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Has Union Pacific RR created an industry-wide Force Majeure; ?

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Posted by samfp1943 on Wednesday, April 20, 2022 8:10 AM

BaltACD

A C&P from the linked article posted by BaltACD.....It seems to bear a posting of the article's last paragraph IMHO...Whistling
  **More than one time Balt has made illusions to the misconceptions of what us 'Hobbiest Railroaders' seem to hold onto as our imagined sets of ideals we mentally hold ,  in regards, to our 'hobby avocation'..... 
  It certainly seems to stand up to the today's world of railroading reality ?
 
FTA:"...They know without any doubt that the railroad industry is controlled by Wall Street hedge funds and it becomes even more abundantly clear each and every day. Even in my time at the railroad, the company is unrecognizable, and I could never in good conscience recommend it as a good place to work, nor lower myself to go into management, even though I had wanted to several years ago. Now, even I, a train lover, a railroad history enthusiast for life, am counting my days and expanding my investment opportunities into other fields so that I can pull the pin early and leave the railroad to burn. Sadly though, even that is an end that I know is not going to be a reality. Companies such as the railroad no longer crash and burn when management cuts to the bone and runs their operation into the ground. They are too big to fail. They run themselves into the ground, and then they get a big taxpayer bailout as a reward. And that in itself is just another reason why American railroad workers have lost their loyalty and drive to work to support the industry and their employers. We all know now that in the end, we are expendable and are allowed to fail. The railroad has made that perfectly clear..."

Sincerely, Michael Paul Lindsey II, Locomotive Engineer, Pocatello, Idaho

 

THANKS, Mr. Lindsey II    Whistling  !!

 

 


 

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Posted by BaltACD on Tuesday, April 19, 2022 10:58 PM

Never too old to have a happy childhood!

              

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Posted by jeffhergert on Tuesday, April 19, 2022 1:51 PM

I originally posted this to another related thread. 

It's not getting over the road part that is the problem.  At least the biggest problem.

It's getting into and out of yards.  Before, most manifests were primarily built with cars for one destination.  They might have one, maybe two intermediate points that they picked up or set out cars.  Cars that were going to/from local customers.  Some of those origin/destination points were intermediate yards.  The reason they tried to limit intermediate work is because it ties up track time on the main as the train works the yards.

Now, most manifest trains are maid-of-all-work manifests.  Not only are they handling cars for intermediate points, but they "block swap" cars that are going through just to get it out of the large terminal yards to cut down on dwell time. They've tweaked the plans somewhat, not all work every intermediate point, but most formerly through trains work many more intermediate yards than they used too.  There's less trains, but they usually are a lot bigger than they used to be.

Putting together at an originating point, picking up and/or setting out at intermediate points, or putting away at a terminating point, especially when the trains are huge.  And at the intermediate yards it seems every train that needs to work all show up at once.  Sitting outside a yard, waiting for your turn - which might be a few hours, eats up crew time.  There's a reason  PSR is also known as "Pick up, Set out, Recrew."

Some of these huge trains are picking up and/or setting out blocks that are the size trains used to be.  It's not unheard of to handle in or out blocks of 80, 90 or more cars.  Most yard tracks, at terminal and intermediate points, don't have yard tracks capable of handling blocks that large, so you have to break them down.  Double, triple, even quadroupling in/out of yards is common.  It all takes time.  Throw in winter weather, or even long trains with only engines on the front, and it can take a lot longer to build up air pressure to do required air brake tests. 

Even better, have a train built with two solid* blocks located at different locations within the train that need to be set out, or pick up two solid blocks at a yard, and the entire train needs a class one initial terminal air brake inspection.

*A "solid block" is one that has been air tested, including safety inspection, and either kept on yard air or have been off air less than 24 hours.  A solid block can be split between two tracks if one track won't hold the block.  But when one block is in the yard on the north side of the main, the other block on the south side, one can be pretty confident in saying it's not one solid block.

Now while you have multiple trains working yards, what's the switch engine doing?  Depending on the yard arrangement, and if there's a train working both ends at the same time, nothing.  It can't move because the leads are occupied.  Back to back workers coming in mean they may not get tracks switched and cleared off so the next train has some place to set out.  I've read a few times on a recrew report where they flat out said they ran out of room to take more cars.  So trains were held out.  My favorite was when one said, "Too much train, not enough yard."

So, yes, I would like to be able to use more power on some trains to get over the road.  But it doesn't really matter to get over the road when it takes 4 or more hours to put a train together at an originating terminal (We originate on my territory two working trains.  The rest are through trains that work.), get over the road in 4 hours, and then sit, held out because the yard can't take you, for another 4 hours.  Usually they get even the largest trains at least to the point at a crew change where an outbound crew can come. 

Not always, though.  This morning coming home I passed two manifests tied down where they are going to have to call dog catch crews to drag them in.

Jeff   

Not being able to get over the road because of not having enough power does cause some trains to die on HOS.  Usually though, there are other circumstances like high winds or being held to sort other traffic that comes into play.  Although it happens in the name of "fuel conservation" when a request is made to turn on a trailing engine because they can't make track speed and it's refused, that train(s) need recrews.

Jeff               

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Posted by BaltACD on Tuesday, April 19, 2022 1:40 PM

zugmann
 
Electroliner 1935
How much crew shortage is caused by restricting use of available power in the name of fuel economy and crews dying on HOS chewing up a dogcatch crew and track space. 

Not much.  Just getting to the holdout place a few minutes faster. 

Eliminating jobs and expecting those remaining jobs to do 15 hours a work a day is what is causing crew shortages.  Pay that is stagnant + rising benefit cost/reduced benefit level (expired contracts) is causing crew shortages.  Attendance policies, same thing.  Of the last ~ 24 people that hired out to work in my little terminal last 5 years -   I think one stayed. 

Operating plans can make or break a railroad.  In my 51 years I saw plans that made the railroad run in a fluid and efficient way.  I have also seen plans that brought the plant to a grid locked mess - with both plans being implemented on relatively the same level of traffic.

I doubt UP is experiencing any uptick in the level of traffic that is being tendered to them that exceeds their historical levels - I feature PSR has pruned the manpower well short of what is necessary to efficiently handle the historic levels of traffic.

UP is shooting themselves in their feet with automatic weapons called PSR.

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Posted by zugmann on Tuesday, April 19, 2022 1:25 PM

Electroliner 1935
How much crew shortage is caused by restricting use of available power in the name of fuel economy and crews dying on HOS chewing up a dogcatch crew and track space.

Not much.  Just getting to the holdout place a few minutes faster. 

 

Eliminating jobs and expecting those remaining jobs to do 15 hours a work a day is what is causing crew shortages.  Pay that is stagnant + rising benefit cost/reduced benefit level (expired contracts) is causing crew shortages.  Attendance policies, same thing.  Of the last ~ 24 people that hired out to work in my little terminal last 5 years -   I think one stayed. 

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by Electroliner 1935 on Tuesday, April 19, 2022 1:13 PM

How much crew shortage is caused by restricting use of available power in the name of fuel economy and crews dying on HOS chewing up a dogcatch crew and track space. Managment has focused on some things and forgotten that the job is to move freight. Then optimize costs. Not cut everything at the expense of moving the freight. And stop paying the CEO 224 x the average employee. No way are they worth more than 50 times what the cost of an employee that makes the mean yearly wage.

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Posted by jeffhergert on Tuesday, April 19, 2022 1:07 PM

They are running out of things to cut.  The last Transportation Plan I think is a big part of what caused the current mess.  It was put into place a little over a month ago.  Among other things, it abolished some local city to city transfer trains, cutting out more jobs.  Just more cars for the through trains to handle.  Within a couple of weeks things were falling apart.  There were other issues.  The plan has been tweaked, but it seems like it still has some issues.

It may be anecdotal, but it seems like we are having more engine failures.  The kind that either sideline completely a locomotive or keep it from being used as a lead engine or distributed power engine.  This isn't really surprising since they decimated the mechanical department towards the beginning of the pandemic.  Their largest diesel shop was closed (I think it's been reopened, at least partially if not fully) in the name of "safety" in the face of the pandemic, but really it was to reduce headcount.  Many other smaller facilites also were closed or cut back.  Now they are hiring for mechanical people again.  I've heard some that were let go are hesitant to come back. 

 

Zug's right.  They've caused most of the current problems themselves.  PSR plans on only so many trains, using so many crews, with nothing going wrong to throw off the balance.  I myself don't think there's a large surge in manifest traffic and that's currently what's bogging down.  The so-called surge is the plan breaking down because of issues, some of which I admit are beyond the railroad's control like weather.  But mostly, they don't plan on equipment failures, they don't plan on recrewing trains.  (Some trains regularly need being recrewed almost every day.)  A little ripple in one place builds to become a tsunami across the rest of the region, if not entire system.

Our answer is to blame the customers.  It's now a joke. When we see a train tied down, and we do, because yards are getting plugged, and they are, we say, "It's those darn customers' fault."

Jeff

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Posted by zugmann on Tuesday, April 19, 2022 12:39 PM

Wasn't an isntant poof.  But a lot of cuts were made when traffic was slow. 

And (at least locally) every time they cut jobs - a couple people said "forget this" and walked out. 

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by Euclid on Tuesday, April 19, 2022 12:24 PM
zugmann

 

 
Euclid
So the only possible explanation is a demand surge.  That is what makes the problem sudden.  Adopting PSR was not a sudden process. 

 

PSR eliminated any slack in the line the RRs had (extra men/engines/tracks/yards).  That's why they're struggling.  And they can't just say "poof" and have 1000 people show up at a hiring session anymore.  

Years of making the jobs miserable have caught up to them. 

 
In this case, I think the “poof” was the instant demand spike caused by the country restarting after lockdown.  Almost two years of production had been postponed, the reopening began a race to make up for the lost time and production.
 
If demand were to increase gradually, as more typical, there would not need to be a “poof” to suddenly hire 1000 new people because the need would build gradually.  So they would hire people gradually to fill the gradually increasing need.
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Posted by Gramp on Tuesday, April 19, 2022 12:22 PM

I understand why and when manufacturers are forced by conditions to put customers on allocation. It just seems that when railroads do it, they are expert in knowing how to really alienate customers in doing it. They show no evidence of people skills or trade skill. 

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Posted by zugmann on Tuesday, April 19, 2022 10:53 AM

Euclid
So the only possible explanation is a demand surge.  That is what makes the problem sudden.  Adopting PSR was not a sudden process. 

PSR eliminated any slack in the line the RRs had (extra men/engines/tracks/yards).  That's why they're struggling.  And they can't just say "poof" and have 1000 people show up at a hiring session anymore.  

Years of making the jobs miserable have caught up to them. 

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by Euclid on Tuesday, April 19, 2022 10:18 AM
I find two completely different definitions of what PSR is.  I also find articles describing those two definitions.  
 
The key to this U.P. problem is that the problem has come on suddenly.  If it were gradual, they should have hired more people and bought more locomotives.  But because the problem came on suddenly, they were blindsided by it and caught flat footed.
 
So the only possible explanation is a demand surge.  That is what makes the problem sudden.  Adopting PSR was not a sudden process. 
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Posted by BaltACD on Tuesday, April 19, 2022 9:44 AM

Does anyone know how many locomotives the UP currently have in their 'dead lines'?  How many locomotives are 'stored servicable'?  How operating employees have been furloughed in the recent past?

In line with PSR, shortages of locmotives and employees are normally 'self inflicted' damages for the companies adopting PSR.

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Posted by Ulrich on Tuesday, April 19, 2022 9:22 AM

Metering as described here is really nothing new and has been going on for years across all sectors of the transportation industry. It's a short term measure to deal with spikes in volume. Once volumes normalize the metering will come back off. 

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Posted by Euclid on Tuesday, April 19, 2022 9:17 AM
U.P. is not being very clear about why they are falling behind.  They cite a “tight labor market” and a shortage of locomotives.  Both suggest they are experiencing a demand surge, but they don’t come out and say that.  However, if they suddenly have a shortage of locomotives and employees, what else could cause them to fall behind in operations?
 
In my opinion, they sound like they are signaling weakness and making themselves into a victim of too much demand.  That is a shockingly self-destructive marketing message to send out.  Clearly they they see the solution to be the limiting of traffic so they can keep up with demand.  Robber barons would be rolling over in their graves to hear such weakness and lack of confidence. 
 
I conclude that the problem is a demand surge coming as a response to the country being shut down almost two years for the pandemic.  Apparently this consequence was never considered, and has now caught us by surprise.
 
https://www.up.com/customers/announcements/customernews/generalannouncements/CN2022-15.html
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Posted by Convicted One on Tuesday, April 19, 2022 8:46 AM

So anyway, I'm trying to imagine how I would feel if I were on the receiving end of such a threat?

Here we are in the most prosperous nation on the planet, operating under an economic model dependent upon constant growth  for success. And here allasudden one of my trade partners puts me on notice that my slice of the American dream has just been capped.

It's hard to imagine any one railroad trying to pull off such a stunt back in the pre-consolidation days....but now what practical alternatives are there?

And in line with the O.P. 's main premise that this be an industry wide dilemma...I think it is. Norfolk Southern or CSX could easily  hide behind force majeure protections where UP is a connecting road with their provided services.

Perhaps  Farce Majeure is a more appropriate descriptor? Super AngryUmbrellaStorm

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Posted by Euclid on Tuesday, April 19, 2022 7:29 AM

Murphy Siding
Another possibility is that UP is just using this as a tool to raise prices. (I wrote weapon first, but that seemed too harsh-or too obvious). Think about how we have an annual news of a "shortage" of turkeys, Christmas tress and eggs at strategic times of the year-every year. 

 

You mean to falsely predict a shortage in oder to drive up demand from customers that want to get ahead of the prediced shortage?

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Posted by BaltACD on Monday, April 18, 2022 10:47 PM

Euclid
Typically when a company has more demand than they can serve, they raise the price.  

Typically they will 'milk' the traffic for every possible penny - not reduce the traffic level.

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Posted by Murphy Siding on Monday, April 18, 2022 9:03 PM

BaltACD

 

 
Convicted One
 
Euclid
Why would a company that wanted to eliminate competition to get more business from their competitors throw business away? 

To assure first choice of "low hanging fruit".

 

Low hanging fruit at a high price point, with the customer having little option but paying the price.

 

Another possibility is that UP is just using this as a tool to raise prices. (I wrote weapon first, but that seemed too harsh-or too obvious). Think about how we have an annual news of a "shortage" of turkeys, Christmas tress and eggs at strategic times of the year-every year. Mischief

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Posted by Convicted One on Monday, April 18, 2022 8:54 PM

BaltACD
even at the high price point.

I don't have adequate data to make an informed observation. But I suspect they are operating at a level they have determined to provide an optimal return for the level of spending they are willing to ante up? Something just shy of where diminishing returns become a factor, perhaps?

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Posted by Euclid on Monday, April 18, 2022 8:52 PM

Typically when a company has more demand than they can serve, they raise the price.  

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Posted by BaltACD on Monday, April 18, 2022 7:02 PM

Convicted One
 
BaltACD
Low hanging fruit at a high price point, with the customer having little option but paying the price. 

Precisely!!  Once the competition has been either assimilated or eliminated, then the surviving entity is in better shape to dictate terms to the customer...pick whichever fruit is the most appealing

I do find it amusing that UP features that they can't handle all the traffic the customers want to ship even at the high price point.

UP is failing Robber Baron 101.

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Posted by Convicted One on Monday, April 18, 2022 5:24 PM

BaltACD
Low hanging fruit at a high price point, with the customer having little option but paying the price.

Precisely!!  Once the competition has been either assimilated or eliminated, then the surviving entity is in better shape to dictate terms to the customer...pick whichever fruit is the most appealing

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Posted by BaltACD on Monday, April 18, 2022 4:22 PM

Convicted One
 
Euclid
Why would a company that wanted to eliminate competition to get more business from their competitors throw business away? 

To assure first choice of "low hanging fruit".

Low hanging fruit at a high price point, with the customer having little option but paying the price.

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Posted by Convicted One on Monday, April 18, 2022 2:44 PM

Euclid
Why would a company that wanted to eliminate competition to get more business from their competitors throw business away?

To assure first choice of "low hanging fruit".

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Posted by ns145 on Monday, April 18, 2022 2:31 PM

They wanted to eliminate competition so that they could set rates where ever they wanted.  The goal is maximize profits, NOT maximize traffic levels.  UP's gross and revenue ton-miles are about 2/3's of that for BNSF, yet they make more money than BNSF.  These stats were at parity in late 1990's.  Whether you like the playbook or not, it certainly is working for UP and their shareholders. 

PSR has excerbated things on UP, but looking back at the traffic and rate data over the past 20+ years, it is evident that UP has been intentionally pricing itself out of markets for a long time.  I understand the thought process, especially after the meltdown in the late 1990's and the near meltdown in 2006.  UP had to shed traffic to stay fluid.  The long-term implications of this behavior, however, definitely could have a very negative effect on the growth of the US economy.

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Posted by charlie hebdo on Monday, April 18, 2022 2:22 PM

Euclid

 

 
charlie hebdo

 

 
Convicted One

Gee, who would have ever anticipated that seven decades of anti-competitive merger would yield entities immune to market forces that otherwise might correct their "excesses"?

 

 

 

Nailed it in one.

 

 

 

Why would a company that wanted to eliminate competition to get more business from their competitors throw business away?
 

Insufficient workforce? 

Marginal costs exceed the marginal revenues?

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Posted by Euclid on Monday, April 18, 2022 1:40 PM

charlie hebdo

 

 
Convicted One

Gee, who would have ever anticipated that seven decades of anti-competitive merger would yield entities immune to market forces that otherwise might correct their "excesses"?

 

 

 

Nailed it in one.

 

Why would a company that wanted to eliminate competition to get more business from their competitors throw business away?
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Posted by charlie hebdo on Monday, April 18, 2022 12:15 PM

Convicted One

Gee, who would have ever anticipated that seven decades of anti-competitive merger would yield entities immune to market forces that otherwise might correct their "excesses"?

 

Nailed it in one.

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Posted by Convicted One on Monday, April 18, 2022 8:44 AM

Gee, who would have ever anticipated that seven decades of anti-competitive merger would yield entities immune to market forces that otherwise might correct their "excesses"?

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