Why do railroads run intermodal so fast?

[Anonymous]

QUOTE: Originally posted by gabe


From my experience of being stuck behind a trucker (ad nausium-sp?-) on the highway, I believe that vehicles driving at different speeds will use up capacity more quickly than vehicles driving at different speeds.

Gabe, correct me if I am mistaken, but I think what you meant to say is "...vehicles driving at different speeds will use up capacity more quickly than vehicles driving at the same speed."

On your other points, it does beg (for me anyway) the question of whether it would be more valuable to increase the hp/ton ratios for drag freights up to the hp/ton ratios of TOFC's and other fast freights. My view is that it all should move at the same relative speed.

[Anonymous]

Problems with split speeds on the interstate shows that traffic capacity is actually reduced by the blockage.

Blockage is usually either a 18 wheeler governed at less than max legal limit or rolling at a limit that is about 10 miles an hour less than those of cars. Forcing all the drivers to pass on the left. Sometimes the left is one lane and not two.

Faster 18 wheelers also have to pass and speed differences of 1-5 mph between truckers excaberate the situation. Especially to all the 4 wheelers who grow impatient by the second.

In states with split speeds you will find alot of capacity wasted. It is easier and safer to roll with the traffic speed at the pace set by the cars. Sometimes you risked a citation for speed to avoid much bigger problems caused by impatient drivers.

I would think railroads are the same when everything runs close to the same pace instead of everyone having to get around each other.

Shipping finds themselves a speck in the ocean. This I think does not apply to ships until they get into Littoral or Port waters.

[gabe]

QUOTE: Originally posted by RIRR80

Gabe, Excellent thread. Very informative thoughts to us newbies. And no flaming! I just wi***hat we could make all our products in US and wouldn't have to discuss shipping times from Hong Kong.

Thank you for the compliment.

Just an aside on your wish: I don't blame you for wishing that. But, and perhaps you know this, the biggest reason that such products come from over seas is not necessarily the superior ability of foreign competition, but the need and policy of the FED to keep a check on inflation. Greenspan and others have written some fairly interesting analyses of why it is important to move such products over seas.

When 70-80% of the American population has had significant post-high school education, it is very difficult for the producers of such products to make them in America at a price that would not drive up inflation--as a college grad expects to make $60,000+ per year.

I am not taking a position, or asserting one side is right or wrong, I am just asserting that it is interesting reading if you are into that sort of thing and want to know why such products are going over seas.

Gabe

[gabe]

Wow, very interesting. I guess the only unresolved question I have, then, is “I wonder what is the cost of speed v. the benefit of equipment utilization created by speed.”

From my experience of being stuck behind a trucker (ad nausium-sp?-) on the highway, I believe that vehicles driving at different speeds will use up capacity more quickly than vehicles driving at different speeds. I would think the same would hold true for trains--whether single tracked or double tracked, especially in non-CTC territory. I also imagine that higher speeds require more maintenance of the right of way.

Then again, there is an obvious benefit for quicker turnaround times as described by Mark, Ed, Ed, and everyone else above.

I find the competing costs of speed v. capacity & upgrades to be interesting.

Thanks,

Gabe

[Anonymous]

Gabe, Excellent thread. Very informative thoughts to us newbies. And no flaming! I just wi***hat we could make all our products in US and wouldn't have to discuss shipping times from Hong Kong.

[gabe]

Oh, I see what you are saying, Antigates. Silly me; I should have seen that all along. Perhaps if you had written more on the subject, your gidance would have brought me to understanding earlier.

Gabe

[Anonymous]

QUOTE: Originally posted by gabe

However, (in Gabe's opinion) it is simply incomprehensible that a customer really cares that much about 7 hours when you are taking about a four week transit.

Gabe

Well, I guess you've pretty much answered your own question there...

[Anonymous]

The speeds of 23 to 25 mph overall is not much different than trucking's 35 mph which I used as a template.

The moment I get new load orders from dispatch, I apply the 35 mph to roughly see if the delivery time is feasible. If it fails that test then I examine mileage, times etc with dispatch before I accept or reject (Yes you CAN say no to dispatch) load on "My" 5th wheel.

There is also service at the port proper for layovers for the crew, longshorement to handle the cargo and the occasional needs of the ship that eats into transit times.

I personally could care less if that train ran at 70 or 30 mph. I would want my cargo to be moving constantly. Not sitting. No widget is so important except military loads in time of war. Then I would seek Engineers or Truckers who are lacking in nerves and strong in speed.

Everything else has to move some how. Does it really matter if it got there 7 hours earlier on the same day? Yes it does. The many years of verbal abuse I have seen dished out if your load is late indicates it is vital to get said load there ASAP.

If we can find or build shipping that can make the transit at 40 knots, not only we will improve the percieved service but make business that might justfiy a fleet of such ships.

If I was a shipping firm, 20 knots aint gonna cut it. I want faster ships. The same way I would want faster trains or trucks.

[Anonymous]

Biggest 6600 TEU ships cruise at 25 kts.

Evergreen needs 15 days to get from Hong Kong to LA.

I think that the biggest stretch - Hong Kong - NYC would take 20-22 days using maersk on average. The railroad by choosing 40 mph over 60 mph will add one day.

It would look like this:

1 day loading
11 days transit
1 day transloading
2 days on UP/BNSF
(optional 1 day for turmoil in bottlenecked Chicago :D)
1 day on CSX/NS
1 day final delivery

17 days and add the fact that the load might not originate at the same day as the ship leaves the port. that is 17 to 24 days. That is about 9000 miles or avg speed of 22 to 16 mph - which isnt all that impressive.

If railroads had chosen 40 mph (one extra day) the speeds would drop to 20 to 15 mph. Which is pretty pathetic ^^ and visible in the big picture (UP's avg speed dropped from 25 to 23 mph and everyone says that it is a catastrophic meltdown)

So the reason why railroads run intermodals fast - apart from what was already told (better equipment and crew utilisation, hot UPS shipments, competition against trucks) - these trains are relatively light (and very light for the value they carry), so running them fast is easy - and running fast pays more since more trains can be pushed through the same capacity since faster trains use less of it.

Alas, that is my guess.

[MP173]

Gabe:

I think the answers are all here. Just connect the dots. You could take this to the next extreme and keep adding 6 hour increments to the time.

At some point, time is money. For everyone. For rails it is the capital cost of the equipment. By going on a scheduled railroad system, CN has found that the need for equipment and locomotives is dramatically being reduced.

"The extra seven hours" may be the result of many many factors including market forces, capital costs, schedules, and others.

It would be interesting to know what the cycles are for Powder River Coal. Now, there is a case where there is no apparent economic reason for the coal moving faster, except for the equipment utilization. Case in point is the large inventory of coal sitting at power plants.

ed

[gabe]

I think we are back to the point of not understanding my question.

The whole point of the post is: why is there a value of having your widgets arive in 30 days and 4 hours compared to 30 days and 11 hours?

Obviously, if a customer prefers the service of 30 days and 4 hours instead of the added 7 and is willing to pay for it, then of course, go after the business. However, it is simply incomprehensible that a customer really cares that much about 7 hours when you are taking about a four week transit.

The other posters, are suggesting that the customer really has very little to do with the fast running time--as the enormity of volume at these ports allow faster train turnaround times to do more with less. I find this theory persuasive.

Gabe

[Anonymous]

QUOTE: Originally posted by gabe

It has nothing to do with liking or not liking your answer--or disagreeing with it for that matter. I just felt as though I was unable to convey my premise of what is the point of shaving a few hours off when transport takes a few weeks. I was merely conveying my belief that I was not able to convey my premise--not an expression of not liking your answer.

Gabe

Well, ships may not have to compete with trucks, but trains have no choice...so if the truck is gonna promise 20 hour transit from point A to point B, and the customer sees value in that, the the train has 2 choices....go after that business, or surrender it.

I'll tell you what I think is irrelevant....the time it takes on the ship compared to the time spent in land transit.

Regardless if it takes 20 or 30 days to cross the pacific, thats gonna be out of your (the customers) hands

But once the freight reaches US soil, the customer has options that he has some degree of control over,...and if the perceived value (of getting the order delivered sooner) is motivating to the customer sufficient that they will pay the premium for expedited service..."WHY NOT" offer the service?

[gabe]

Also,

I felt fairly safe saying a Maserk container transport could not make over 30 kts, as Google indicated that Nimitz Class Carriers speed was over 30kts.

Gabe

[gabe]

As far as the 11-day transit, others are explaining my premise the way I see it. When I say a month, I am taking into account the amount of time it takes to get the product from the factory to the ship, the time it takes to load the ship, the time the ship spends waiting for a berth to open up (according to Trains, that has taken as much as three or four days) the length of time to unload the ship, the length of time to sort the containers, and the length of time to load the train.

11 days is truly impressive. I must admit, I was thinking 15 at the bare minimum, as cargo ships built in the late 70s were rated at 22 kts max speed, when I did a google on it, and our fastest military ships of WWII, could only make slightly over 30kts.

Nonetheless, I would be willing to bet the whole process takes at least 20 days, even if they can cross the ocean in 11 days.

Gabe

[gabe]

QUOTE: Originally posted by TheAntiGates

QUOTE: Originally posted by gabe

Antigates,

I am not saying your wrong. I am way to ignorant on this subject to make such a bombastic statement. However, it just seems to me that you are missing my premise.

I know what you are saying about steamships not having to compete with truckers. But, what I am saying, is that is an irrelevant red herring. Futuremodal, Greyhounds, Oltmand, MP173, and others have given me good explanations that, at the very least, shed light on my conundrum.

However, I still stick to my initial premise that--absent some of the other reasons referenced above--truck competition with steamships vel non, it makes absolutely no sense to me to pay a dollar more for freight to have it arive in one month and 4 hours instead of one month and 11 hours. It seems irrelevant to me that steamships aren't competing with trucks, all that really matters is the infintesible difference reflected in the bottom line.

Gabe

Gosh Gabe,

Now you are throwing in this last minute curve that the decision must be RATIONAL? It is people we are talking about right? [:D]

Hey, if you prefer the reply's of Futuremodal, Greyhounds, Oltmand, MP173, (and others) over mine, then no one is twisting your arm to go with my speculation.

In a perfect world you run your business perfectly. You make golden sales forcasts, and build and deplete inventory in perfect coordination with the perfectly targeted sales forcasts.

But,..when you blow it,..and sales out strip your forcast by a sizable margin ...what do you do?

You order more and chew nails until you have more salable product in your hands.

The real point I was trying to make,..is that MAYBE if you are a Walmart...you represent sufficient volume that you can get the shipping companies to do backflips for you...set up a dedicated trans pacific flotilla, just to appease yout need.

But, if your total annual volume is 100 containers,...and your current urgent need is for 10 of those.....do you really think the shipping company is even gonna CARE that you are in a hurry?

And even if they did,....what could they really do about it?

So, you wait...

Now, if you are in a "hot channel" product line,..every day that you are out of stock on the item you await,...is a day that your customers find someone else to fill the need that you cannot.

So, in this admittedly contrived (but by no means outlandish) set of circumstances...if the materials get to you in 31 days arriving at your dock at 10:00 Am in the morning ...you are in bettershape than if they can't arrive until 6 PM,.. after your loading dock crew has been home for 2 hours already...

My revised short answer to you is "Time is money" regardless of how you slice it.

They expected that Federal Express was going to be a catastrophic failure too. Assuming that no one in their right minds would be so impatient to pay such a premium for transportation.

Never underestimate the capacity of mortal men to be vain where time is the concern.

If you don't like that answer, well,,, so sorry

It has nothing to do with liking or not liking your answer--or disagreeing with it for that matter. I just felt as though I was unable to convey my premise of what is the point of shaving a few hours off when transport takes a few weeks. I was merely conveying my belief that I was not able to convey my premise--not an expression of not liking your answer.

Gabe

[Anonymous]

Regarding the 11 day Maresk passage... it will take more than that to get the item OUT of the factory, TO the ship sailed across then in the port etc...

I think another issue is Port Capacity. Baltimore has "Anchorage Grounds" down the Cheaspeake near Annapolis that serves as a "Parking Lot" for ships waiting to dock. I suspect some of these could take a few days.

Also shipping comes from many ports not just the far east. You have Austrailia, India and the Med that have challenging sea passages to get to US shores.

[Anonymous]

QUOTE: Originally posted by uzurpator

First of all - you need to get your facts straight.

Maersk needs 11 days to get from Hong Kong to LA.

www.maersksealand.com

That is average speed of ~27-28 mph - so it matches the speed of the train.

You make a good point regarding the fact that the fastest ocean carriers can match the average transit speed of U.S. railroads, but on average it takes the major ocean carriers such as Hanjin, Hyundai, Evergreen, et al (e.g. the post-Panamax ships) longer to transit the Pacific, while the average transit speed of intermodal is probably more in the 35 to 40 mph range. The 25 mph standard for U.S. railroads is more geared toward carload freight which don't necessarily participate in the import/export trades. Carload freight tends to get bogged down during terminal reclassification duties.

You should also note that, although the fastest ocean times can approach 25 -27 mph, that is between the port of last call on the Asian side and the port of first call on the American side. Most containerlines tend to hit multiple ports before making the Pacific crossing, wherein they will hit multiple ports on this end. If you are shipping a container from Kyoto to Seattle, but the carrier calls at a few other ports Asian side, calling finally on Hong Kong before crossing over to LA, thence up the coast to Oakland, Vancouver, and then finally Seattle, you know it's going to take probably twice as long as that 11 days. Even so, those container trains from Seattle to the east are going to move just as fast as those container trains from LA to the east, so Gabe's original observation is still valid.

[Anonymous]

QUOTE: Originally posted by gabe

Antigates,

I am not saying your wrong. I am way to ignorant on this subject to make such a bombastic statement. However, it just seems to me that you are missing my premise.

I know what you are saying about steamships not having to compete with truckers. But, what I am saying, is that is an irrelevant red herring. Futuremodal, Greyhounds, Oltmand, MP173, and others have given me good explanations that, at the very least, shed light on my conundrum.

However, I still stick to my initial premise that--absent some of the other reasons referenced above--truck competition with steamships vel non, it makes absolutely no sense to me to pay a dollar more for freight to have it arive in one month and 4 hours instead of one month and 11 hours. It seems irrelevant to me that steamships aren't competing with trucks, all that really matters is the infintesible difference reflected in the bottom line.

Gabe

Gosh Gabe,

Now you are throwing in this last minute curve that the decision must be RATIONAL? It is people we are talking about right? [:D]

Hey, if you prefer the reply's of Futuremodal, Greyhounds, Oltmand, MP173, (and others) over mine, then no one is twisting your arm to go with my speculation.

In a perfect world you run your business perfectly. You make golden sales forcasts, and build and deplete inventory in perfect coordination with the perfectly targeted sales forcasts.

But,..when you blow it,..and sales out strip your forcast by a sizable margin ...what do you do?

You order more and chew nails until you have more salable product in your hands.

The real point I was trying to make,..is that MAYBE if you are a Walmart...you represent sufficient volume that you can get the shipping companies to do backflips for you...set up a dedicated trans pacific flotilla, just to appease yout need.

But, if your total annual volume is 100 containers,...and your current urgent need is for 10 of those.....do you really think the shipping company is even gonna CARE that you are in a hurry?

And even if they did,....what could they really do about it?

So, you wait...

Now, if you are in a "hot channel" product line,..every day that you are out of stock on the item you await,...is a day that your customers find someone else to fill the need that you cannot.

So, in this admittedly contrived (but by no means outlandish) set of circumstances...if the materials get to you in 31 days arriving at your dock at 10:00 Am in the morning ...you are in bettershape than if they can't arrive until 6 PM,.. after your loading dock crew has been home for 2 hours already...

My revised short answer to you is "Time is money" regardless of how you slice it.

They expected that Federal Express was going to be a catastrophic failure too. Assuming that no one in their right minds would be so impatient to pay such a premium for transportation.

Never underestimate the capacity of mortal men to be vain where time is the concern.

If you don't like that answer, well,,, so sorry

[daveklepper]

There is the whole matter of equipment and crew utuikuzatuib,

[Anonymous]

First of all - you need to get your facts straight.

Maersk needs 11 days to get from Hong Kong to LA.

www.maersksealand.com

That is average speed of ~27-28 mph - so it matches the speed of the train.

[edblysard]

Well,
Answer a question with a question...

Why, after such a long and time comsuming trip, would they be in such a hurry to unload the ship after it docks?

After all, it took forever to get here, right?

Because they have to turn the ship back, and head out to get more containers...

Why run a container train so fast?

Because, the number of cars available to move the containers is limited, and less than the number of containers needing to move, there are more containers on the way, in a continious loop...

How long the containers take to arive at the port is irrelevent to the railroad, the fact that there will alway be more, arriving hourly, is what drives the speed of the trains up.

I dont care how long it takes a grain train to arrive here, but I do care how long it sits in my receiving track, because every hour it sits there is one more hour the next train due has to wait to get in, and there is another train behind that one, and another, and another...how long it took them to get here dosnt matter to me, how long they sit here in the way does.

The rush isn't so much about whats in the containers, but is about how long they occupy my tracks...the in-flow of the containers is constant, there is how many hundreds of ships headed this way?
The cars, crews and locomotives needs to move them is also constant, and less then the volume of the containers.
So my ability to move the containers is limited, unlike the ships, I have a fixed in place structure to move on, so speed equals volume, which equals profit.

Ed

[Anonymous]

**Ahem.. customers expecting freight of whatever kind are usually on THIER own schedule.

For example.. Kroger foods wants your meat load delivered onto their dock by 11 AM in some locations so they can ship that evening. If you dont make that 11 AM cut off, you are likely to lose that day, the next day and have to catch up with trying to find a load once you did get empty.

Ships want trucks and trains to take thier burden off.

I sometimes wonder how many HO Scale Precision Craft Models are on the way across the Pacific as we type this thread?

[Jack_S]

QUOTE: Originally posted by gabe

It may seem like there is an obvious answer to my question. But, please read on.

I was watching an interesting show about the Panama Canal last night. It was showing ocean liners carrying intermodal containers and it talked about the transit times of these ships.

Think about it:

The time it takes to transport the containers from the factory in China to an intermodal port, the time it takes to load these containers onto the ship, the time it takes for these ships to transport these containers several 1000s of miles at 15 knots, the time the ships spend waiting for a berth to open up in port, the time it takes to unload them, the time it takes to sort them, and then the time it takes to load them on the train.

It seems to me that the time saved by running the train at 60-65 mph instead of 40 mph is so meaningless compared to the overall time it takes to ship the container that the benefit is almost unnoticeable. It is like trying to save $1 by buying the small beer at a NFL football game after you have already spent $300 on the tickets and $200 on the other over-priced amenities.

Furthermore, running trains at significantly different speeds makes for greater dispatching problems and cuts into line capacity. I understand why some purely domestic trains, roadrailers, and UPS trains are run faster than normal, but Maserik intermodal containers? I don't get it.

Hope to have an excellent discussion with everyone to make up for that other topic that the evil genius out smarted us all with . . . again.

Gabe

One point to be looked at is the number of containers that pass a given point in one time interval. Yes, ships are slow but they carry a incredible number of containers compared to a train. And they are moving 24/7. So they carry a larger number past any given waypoint than a train can even at a higher speed. The big problem is not to go fast, it is to prevent going very slow or stopping. In that the ports are the big obstacle.

But the basic reason the RRs run that fast is simply that some customers will pay more if they do. The customers have a time problem: they perceive a market for something and order it. If it takes too long to get the goods to the stores, the fickle market may disappear and they will be left holding the bag. So they are willing to pay extra to reduce shipping time even by a matter of a few days.

Jack

[Anonymous]

Gabe:

What if the real difference between one month and 4 hours vs one month and 11 hours is an arrival time of 6 AM for the former vs 1 PM for the latter? Makes a big difference if the former allows stock to be placed on shelves while the latter makes you wait one day. In this case, the difference of 7 hours turns into a difference of 24 hours.

In reality, except for the short haul lanes, the 20 mph max speed difference in your original example tends to translate into days, not just hours, for the longer haul corridors. Statistically speaking, the more expediently you get on down the road will lessen the likelyhood of delays such as crews going dead before the next crew change, having to go in the hole for UPS-TOFC, etc.

It was stated best when it was stated, "Why does everything else have to move so slow?".

[gabe]

Antigates,

I am not saying your wrong. I am way to ignorant on this subject to make such a bombastic statement. However, it just seems to me that you are missing my premise.

I know what you are saying about steamships not having to compete with truckers. But, what I am saying, is that is an irrelevant red herring. Futuremodal, Greyhounds, Oltmand, MP173, and others have given me good explanations that, at the very least, shed light on my conundrum.

However, I still stick to my initial premise that--absent some of the other reasons referenced above--truck competition with steamships vel non, it makes absolutely no sense to me to pay a dollar more for freight to have it arive in one month and 4 hours instead of one month and 11 hours. It seems irrelevant to me that steamships aren't competing with trucks, all that really matters is the infintesible difference reflected in the bottom line.

Gabe

[Anonymous]

Good points all, Mr. AntiGates. As an individual, I would get very antsy waiting -- is it really close to a month? -- for goods to cross the Pacific. As a cold (or at least value-neutral) institution like Wal-Mart (or Target, or Home Depot, Menard's, etc.), I'm not sure my employees would individually get close enough to large-scale freight movement to really impose a time-frame on and worry or care much about any particular movement--with obvious exceptions, of course, like buyers who have had to keep their own special info about CD's and toys, etc., to themselves for the good of the company.

[Anonymous]

QUOTE: Originally posted by gabe

QUOTE: Originally posted by StillGrande

Because they are trying to keep service comparable to a truck going 75 on a highway to the same place.

OK, to restate my premise:

Say a fast intermodal or truck's speed of 60 mph makes the 1000 mile transit in 17 hours. Whereas the train's speed of 45 mph makes the trip in 22 hours. Why on earth would the 5 hours amount to a drop in the bucket when compared to the WEEKS that is took to get the container on the train.

So what if trucks or a fast train gets it there 5-7 hours faster? It is still a 5-7 hour difference on a container that would take at least a week to get from the factory in China to the train. At best, you are looking at a 32/33rds difference in time, and I think that is being very generous.

a). Because the ocean going liners don't have to compete with trucks? A "slow boat from china" is still a slow boat from china ...no matter who pilots it. Whereas once the containers hit terra firma the green flag falls

b). Volume: if you are a merchant expecting 20 containers full of merchandise, you probably have very little control on selecting one overseas container company over the other, IN THE CONTEXT OF SPEED, and as such a small customer you are not going to be able to command priority routing from the ship. However, once the containers are on land, you can barter with the devil all you want as far as who is willing to promise you what, with those contending forced to butt heads on details.

and.

c). timing... Perhaps after HAVING to wait for that slow boat from china to make it's 30 day transit...the welled up anticipation of customers waiting for their goods makes that last 4 hour differential transit time all the more critical?

If you've been forced to wait for your order for 30 days already, which is better to the impatient mentality? waiting 1 day longer or 2 days longer to take delivery.

You put the pressure on the point you can actually control...

[Anonymous]

A long reply, which may ask more questions than it answers[8)].

[:)][:)][:)]

Gabe, you asked several challenging questions in your original posting, with more to follow. I do perceive a lack of “core” questions that might have been addressed by others prior to in-depth discussion of turbinage, demurrage, etc. I am certainly grateful for the many, many intelligent and informed answers and comments you received; therefore so please don't think I'm being patronizing if I play this a little bit along the “For Dummies [like me!] approach…..

”The time it takes to transport the containers from the factory in China to an intermodal port, the time it takes to load these containers onto the ship, the time it takes for these ships to transport these containers several 1000s of miles at 15 knots, the time the ships spend waiting for a berth to open up in port, the time it takes to unload them, the time it takes to sort them, and then the time it takes to load them on the train.

It seems to me that the time saved by running the train at 60-65 mph instead of 40 mph is so meaningless compared to the overall time it takes to ship the container that the benefit is almost unnoticeable. It is like trying to save $1 by buying the small beer at a NFL football game after you have already spent $300 on the tickets and $200 on the other over-priced amenities.”


I agree with everyone about the basic trade-off between speed and cost (which, in RRing, often stems from the trade-off between speed and TORQUE.). Coal is a great example of the freight that's not in a hurry. If you can put it on something slick (the Mississippi River, the Teneessee-Tombigbee Waterway) that actually is moving the way you want it to go, then that's about the cheapest of all. Don't look for barges to disappear anytime soon; in fact, barge-makers’ stock has begun going up. Second cheap, of course, is dragging it over water—such as exporting coal down the aforementioned waterways to South America (Or maybe I’m just worked up over those soft-core coal-mining vixen in the GE commercial!)

It sounds simple, but it is very high-tech, and along with economies of scale the more high-tech it is, the cheaper. Think of the scene with Marlon Brando unloading bananas in the movie “On the Waterfront” and how that might proceed today. Much less labor-intensive!

And, I am compelled to say that other than air, the most expensive is to consolidate it (COFC, TOFC) and put it on something man-made but low in friction: a semi trailer, a scheduled intermodal run. I think everyone's right in that higher fuel costs hurt everyone, but turn out to be a comparative advantage for the RR's over individual or individual-under-contract long-haul truckers. (There was a fascinating article about five weeks ago in THE NEW YORKER about two guys' deadheading fresh, live lobsters from Nova Scotia to UPS' mega-facilities in Memphis, which will now keep the crustaceans alive until their customers call for them. The article is as much about how the shipper becomes the de facto wholesaler as much as it was about two truck drivers avoiding I-81. This makes a point about service bundled into transportation, which I will return later.)

If I may give fle***o your concern about the inefficient time lag between China and store shelves, why would, say, Wal-Mart need weeks or months ago (probably weeks) to get its action-figures cued to the new "Star Wars" movie on a slow boat from China and then a moderately expensive drag from Long Beach or wherever to Proviso or wherever then Albany or wherever.

I apologize if I missed something, but I didn’t see people making hay out of the fact that these days, the super carriers of goods or petroleum are HUGE--too big for the Panama Canal. So sending out a couple of ships that are merely medium-large to transit the Canal would be inefficient, and much worse would be sending out one of those new whoppers and then intermodal'ing the goods twice across the Isthmus to another waiting super carrier. [Trivia Note: The Genessee-Wyoming owns the Panama Canal Railroad.]

So, let’s say I'm Wal-Mart and I want my zillions of cases of Obi-Wan Kenobi figurines to the USA. Even if it were cheaper (and it isn't) to go round either Cape than use a slow boat from China, I suspect reliability is the norm. Nor is it a matter of air-freight being cost-effective when shipping light but small like Obi-Wan figures (up in the air, weight still counts a lot, as well as space.) Wal-Mart will plead that masses of figurines meet “consumer demand,” but try demanding that Wal-Mart ship via DHL the right kind of Obi-Wan for my niece. I wouldn’t think of it; but it isn’t because the doll is no longer profitable. It would be, but not as much as it is now when Wal-Mart has established itself as more than a dominant force but a market-maker Note that store leaders get little if any advance word on what’s coming into the store and have less than no input about what they’d like to see on their own shelves.. Now that twenty-dollar GE iron, also from China. No, nobody’s about to air-freight that ‘cause heavy still matters in air freight and irons – well, they’re heavy as irons (;)[:p]. If it were a new steam-release valve for your new $175 Krups steam iron, it might get air-freighted from New Jersey or Germany or the Far East.

Gabe, I didn't think of this until you challenged us re logistics but shipping deadlines, like transportation boxes themselves, can have different "modes." Wal-Mart is in no hurry for the Star-Wars figurines because they started chatting with George. Lucas and friends a good three years ago. Two years ago people (frequently now abroad) were designing them, then W-M bargained with Kenner or Mattel or whomever for specs and product launch (not for nothing do our nation’s largest corporations have big shiny regional hdqtrs as close as possible to Wal-Mart hdqtrs in Bentonville, AR, and the process is more integrated than I’ve made it seen.) Finally, W-M has probably already dealt with the shippers (BNSF, UP, CN) or expediters/logicians (Pacer International, Inc.) a LONG time ago--maybe as much as a year or more. (Point to ponder: does Wal-Mart draw up its own cost-of-fuel contracts to counter the RR lines’ guarantee-of-escalator contracts? Crazy if they don’t.) So a fuel-efficient super carrier takes ten days to a fortnight instead of a week. Who gives a doodle? Wal-Mart’s got the exclusive on Obi-Wan and Barbie, so there’s nobody out there to sneak-release them first. So the Guangzhou-to-Shanghai Railroad is going to triple its track, reducing from 3 days to one the time it takes to traverse the entire main line? Big whoop! (But it will matter for average carless Chinese who will see their trains jump from a 1910s level of speed and comfort to a 1950s.) Also, that extra day or two may come in mighty handy, especially if there’s a typhoon or hurricane to be dodged. Perhaps our shipping mavens will speak to that.

So with a combination of reliability, planning and bargaining for the most efficient and cheapest routing, those Obi-Wan Kenobis and Barbies and that wonderful $20 GE iron, all from China with their pennies-on-the-dollar-and-you'd-better-like-it labor, at Wal-Mart, can be so INCREDIBLY cheap! My hunch is that Wal-Mart, after hitching their wagon many years ago to Messrs. Lucas and colleagues, operates on fairly pessimistic supply-and-transportation paradigms, because the figurines, much to this Uncle's consternation, always seem to wind up in the stores about five weeks ahead of the movie premier. So why doesn't Wal-Mart hold the items at its (global) intake facilities or ports, or at its (regional) warehouses?

BECAUSE THEY CAN'T. And that's the mixed blessing of "just-in-time" inventory. Nothing can sit still! (Canadian National's 2004 report very cleverly has as its cover photograph an empty rail yard, and inside the caption explains that all CN's motive power and rolling stock are out there earning money, not idling away at the yard.) So that’s the devil in the details: if the stuff is punctual and not damaged (however slow) that’s fine, as long as it’s punctual. Punctuality counts too, once the goods enter Wal-Mart’s custody. But for slightly different reasons: not only is at (1) too “hot” an inventory environment these days to cool things by lying around US warehouses or pay demurrage or whatever; but (2) whenever Obi-Wan shows up, even if it’s five weeks early, there’s a good chance that Wal-Mart will do its best (sans heroics) to make sure that the figurines in Portland, OR don’t arrive that much earlier than those destined for Portland, ME. So slow-boat from China is one mode, and TOFC, stacks or daredevil trucking teams are another shipping urgency—one of the concepts of intermodality is, in fact, that things like schedules that seem counterintuitive on the surface really aren’t once an understanding is reached that ASAP is good for some situations and not others, and it almost always costs more. Let’s not assign morality to transportation: It isn’t the least bit “hypocritical” to take ultra-slow crossing of the Pacific with medium-to-very fast ground shipping here at home. It’s the consolidated results that matter; as I keep stressing reliability as well as a coherent cost. Perhaps instead of asking “Why is intermodal so fast” you might have asked, “Why can’t everything be as fast, ASAP?”

Which gets me to unit trains. Gabe, I don’t think your idea of speeding up unit trains is a great one, for reasons that have been touched on as well as a couple of new ones. First, in the eternal struggle between torque and speed, “patient” coal or iron filings or gardener’s stone (but mostly coal), it’s best to sacrifice speed for torque. And that’s why the unit coal trains I see in Rochelle, Ill., headed for places like Wisconsin Power are pulled by a two or three frequently begrimed and old (probably all-DC) units, with perhaps a pusher on the end. A power plant is a great example about a service/industry that doesn’t have to worry too much (barring strikes, fuel shortages, inflation!) about what it needs—it needs the specified coal, it needs to be absolutely sure enough is on hand at all time, and (a luxury in today’s just-in-time era) it probably has a pile or two of “patient” coal out back (again coal supplies, unlike Omaha Steaks or Obi-Wan, don’t mind getting dumped on the ground and even snowed on a little).

So, for a coal unit train the operating rate of speed has a lot to do with money, and possibly also a lot to do with local politics. According to figures (a couple of years old, I admit) from the DM&E, it takes two and-a-half minutes for 120 cars of an empty unit train to pass by a crossing at 40-45 mph. Make that 150 cars of laden coal train with a speed below 35 – it may be the cheapest in terms of fuel to go at 20 but a third more cars and almost two-thirds less speed is simply unacceptable. Even a third more cars and only a third less speed (35 mph) is pretty wearing. Studies have shown that citizens are OK about waiting for a slow train at a grade crossing for up to that 2.5 minutes, but at about three (all of 30 sec. later) they start getting antsy and they REALLY heat up after four! For more background, Google for “DM&E,” “Schieffer” “unit trains” and “Rochester, Minnesota.” I suppose with today’s huge, usually hump-free and LONG logistics centers, the Class One’s could probably marshal up 200-car unit trains. Bad idea! Even if three weekly dumps at that Wisconsin power plant would equal the tonnage of five Mon-Fri 120-yard trains, consider that: (1) incremental savings would be slight; (2) the electric co. likes to hear the reassuring thunder of coal every working day; and (3) most of all, it would be totally unacceptable to folks in places like Rochester, MN and smaller communities like Rochelle, IL, where grade crossings are the norm. Moral: for unit trains don’t think “wayward shuttle,” think “Berlin Airlift.” And, with today’s longer sidings, several coal trains in motion will not “clog” the system. Thank modern CTC.

I think the people who spoke before me are using their transportation expertise and common sense and rightly judged consumer goods to be in an intermediate position of urgency between unit train and UPS. UPS intrigues me. Lots and lots of TOFC with the UPS label pounds over that double diamond at Rochelle, Illinois, mostly BNSF but some UP; and once in a while, when such trains are running slower than their usual 50-ish mph, I can hear machinery humming and see fans whirling in some of the UPS trailers. Is it a ventilator? Or is it even possible for generator/alternator to summon up enough power to run refrigerated or frozen? (I’m not talking about fridge cars, mind.)

For that matter, when I have Amazon books shipped at their cheapest level of delivery, that usually involves separate shipments, all of which I could track out of Seattle or northern Nevada (near Reno, I think); and the same for my Tampa cigars that routed through Jacksonville, FL, then Lexington, KY, then Dolton, IL (south suburban Chicago). For the most part, I no longer can; instead I receive a cold but correct computer message to the effect that “You’re not a corporate shipper so all we’re going to tell you now is that your order is scheduled to get to you on time.” Could UP be marshalling up parcel trains at Global III to head into Chicago? Or BNSF sending their stuff—it’s quite possible—all the way downtown in Chicago to that huge UPS hub? The stuff is frequently late (but it was frequently late when it checked into Chicagoland at Dolton, having come up the Interstates by their trucks). Could it be that some company like Pacer, International is routing the stuff by rail? (Interesting company; I have their 2004 Annual Report in hand. Made a ton of money last year, and, if “non-asset-based” means what I think it does, they don’t even own most of those pretty blue Pacer/Stacktrain mods.) Perhaps the transport pros would like to speak of the phenomena of service companies like Pacer (again with the service!).

The chain of supply under "just-in-time" regimes may indeed be too tight. On the other hand, new technologies have brought new cost efficiencies to shippers. This is Rochelle scuttlebutt, but it's probably true: the local farmers can get a dime more a bushel for their corn (a not inconsiderable amount) if they bring it straight to the railhead itself and not to the local elevator! Ah, a new kind of service--or even if it's foregoing service, there's a calculable saving!

Oh brave new world...[:0]

In closing, who among our ocean-transportation experts can recommend the biggest trans-Pacific companies? I have an A.R. from Alexander & Baldwin, but doubt that that is anywhere near the biggest carrier, except possibly to Hawaii.

[spbed]

Yes if Gabe has not yet done it he should secure some major Pacific SS lines schedules & analyze them. Then I am sure he will understand far more about international traffic then he does now. [:o)][:p]

Originally posted by BaltACD

Originally posted by Murphy Siding

Living nearby to MP 186 of the UPRR  Austin TX Sub

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