how to conduct and implement the myriad 'midcourse corrections' you'll almost certainly need.

The present day theory of management is driving oversized square pegs through undersized round holes - without questioning why things are not meshing with the clockwork precision of a Swiss watch.  They don't believe the common sense answer even when it is presented to them.

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Posted by Bruce D Gillings on Monday, April 6, 2020 11:43 AM
I’ve gotten behind on checking all the blogs/posts. Just saw this one from 3 months ago on FF’s “Whatever happened to UP?” and thought it was brilliant:

Added 3 months ago
About the train volumes.  UP (and the other class 1s have, I believe suffered from the coal traffic habit.  Coal was the perfect commodity for incompetent and poorly managed RRs to still make money.  No way would a powerplant hire a fleet of 100+ trucks to move the coal, so it defaulted to rail.    What this did was provide a steady income despite poor service.  That,IMHO lead to managers who should have been seen as failures moving up because the coal didn't defect to trucks.  This created a layer of decision makers who need to be completely re-educated about customer service.  Meanwhile,given the death of coal the RRs will be in increasingly dire straits unless they figure out reliable AND faster transit times.  
 
Railroads are defaulting to the land-barge model more than ever as coal dwindles and the hedge-fund/predatory-investor driven PSR is now the norm.  Even BNSF is tending that way, though not as bad as others.  As an aside, I wish someone could come up with a more accurate name, as it is nothing about “Precision” nor “Scheduled” in any way that customers can relate to.
 
For remaining bulk unit trains, and a certain amount of non-unit train bulk; some heavy load carload (ie: lumber); and perhaps vehicles??? the land-barge model can work.  But those are not the growth areas. Domestic intermodal is the future growth area.  And domestic intermodal is service-focused. To repeat myself, supply chain costs are determined by how each component interfaces and impacts every other component. Erratic (intermodal) service or service that has been slowed, where transit times exceed OTR times by 3 or 4 days, has cost impacts to other supply chain components that outweigh any savings of lower rates. Take a look at UP’s intermodal schedules: the trend in schedules is the opposite of their customers’ trends. And rates are less and less competitive!
 
I would agree with what Mr. Vartanoff: the management styles that coal required – very basic, where the lowest rail cost was indeed the lowest overall cost, and where service performance needs were nothing close to what intermodal requires – do not fit in today’s general logistics world. The tremendous changes occurring in supply chains, driven by Amazon and the new world of fulfillment (and their responding competitors), make the coal management style an anachronism.  The PSR world of management and decision-making, separated from customer reality, portends an industry that will only shrink with time and slide into general irrelevancy. I don’t think railroading will disappear, but I do think it will shrink substantially.
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Posted by Deggesty on Monday, April 6, 2020 12:04 PM

Quoting Overmod: "No; what it assumes is that the manager has a good grasp of actual sound principles by which rational things are accomplished, and is willing and able to learn the relevant things he or she must know about the nuts and bolts.  " And, he is willing to learn from those who know how much the nuts must be tightened on the bolts.

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Posted by Euclid on Monday, April 6, 2020 12:35 PM

If it is true that PSR is the coronavirus of the railroad industry, how will they possibly survive?  How do you stop the vulture capitalists when you have management in on it?  Surviving the decade would be lucky.

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Posted by Murphy Siding on Monday, April 6, 2020 12:35 PM

ttrraaffiicc

Bruce brings up an interesting point. In terms of tonnage, trucks move over 5x what rail moves. Pipelines move double the tonnage of rail. Railroads are completely irrelevant to the US economy. Even bulk moves can mostly be handled by trucks for a lower total supply chain costs. Road haulage doesn't even need to go autonomous to kill rail. Rail is already in the grave and the truckers are ready to start burying it.

 

Maybe it's different in other areas? I live in a rural state where trains haul lots of grain, ethanol and aggregate. None of that goes by trucks long distance. If that traffic "can mostly be handled by trucks for a lower total supply chain costs", why isn't it?

Thanks to Chris / CopCarSS for my avatar.

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