Why do railroads run intermodal so fast?

[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.

[daveklepper]

There is the whole matter of equipment and crew utuikuzatuib,

[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

[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]

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.

[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

[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]

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

[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]

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

[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

[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.

[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]

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...

[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]

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]

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

[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

[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.

[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.

[Murphy Siding]

At this point, I don't feel like I've learned as much about this subject as I have learned about Montana Grain Freight Rates.[:)] It's always good to learn about new things. It appears to boil down to this: containers from China take reletively the same amount of time to leave the far east and land in a West Coast port. At that point, the railroads have to go like hell to compete foe the business with trucks. Does anyone agree?

[Anonymous]

Not really, the railroad can deliver 200 containers to point B somewhere in eastern USA saving the need to find 200 trucks, drivers, paperwork etc etc etc... Then following each box as it scattered across the nation on several different routes for a week.

I would pack it all on one train, find the day cabs to get the boxes off the train at point B.

That way the majority of the Trans US move is completed under one invoice and without risk of trouble, breakdown and accidents multiplied by number of loads involved.

[MP173]

Hey, just when I had forgotten about Montana Wheat rates....Murphy had to go and bring back memories of spending hours looking up grain rates and arguing my case with lawyers.

Murphy, I happened to drive to Dubuque Iowa today and there on the east side of the river was "Murphy" on the BNSF river line. That wasnt you was it?

[Murphy Siding]

Where I lived as a teenager in the mid-70's was about 1/2 mile from the Murphy Siding off the Milwaukee Road in western S.D.

[DSchmitt]

QUOTE: Originally posted by Murphy Siding

At this point, I don't feel like I've learned as much about this subject as I have learned about Montana Grain Freight Rates.[:)] It's always good to learn about new things. It appears to boil down to this: containers from China take reletively the same amount of time to leave the far east and land in a West Coast port. At that point, the railroads have to go like hell to compete foe the business with trucks. Does anyone agree?

No. Read Mark Hemphill's post on page 4[:)]

[gabe]

QUOTE: Originally posted by futuremodal

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.

Dan, yes, that was a misstatement on my part.

As far as other points, I was not aware that I made one? I noted that the issues there are interesting, but I certainly don't know whether the capacity reduction caused by different speeds are offset by the maximization of resources. That is way out of my league.

Gabe

[Anonymous]

You can bet that if someone could find a way to make planing continer ships that do 60 knots, there would be a market!

Ken Bowes
Toronto

[gabe]

Apparently your statement is correct, as hydrodynamic propulsion is capable of delivering such an eventuality and is being heavily invested in by the Japanese. However, the American shipping industry seems relatively unmoved by it.

Given loading and unloading times, I am really challenged to see how one week instead of a two-week transit would really provide that much of a benefit to customers and justify the expense. I think this is where the American industry is going with their construction. That having been said, the Japanese are not without logic, and I am sure they have researched their plans.

Gabe

[oltmannd]

Don't know if anyone else mentioned this, but "trip speed" for an intermodal shipment is driven by train speed. Arrivals and departures are timed for the particular market.

"Trip speed" for box cars is driven by the number of handlings - a typical dwell at a hump yard is 24 hours - that's 2 or 3 over the road crew's worth of time. Arrivals and departures are timed for network fluidity (well, sort of.)

-Don

[Anonymous]

QUOTE: Originally posted by gabe

QUOTE: Originally posted by futuremodal

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.

Dan, yes, that was a misstatement on my part.

As far as other points, I was not aware that I made one? I noted that the issues there are interesting, but I certainly don't know whether the capacity reduction caused by different speeds are offset by the maximization of resources. That is way out of my league.

Gabe

Gary, glad you caught that typo!