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New CPKC Trains

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Posted by ns145 on Wednesday, May 24, 2023 11:52 AM

CPKC is superior because they control the best rail franchise in Mexico and can corner the market.  Any traffic to/from UP via Laredo will be subject to a joint rate that CPKC will set for the portion of the movement south of Laredo.  Not too hard to imagine how CPKC can work this situation to their advantage, especially if you're UP (they know all about cornering markets).

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Posted by MidlandMike on Wednesday, May 24, 2023 7:18 PM

Vermontanan2
UP still gets more traffic at Laredo than CPKC, ...

It's unknown what will happen now that the former KCS has become part of a single line that goes beyond KC.

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Posted by Vermontanan2 on Thursday, May 25, 2023 12:44 AM

MidlandMike

 

 
Vermontanan2
UP still gets more traffic at Laredo than CPKC, ...

 

It's unknown what will happen now that the former KCS has become part of a single line that goes beyond KC.

 

True.  But there is a lot we do already know, such as the reason that UP has most of the traffic at Laredo is because their route system is much more extensive than KCS, and will continue to be as such compared to CPKC.  We also know that wherever a car going through Laredo destined to a point “beyond KC” (served by both UP and CPKC) is going, it will take longer, require more locomotive power and fuel to get it there, and will require a longer equipment cycle time if CPKC is used.
 
Not all of the traffic going through Laredo is destined for Chicago.  And there is are a whole lot of Houstons, Oklahoma Citys, Denvers, Little Rocks, Austins, Tulsas, Des Moines (etc.) where single-car routings just aren’t possible.  Sure, CPKC goes to places UP doesn’t go, but they are relatively limited.  No one is home in North Dakota, California has almost as many people as all of Canada, and Washington and Oregon have about the same population as British Columbia and the three prairie provinces combined.
 
The route from Laredo to Chicago is 25% longer via CPKC than UP. For traffic beyond there to other locations in the Upper Midwest and Middle Atlantic (such as Michigan, Indiana, Ohio, Pennsylvania, and New York) via interchange to CSX and NS, the mileage difference is even greater.  While CPKC HAS to interchange in Chicago, UP can hand off trains in rural Illinois in St. Elmo and Sidney – significantly shorter.  And while CPKC may tout “single line” service between Chicago, Detroit, and Toronto, having literally the longest possible route through Chicago followed by nearly 300 miles of trackage rights on a really busy route easily negates the “single line” claim being at the mercy of other railroads.
 

 

All this on a backdrop of the fact that in the USA, CPKC’s routes are longer, slower and steeper than UP where they do compete, and someway somehow, CPKC will have to address this huge operational deficiency….if it is even possible to do so.
 
 
NS145

 
CPKC is superior because they control the best rail franchise in Mexico and can corner the market.  Any traffic to/from UP via Laredo will be subject to a joint rate that CPKC will set for the portion of the movement south of Laredo.  Not too hard to imagine how CPKC can work this situation to their advantage, especially if you're UP (they know all about cornering markets).
 
 
Well, CPKC has the superior route from Laredo to Mexico City.  Not the case for the rest of Mexico and certainly not the case in the United States.
 
It’s unlikely they can “corner the market” when their “market” north of the border is so sparse.  UP goes everywhere in the Western two-thirds of the country.  CPKC has basically one route up the middle.  CPKC is never going to “corner the market” on shipments to/from Denver, Phoenix, California, Portland, or Oklahoma City.  Or even Houston where its trains to/from Mexico get to enjoy all the potential delays of operating through one of the most complex and congested terminals in the country on their competitor’s infrastructure, while at the same time not having access to the nation’s fifth-largest metro area and largest Gulf port.
 
And I’m sure UP and Ferromex will not be sitting still through all this.  With UP’s vast system, and controlling all the other Mexican interchanges, they, too can control routings.  It’s not like the CPKC merger has created a behemoth.  CPKC is still the smallest Class I railroad (by revenue) and has the smallest imprint on the largest market (the USA). 
 
I actually find all this hoopla over CPKC’s “Single Line” route quite comedic.  Why is it such a great thing now?  After all, CP got access to Kansas City in 2008.  Why not merge then?  And let’s not forget that in the interim, there were the attempted marriages with CSX and NS.  Was acquisition of KCS a really great deal or just the only remaining spinster?
 

 

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Posted by ns145 on Thursday, May 25, 2023 7:45 AM

CPKC can corner the market on the traffic that they control originating in Mexico.  According to a TRAINS article in November 2013, the KCSM lines moved 40-45% of all the rail traffic in Mexico.  They also serve something like 13 of the 16 auto plants in Mexico.  Ferromex looks way bigger and badder on a map, but in reality its mostly made up of a lot of light density lines.

With control of that traffic, CPKC will force the long haul to the furthest distant US interchange points possible.  And with that $31 billion purchase price they are going to have to milk the cow dry.  Circuity won't matter when the longest CPKC service routes are the cheapest ones for shippers.  And with traffic terminating in Mexico, they can raise their Mexico-only joint rates with UP high enough to make it more cost-effective to move traffic south in their new single line service.  There is a real threat here to UP's near-monopoly between Chicago and Mexico, which is why they are initiating legal action.

In all fairness, though, IF UP was willing to make use of its more direct routes and lower operating costs to undercut CPKC's rates by a considerable margin, I do think that UP could put CPKC in great peril.  The trouble is no Class I wants to steal traffic away from another carrier using such means.  Can't get a 55 OR going that route.  I don't dispute your "UP is physically superior argument", but given how rail economics currently work it all becomes irrelevant (which just goes to show how distorted everything has become in the rail industry).

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Posted by Ed Kyle on Thursday, May 25, 2023 9:02 AM

This morning (May 25, 2023) finally saw a sizable southbound stack train through Iowa.  Train 180 had 44 platforms with 86 Schneider containers, about 30 containers more than any prior train.  

Meanwhile, Train 181 has still been intermittent, running only eight times during the past 12 days through Ottumwa.  On May 22 it carried a peak of 63 containers after not running the day before.

A few doublestacks have even appeared through Dubuque on manifests headed north.  These were not Schneiders.

Overall train counts are little changed from before.  During the past 11 days an average of 6.6 trains have passed Ottumwa daily, including 2.5 manifest, 1.5 intermodal, and 1.1 tank trains.  The rest have been covered hopper, sand, or coal unit trains.  Train counts ranged from 5 to 8 per day.

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Posted by MP173 on Thursday, May 25, 2023 9:30 AM

Ed:
Great report.  I look forward to seeing it daily.  While the train count is important, to me the critical number is the number of revenue loads (containers) on the 180/181.  It will be of interest to see how that volume changes over the next few months.

On a totally unrelated topic...has anyone seen the new Virtual Railfan "Big 10 Curve" webcam?  Not much action on the line (ex Rio Grande west of Denver) but it is quite a view.  Sorry to hijack this thread.  If discussion warrants I will start a new thread.

 

ed

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Posted by Vermontanan2 on Thursday, May 25, 2023 11:58 PM

 

NS 145: I agree that the CPKC line from Mexico City to Laredo has the most dense amount of traffic.  But I don't with your statement, "CPKC will force the long haul to the furthest distant US interchange points possible.  And with that $31 billion purchase price they are going to have to milk the cow dry.  Circuity won't matter when the longest CPKC service routes are the cheapest ones for shippers."  

This seems contradictory.  It's true that $31 billion price tag is an albatross that needs to be addressed, but there is a point when circuity matters.  And circuity is what is going to limit what CPKC can charge and still make money.  Example: A car from Mexico to Indianapolis for CSX delivery.  On the UP routing, UP takes the car to interchange to CSX in St. Elmo, Illinois (on a run-through train), then direct to Indianapolis, 1294 miles from Laredo.  If CPKC forces the interchange to CSX in Chicago (their nearest location), the mileage balloons to 1917 miles or almost 50% more.  So on a strictly distance basis, CPKC is going to take half again as long.  Throw in CPKC's limitation of a single route with steeper grades versus UP's directional running across Texas and Arkansas on flatter terrain and with much greater meet/pass capability, and the "new" CPKC routing will likely take twice as long or more.  That begs the question:  So can CPKC really afford to be cheaper and still pay of its debt?  And is it only artificially cheaper to get the business but isn't covering the cost of the operation?  And, given the doubling of car cycle time, can the shipper really afford the extra transit time?  This depends on the commodity, but the bottom line is that CPKC's route (and there really is just one) is so skeletal, that situations like this Indianapolis example will be the rule more often than the exception.  Sure, CPKC could force cars for Mobile and Wichita to move hundreds of extra miles via Shreveport to interchange at New Orleans and Dallas for a longer haul on their railroad (with great cost), but they're not going to "corner the market" on traffic for the Western USA; UP's still going to get that.

In the end, traffic tends to gravitate to the most-efficient, lowest-cost routes.  And that's never going to be CPKC north of the Mexico-USA border.

 

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Posted by ns145 on Friday, May 26, 2023 9:07 AM

Vermontanan2

 

NS 145: I agree that the CPKC line from Mexico City to Laredo has the most dense amount of traffic.  But I don't with your statement, "CPKC will force the long haul to the furthest distant US interchange points possible.  And with that $31 billion purchase price they are going to have to milk the cow dry.  Circuity won't matter when the longest CPKC service routes are the cheapest ones for shippers."  

This seems contradictory.  It's true that $31 billion price tag is an albatross that needs to be addressed, but there is a point when circuity matters.  And circuity is what is going to limit what CPKC can charge and still make money.  Example: A car from Mexico to Indianapolis for CSX delivery.  On the UP routing, UP takes the car to interchange to CSX in St. Elmo, Illinois (on a run-through train), then direct to Indianapolis, 1294 miles from Laredo.  If CPKC forces the interchange to CSX in Chicago (their nearest location), the mileage balloons to 1917 miles or almost 50% more.  So on a strictly distance basis, CPKC is going to take half again as long.  Throw in CPKC's limitation of a single route with steeper grades versus UP's directional running across Texas and Arkansas on flatter terrain and with much greater meet/pass capability, and the "new" CPKC routing will likely take twice as long or more.  That begs the question:  So can CPKC really afford to be cheaper and still pay of its debt?  And is it only artificially cheaper to get the business but isn't covering the cost of the operation?  And, given the doubling of car cycle time, can the shipper really afford the extra transit time?  This depends on the commodity, but the bottom line is that CPKC's route (and there really is just one) is so skeletal, that situations like this Indianapolis example will be the rule more often than the exception.  Sure, CPKC could force cars for Mobile and Wichita to move hundreds of extra miles via Shreveport to interchange at New Orleans and Dallas for a longer haul on their railroad (with great cost), but they're not going to "corner the market" on traffic for the Western USA; UP's still going to get that.

In the end, traffic tends to gravitate to the most-efficient, lowest-cost routes.  And that's never going to be CPKC north of the Mexico-USA border.

 

 

CPKC will poison-pill their portion of joint rates with UP to meet or beat the combined CPKC/UP routing rates.

See paragraph 4 in the UP lawsuit newswire story - this is exactly what UP is concerned about:

https://www.trains.com/trn/news-reviews/news-wire/laredo-and-houston-concerns-prompted-union-pacific-lawsuit-over-stbs-canadian-pacific-kansas-city-southern-merger-decision/

Post-Staggers/PSR, the most efficient routes don't always win out if one railroad has dominant control over a traffic source.  Its just too easy to manipulate joint rates and special car handling charges at interchange gateways.  All the shippers care about is what the final price is.  I'm sure many of them know that they are getting swindled in many cases, but its pretty obvious that the STB is useless in resolving these situations.  Typical American approach.  The ICC had too much power so we'll fix things by creating a new entity with not enough power.  Bad outcomes in both cases, but at least they're different bad outcomes.  Mission accomplished.

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Posted by SD60MAC9500 on Friday, May 26, 2023 2:44 PM

ns145

With control of that traffic, CPKC will force the long haul to the furthest distant US interchange points possible.  And with that $31 billion purchase price they are going to have to milk the cow dry.  Circuity won't matter when the longest CPKC service routes are the cheapest ones for shippers.  

Oh it will certainly matter for intermodal and its high operating cost... Carload not so much. 

ns145

The trouble is no Class I wants to steal traffic away from another carrier using such means.  Can't get a 55 OR going that route.  I don't dispute your "UP is physically superior argument", but given how rail economics currently work it all becomes irrelevant (which just goes to show how distorted everything has become in the rail industry).

 
Yet that's the only growth CPKC is touting siphoning traffic from UP, and BNSF.. Playing musical chairs with freight is not growth... 
Rahhhhhhhhh!!!!
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Posted by CMStPnP on Friday, May 26, 2023 4:04 PM

Vermontanan2
Not really.  KCS's presence in the Dallas area is pretty limited.  Actually, their line from Shreveport to Dallas is up to main line standards - good for 60 MPH for intermodal trains and has CTC.  Most of the intermodal traffic is to/from NS interchange at Meridian, Mississippi.

You said earlier it was a branch line.   Now it's a branch line / mainline?   How does that work?   

Vermontanan2
Should traffic to/from Texas balloon as you suggest, BNSF and UP will benefit to a much greater extent than CPKC can ever hope for considering their fantastically inferior routes.

.

Which is your strawman you constructed just to argue.   I stated that CPKC would benefit from strong growth in Texas and that fact was being overlooked the focus was on Mexico.    You go on and on about comparing to BNSF and UP.   I made no such comparison anywhere. 

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Posted by Vermontanan2 on Friday, May 26, 2023 8:55 PM

ns145

CPKC will poison-pill their portion of joint rates with UP to meet or beat the combined CPKC/UP routing rates.

I agree this will happen.  I also understand what UP is saying in the article.  But at some point, something has to give.  This is not a situation where the routes north of the border are even remotely comparable.  If CPKC does succeed in siphoning a significant amount of business away from UP, some entity somewhere will need to pay for the significant higher cost of moving the traffic that way, and this entity likely will squawk.

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Posted by Vermontanan2 on Friday, May 26, 2023 9:11 PM

CMStPnP

You said earlier it was a branch line.   Now it's a branch line / mainline?  How does that work? 

The line from Dallas to Shreveport is part of the Meridian speedway which is an east-west main line.  But since the topic of this thread is traffic to/from Mexico, the CPKC main line that would handle this traffic is the north-south route through Shreveport; Dallas is on a branch from this route and is likely not to see much of an increase in traffic to/from Mexico. 

CMStPnP

Which is your strawman you constructed just to argue.   I stated that CPKC would benefit from strong growth in Texas and that fact was being overlooked the focus was on Mexico.    You go on and on about comparing to BNSF and UP.   I made no such comparison anywhere. 

You miss the point, which is that any strong growth in Texas will benefit UP and BNSF primarily.  The affect on this growth on CPKC would be relatively minimal, since it serves a limited area of the state.

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Posted by CMStPnP on Wednesday, May 31, 2023 7:34 AM

Vermontanan2
You miss the point, which is that any strong growth in Texas will benefit UP and BNSF primarily.  The affect on this growth on CPKC would be relatively minimal, since it serves a limited area of the state.

I would not say the growth would be minimal by itself.   

Nor would I make the statement or implication CPKC will not do well in Mexico either based on the size or route structure of it's competitors.  KCS did fairly well on it's own.

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Posted by MP173 on Wednesday, May 31, 2023 12:34 PM

Just read in Railway Age that CPKC is ordering 1000 refer containers to handle the Midwest to Mexico perishables.  

Ed

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Posted by ns145 on Wednesday, May 31, 2023 5:23 PM

MP173

Just read in Railway Age that CPKC is ordering 1000 refer containers to handle the Midwest to Mexico perishables.  

Ed

 

Did you watch the linked Youtube video of MMX-181 entering Bensenville Yard?  Just a tad bit humorous given the extremely small number of containers arriving in Chicago.

https://youtu.be/X2qxfqjf9FA

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Posted by Ed Kyle on Friday, June 2, 2023 7:34 AM

That video showed one of the first trains.  Since then they have grown.  A couple of recent 181's carried more than 100 containers into Chicago.

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Posted by Ed Kyle on Thursday, June 8, 2023 8:42 AM

Largest 180 today, June 8, 2023, that I've seen to date through Iowa, with 4 autoracks and 68 intermodal platforms with 129 containers pulled by two locomotives.  On the other hand, 180 did not run on June 7, or June 5, or May 30, 28, 26, or 22 (Iowa dates).  Could be residual traffic slowdown from the Memorial Day holiday.  

Northbound 181 has run daily through Iowa this week so far, though only with 57, 78, 55, and 34 containers on Sunday-Wednesday respectfully.  It also was every-other-day during the May 21-28 period.  

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Posted by D.Carleton on Sunday, June 11, 2023 5:37 PM

Anyone have any intel on any of the capex CPKC said they would install between Chicago and Mexico?

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Posted by JayBee on Monday, June 12, 2023 1:50 AM

The sections of TWC are shrinking as new sections of CTC are being commisioned. Cotter, Letts, and Heinz sidings on the Ottumwa Sub. are being lengthened now. CTC is now continuous from Muscatine to NSS Camanche, then begins again at the Fifth St. Interlocking in Clinton, IA where CPKC crosses over the UP Geneva Sub into Savanna, IL except for the drawbridge itself. It continues up the Marquette Sub to just north of Bellevue, IA where a short patch of TWC connects to CN's CTC at Dubuque, IA. Short sections of TWC still exist from NSS Rutledge to the distant signal for SSS Cotter, and between Fruitland and Muscatine, IA. North of Dubuque the Marquette Sub is still TWC. A tie gang has been working on the Ottumwa Sub and could be seen working in the middle of the night on the Washington, IA railcam two weeks ago. I have seen notices in the news about various crossings on the Ottumwa Sub being closed for crossing replacement.

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Posted by jeffhergert on Monday, June 12, 2023 11:27 AM

I'm not sure I'd say Cotter to Rutledge is short.  Is it still dark territory between those locations?  How about south of Ottumwa?  Last I knew it was dark and TWC to Laredo or Chillicothe MO.  Then CTC to KC, with joint two main tracks between Polo and the KC area.

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Posted by D.Carleton on Monday, June 12, 2023 2:55 PM

JayBee

The sections of TWC are shrinking as new sections of CTC are being commisioned. Cotter, Letts, and Heinz sidings on the Ottumwa Sub. are being lengthened now. CTC is now continuous from Muscatine to NSS Camanche, then begins again at the Fifth St. Interlocking in Clinton, IA where CPKC crosses over the UP Geneva Sub into Savanna, IL except for the drawbridge itself. It continues up the Marquette Sub to just north of Bellevue, IA where a short patch of TWC connects to CN's CTC at Dubuque, IA. Short sections of TWC still exist from NSS Rutledge to the distant signal for SSS Cotter, and between Fruitland and Muscatine, IA. North of Dubuque the Marquette Sub is still TWC. A tie gang has been working on the Ottumwa Sub and could be seen working in the middle of the night on the Washington, IA railcam two weeks ago. I have seen notices in the news about various crossings on the Ottumwa Sub being closed for crossing replacement.

Thank you. Looks like a good subject for someone's YouTube channel.

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Posted by JayBee on Wednesday, June 14, 2023 12:30 AM

jeffhergert

I'm not sure I'd say Cotter to Rutledge is short.  Is it still dark territory between those locations?  How about south of Ottumwa?  Last I knew it was dark and TWC to Laredo or Chillicothe MO.  Then CTC to KC, with joint two main tracks between Polo and the KC area.

Jeff 

 

You're right I should not have characterized Rutledge to Cotter as short. It's about 40 miles. The long sections are between Ottumwa ans Laredo, about 100 miles, and north of Bellevue. I don't think either of those sections, along with the Chicago Sub. are to be addressed this year.

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Posted by Ed Kyle on Sunday, July 30, 2023 7:33 AM

During the past week (July 23-29, 2023), I only saw a total of two 180 and three 181 intermodal trains pass through Muscatine, Iowa, for a total 0.7 daily average.  No intermodals at all appeared during three of the seven days.  They haven't been running daily for awhile, but this was the fewest trains I've seen in a week since the start.

Other traffic seems slower too.  There was an average of only 5.7 trains per day.  3.0 of those were manifest (including the Nahant-Muscatine turns).  1.1 were unit trains (tanks, standard covered hoppers, and sand).  The rest were short locals or MOW trains.

 - Ed Kyle

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Posted by tree68 on Sunday, July 30, 2023 8:32 AM

Ed Kyle
Other traffic seems slower too.

I've heard that traffic (particularly IM) is down of late.

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Posted by blue streak 1 on Sunday, July 30, 2023 2:48 PM

tree68

I've heard that traffic (particularly IM) is down of late.

 
Here on the CSX A&WP sub the number of containers is noticiably down.  Especially the BNSF haulage trains.  There are many times the trains do not have even as many locos sometimes only 2. One daily one still has 4 locos and a full consist. No change in number of trains.
 
CSX is similar in number of IMs but are shorter.  Often have enough containers that just one loco would do.  However those mostly  are now 1x1x0 or 1x1. Ocassionally 2x1.  Can almost predict when they will come by especially from Fairburn.  All are well powered.  The auto rack trains are longer mostly unit trains except weekends.
 
Esentially the same for regular freights.  There has been a few times when a unit grain empty will be connected to a DPU empty coal train. 3x3x0. Now those are long trains that do not fit into any siding except Union City. But all trains do have plenty of power attached and appear to be on time although have no defined paper work.
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Posted by BaltACD on Sunday, July 30, 2023 3:41 PM

blue streak 1
 
tree68

I've heard that traffic (particularly IM) is down of late. 

Here on the CSX A&WP sub the number of containers is noticiably down.  Especially the BNSF haulage trains.  There are many times the trains do not have even as many locos sometimes only 2. One daily one still has 4 locos and a full consist. No change in number of trains.
 
CSX is similar in number of IMs but are shorter.  Often have enough containers that just one loco would do.  However those mostly  are now 1x1x0 or 1x1. Ocassionally 2x1.  Can almost predict when they will come by especially from Fairburn.  All are well powered.  The auto rack trains are longer mostly unit trains except weekends.
 
Esentially the same for regular freights.  There has been a few times when a unit grain empty will be connected to a DPU empty coal train. 3x3x0. Now those are long trains that do not fit into any siding except Union City. But all trains do have plenty of power attached and appear to be on time although have no defined paper work.

Summer - in general - is a slow time for all forms of business.  Work Forces are entitled to vacations and to a bigger extent many employees take those family vacations during June, July and August when kids are out of school.  Railroads likewise have a larger portion of their work force on vacation during these months.

Additionally from a railroad perspective, all the 'production' gangs are fully active during the warm weather months - Tie & Surfacing, Rail Gangs, Curve Patch Gangs etc.

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Posted by ns145 on Sunday, July 30, 2023 8:24 PM

.

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Posted by BaltACD on Sunday, July 30, 2023 10:52 PM

ns145
 
BaltACD

Summer - in general - is a slow time for all forms of business.  Work Forces are entitled to vacations and to a bigger extent many employees take those family vacations during June, July and August when kids are out of school.  Railroads likewise have a larger portion of their work force on vacation during these months.

Additionally from a railroad perspective, all the 'production' gangs are fully active during the warm weather months - Tie & Surfacing, Rail Gangs, Curve Patch Gangs etc. 

Since this happens every year I don't think it explains the 9.8% overall decline in intermodal traffic year-to-date versus 2022.  And 2022 traffic levels were down relative to 2021.

20-21 & 22 were all covid affected supply chain disrupted years.  Considering all the various reasons for diruptions I don't know how much reliance can really be place upon figures that compare to those years.

Thanks to covid we have three years of suspect data about all production and transportation figures.

Was watching a show about whales on PBS. Back in the days before whales were nearly eradicated - whales would feed on tons and tons of plankton and other such things at the bottom of the food chain.  Once the whales approached eradication one would think the oceans would be overgrown with plankton and others at the bottom of the food chain - NOPE!  Plankton and their ilk were fed by whale excrement - no whales, no excrement no food for the plankton.  There are drivers and linkages throughout the economy and transportation that are not easily visible on the surface.

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Posted by ns145 on Monday, July 31, 2023 3:46 PM

.

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Posted by Ed Kyle on Tuesday, August 8, 2023 3:14 PM

Weird day on the KPKC main in Iowa on Monday, August 7, 2023.  *Five* southbound manifests during the day through Washington, all sizable, with one typical northbound manifest also appearing along with a northbound 181 with 67 platforms/127 containers and 16 autoracks.  Usually only one or two manifests each way per day.  Not sure what to make of the southbound manifests, which must have hauled more than 700 cars toward Kansas City during a 16 or so hour span.  Could some have been detours?  (One had BNSF units on point and  DPU.)

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