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Why do railroads run intermodal so fast?

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Posted by Anonymous on Friday, June 17, 2005 10:10 PM
Try it this way:

The new containerships carry 4,000 FEU's. The typical double stack carries 250 FEU's. That's 16 trainsets per ship. Now calculate how many ships call at your port of choice. Say it's 500 per year on average. To serve those 500 ships at 4,000 FEU's per ship takes 8000 trainsets per year. So now you ask yourself how many trainsets do I want to buy to meet that 8000 trainset demand. If my trainsets can make the turn-around in 10 days or so, I can make do with about 36 trips per trainset per year. That's a little over 9,000 containers per trainset per year, so I would need to invest in about 218 trainsets. If however my turn-around time is 15 days per trainset, I get only 24 trips per trainset per year or a little over 6,000 containers per trainset per year, so then I would need to invest in about 333 trainsets, e.g. my equipment costs just went up 50% because my double stacks move 20 mph slower than they are able.

You still want to know why intermodal moves at the fastest allowable freight speed?

Time is money.
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Posted by BaltACD on Friday, June 17, 2005 4:49 PM
QUOTE: Originally posted by Murphy Siding

Then, using that line of thought, why do steamship companies run intermodal so fast? [:D]


Competition....on the major trade routes there are more than one carrier....If carrier A offers 7 day transit and carrier B offers 10 day transit who is going to get the business????

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Posted by gabe on Friday, June 17, 2005 3:56 PM
I still think you would get a funny look from any rational exec if you told him or her "if you pay x MORE dollars, I will be able to get you your product in 30 days and 4 hours instead of 30 days and 11 hours.

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Posted by Anonymous on Friday, June 17, 2005 2:51 PM
Whew... let's take in some slack here...

I see mega widget INC in middle USA somewhere taking in parts from China. They will call thier agent in some trade tower somewhere. That agent decides how the shipment will get from China to the customer.

I think it costs x number of dollars to place the containers on a shipping line. And another x number of dollars for either trucking or train (Or both if inland container ports are used) The cheapest method gets the call.

Regarding ship speeds, I study military history as a rank ametuar who knows nothing about that subject. Our Merchant Marine did pretty well at 15 knots during world war two. But 24 knots is more beneficial in cutting transit times.

To get 30 knots on a warship is a special problem requiring massive engineering on a huge scale. Lucky for us we can drive carriers at speeds that are perhaps over 40 knots. No one will clarify the top speed as it is useful to the enemy in deciding how long before we confront him with a carrier battle group that is capable of displacing 1000 miles or more each 24 hours.

Cargo ships have a different impact on the ocean and different problems than a warship and it will take a bit of power to get them to "Get up and run" I believe there were ships built that are capable of very high speeds but commerically did not really take effect.

Take the cruise lines. We are building and deploying cruise ships larger than the Nimitz Class Carriers and capable of transporting thousands of people in luxury that would make Cunard or White Star of the Titanic days envious. Not to mention the sheer profit in having so much paying cargo on board.

These cruise ships have the technology so that ONE man on the bridge can park it within 1 meter of the dock in the tightest of places such as Miami without assistance of tugs. He would use a variety of GPS sensors and a single joystick to do the task.

But I am getting away from the cargo here. I think it benefits shipping to carry a massive load of cargo any distance. I dont think 15 knots or 24 knots really matter much.

If we had 50 knot cargo ships, the goods will cost more and people will be more stressed getting the greater volume of goods thru the ports which appear to be pretty busy already.

The topic of this thread is why are customers SO demanding of getting thier goods delievered ASAP!! as in within hours of a ship's arrival.. Never mind the fact that box sat on the ship for 30 days as it floated across the ocean.

The answer I think lies within us as a people.

Example.. You order a Model Locomotive of your dreams. You are told it will take a few weeks.

Each day you wait on that order you wonder if they shipped it yet but not really concerned.

The day you are notified that the order has shipped and on it's way to you... you WILL find yourself camping at the end of your mailbox waiting for UPS, Fed Ex or whatever to get the package to you ASAP! You might sneak home from work early to see if it hit your porch yet.

I think this also infects customers who expect thier freight yesterday.

I had one onion load from Seattle to the Boston Market. It took me 4 days as a single driver to make it in the dead of winter with ice and big snow in the north.

The owner of the onions shouted in my ear... YOU ARE TOO (Insert degradatory word) SLOW!! I could have (Insert different option) gotten them onions here faster.

I suspect you can load 44,000 pounds of onions on AIR CARGO and landed the darn thing 8 hours later on his market stall and he will STILL yell about how slow you were.
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Posted by spbed on Friday, June 17, 2005 12:53 PM
Also, it is the steamship line who controls the routing to say Chic or NY or Savannah as they are ones that choose the RR & routing they will use & will put in the contract with the RRs how many days they have to get the container from say LAX to CHIC. To attract the consignee they advertise to the consignee say from Tokyo to Chicago will take 13 days or Hong Kong/NYC 18 days just to give you a example. If the SS line does not perform upto what they advertise they become in jeopardy to lose there customer. Again I suggest you contact any of the major pacific carriers & analyze how they attract consignees & perform the transit time to destination they promised to the consignee[:p]

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Posted by spbed on Friday, June 17, 2005 12:39 PM
In my time NO[:o)][:p]

Originally posted by Murphy Siding

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Posted by Murphy Siding on Friday, June 17, 2005 12:37 PM
Then, using that line of thought, why do steamship companies run intermodal so fast? [:D]

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Posted by StillGrande on Friday, June 17, 2005 12:34 PM
Regarding ships, aren't the SS companies always looking for bigger and FASTER. I remember a show on PBS where there was a group looking to build a RO/RO ship which would cut days off the transit times using a different engine arrangement (engine pods) which would also speed up docking and departure (fewer or no tugboat intervention). Industry has greatly reduced the need for warehouses using Just in Time delivery of parts (the auto industry comes to mind). A few hours difference can now mean the difference between staying in production and shutting down for the day.
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Posted by gabe on Friday, June 17, 2005 12:26 PM
QUOTE: Originally posted by Murphy Siding

By the same reasoning, are the shipping companies pressured to run their ships faster? For example, do they offer "premium" service, for a ship that travels 17 knots vs. 15 knots?


I am very much a novice when it comes to the shipping industry, but I would really have to think not. Here are my reasons:

(1) Due to the geometric preasures created by a prop. driven steamship, the amount of fuel and wear on an engine increases geometrically rather than arethetically. In other words, it takes more than twice the horse power to travel at 30 knots instead of 15. If you look at the power plants in battlecruisers or fast battleships, you will notice that the shp of a fast battleship is noticeably higher than that of the same size ship that only goes 11 knots slower. For instance the Iowa class battleship has an incredible 212,000 shp, where as the Arkansas class--though some 15,000 tons lighter has an shp in the upper 50,000s. The Iowans do about 33 knots, the Arkansas do about 20 (on a good day).

(2) The clear trend in shipping seems to be the economy of scale rather than speed.

But, that is just a novice shooting from the hip.

Good quesiton.

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Posted by Murphy Siding on Friday, June 17, 2005 12:16 PM
By the same reasoning, are the shipping companies pressured to run their ships faster? For example, do they offer "premium" service, for a ship that travels 17 knots vs. 15 knots?

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Posted by Anonymous on Friday, June 17, 2005 11:42 AM
QUOTE: Originally posted by adrianspeeder

No, I think the train would need to move as fast as possible to keep up with the massive amounts of containers coming from ships.

Adrianspeeder


If you look at a shipping port's news paper, such as Baltimore. You may find a section where there is arrivals and departures of ships that day, previous day and the day after.

ALOT of boxes off the ships go by truck direct to the customer. I have stood in the middle of the port at Baltimore when Evergreen is unloading and see a few hundred boxes disappear into the port. Later that day hundreds of truckers leave with those boxes.

Trains are used to carry boxes from the east coast to the west coast to save shipping the lost time traveling all around the southern USA, pananma canal etc...

I see about 8-12 Double stack trains running north to St. Louis from Little Rock a day. I would think that is one ship's worth of boxes right there.

Dont worry, there are MANY trains. And few ships. And millions of truckers.
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Posted by spbed on Friday, June 17, 2005 9:17 AM
In my day from last port in the FE to LAX was 8/9 days. You can look at any FE carrier or try the Journal of Commerce to obtain there schedules to better learn of how the stemship/RRs work.

Originally posted by gabe

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Posted by gabe on Friday, June 17, 2005 9:01 AM
MP173 and Greyhounds,

Thanks for even further developing the topic. I think I am getting to know enough about intermodal opperations to almost call myself an amature.

Greyhounds,

That was really interesting about the IC line. Do you know if the service was always run over the Alton? The IC's old St. Louis service, took the IC New Orleans main to Gilman, Il, to Springfield, and then South on a more Easterly tact than the Alton. This line went through my hometown of Mt. Olive. I have always wondered about the freight operations on this line--I have been told a lot of the IC freight went to Duqoin and then took the IC's Southern extension into St. Louis. I never quite understood why they would do this.

One of my earlliest memories as a 6 year old is watching the IC tear the line out from Farmersville to Glen Carbon. It was nice seeing the traffic come through town, as they stopped running freight over the line for a few years prior, but when they started attaching chains to the engines and using them to pull out the rails, I was less amused I am surprised my young psyche ever survived. Ever since then, the IC has held a certain mystique to me.

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Posted by adrianspeeder on Friday, June 17, 2005 9:00 AM
No, I think the train would need to move as fast as possible to keep up with the massive amounts of containers coming from ships.

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Posted by gabe on Friday, June 17, 2005 8:54 AM
QUOTE: Originally posted by adrianspeeder

I would say that the ship can carry so much more containers vs. a train.
I bet that the tonnage moved x speed for a ship is much higher than a train.

Adrianspeeder


Right, I am not arguing that. My only point was a five-to-seven hour time savings when the container took nearly a month just to get on the train doesn't really seem like anything anyone would really care about.

As I said earlier, it would be like spending a dollar less for a 16 oz beer instead of a 24 oz beer after spending $300 on football tickets.

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Posted by adrianspeeder on Friday, June 17, 2005 8:04 AM
I would say that the ship can carry so much more containers vs. a train.
I bet that the tonnage moved x speed for a ship is much higher than a train.

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Posted by MP173 on Friday, June 17, 2005 7:19 AM
Gabe:

What is our next topic? Not to suggest that this one is done yet, but your ability as a forum moderator is outstanding.

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Posted by greyhounds on Friday, June 17, 2005 12:27 AM
QUOTE: Originally posted by gabe


Why don't they do this with all trains then? Box cars, lumber carriers, and auto carriers would seem to cost more than a container. Also, with higer speed trains, wouldn't that require more engines, which would also cut into the efficiency created by turn around time?

P.S. Greyhounds once talked about Chicago - St. Louis intermodal opperations. In so doing, you implied there was more than one train a day in each direction. Was this the case? I am just curious as an IC fan.


Yes, we had three intermodal trains each way per day between Chicago and St. Louis. Nbrs. 44, 46 & 48 north and 45, 47 & 49 south. Basically, there was a therory that freight was becomming available during the day and that one train departure per day would not be service competitive with HighIron who would have the freight delivered in St. Louis by the time we loaded it on the flatcar in Chicago.

As MP173 has pointed out, this theory was crap. Most shippers wanted to load into the afternoon and have their freight delivered the next morning. We wound up setting different price levels for the trains to try to "force" freight onto the less desireable departure times. We also "bunched" train departures to give overnight service on as many of the loads as we could.

The trains came about from a unique labor situation on the old Alton Route. Engineers on the Alton were for some reason represented by the UTU instead of the BLE. This bypassed a major block to reduced crews. The IC had tried to save its Iowa Division by proposing that: 1) more trains be run, giving better service, but; 2) there would be fewer crewmembers on each train. This would have increased overall employment and moved people into better jobs. For example, there would be more engineers, but fewer brakemen. (we still had to use brakemen on through intermodal trains then)

Since the increased employment benifits didn't go the UTU's way but did go the BLE's way, the plan went nowhere. This was not a problem on the old Alton.

A deal was hacked out to run six trains a day using two person crews (all in the UTU) with (shudder!) no caboose. Revolutionary at the time. By union agreement, the trains were limited to 15 flatcars, which caused all kinds of problems. They could handle 30 trailers. So what happened when 31 trailers needed to go? I'd get a call the next morning from a very angry shipper who's load was still sitting. (They made stuffed animals for amusement parks and carnivals in St. Louis. We had a regular move from the manufacturer to Great America north of Chicago. One day they tried to ship a load to a carnival that was playing in Sioux City. We had a heavy mail day and were required by law to give preference to the mail. The "stuffies" sat. And I got the phone call.)

The operating department hated the trains. Eventually, they were able to kill them. There were two such "experiments" in the midwest. The Milwaukee operated similar "Sprint" trains (six a day) between Chicago and the Twin Cities.

All in all our "Slingshot" service was a decent idea but not flexible enough. The "Slingshot" brand name was the idea of George Stern, then head of intermodal at the railroad. He wanted a name that meant something simple but effective. He had a huge real slingshot on his office wall. He left, then his successor left, and when I left I took that slingshot. I knew where it was until I got divorced and had to vacate quickly. I know I brought it with me. I'll try and find it.

As to your question about carload...Intermodal is a different animal. Intermodal trains run terminal to terminal. Carload moves siding to siding. You can significanly increase intermodal flatcar utilization by running between terminals faster. Because of the intricate and hopelessly inefficient needs to constantly switch carloads, terminal to terminal doesn't make much difference time wise. The equipment is going to sit motionless in yard after yard no matter how fast the road train runs.
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Posted by Anonymous on Thursday, June 16, 2005 11:46 PM
QUOTE: Originally posted by Junctionfan

QUOTE: Originally posted by gabe

QUOTE: Originally posted by Junctionfan

Probably because it takes so darn long to get everything ready at the port, sooner the better for an inbound to get there so they can get all the cards on the table.

If the ports could get more docks and workers to sort out the containers, speedy container trains would make more sense.


Even if they could get the container from the vessel to the train instantaneously, I don't think my premise would change. The ocean liner does, at best 15 knots, over an incredible vast distance and sometimes have to wait outside the port for a bearth for a very long time. 5-7 hours compared to this time is NOTHING.

Gabe


Don't the container ships run on schedules?


They sure as hell do. You see near-panic as dispatchers flood the port with out-bound boxes. That boat is a-fixing to leave and that box has to be on it.
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Posted by Anonymous on Thursday, June 16, 2005 11:14 PM
It was said above, but bears repeating, the spoils goes to he who provides the best "value" given all of the alternatives. (Value as defined by Cost x Speed x Reliability).

It was mentioned above that steamships only move at 15 knots or so. So what's the alternative? Air? Look at the value equation above and the cost blows it out of the water. As a result of no alternative, steamship wins for that leg of the trip.

However, once you hit dry land, there are more alternatives (truck or intermodal.) Again, back to value. If I'm the shipping manager, do I want to pay a little more for a truck to get the faster transit and higher reliability? Depends on the product (inventory cost and consequence of the shipment being late.) If inventory cost is low and consequence is low, go intermodal... or if consequence is mitigated by highly reliable train (i.e. UPS on BNSF) then again, go intermodal.

Finally and I don't think I've seen this above - even the so-called "Mighty BNSF" only averages 33 MPH on their intermodal trains from departure to ground (See www.aar.org.)
http://www.railroadpm.org/Home/RPM/Performance%20Reports/BNSF.aspx
Lots of terminal time, loading, unloading, cross-towns for interline traffic, etc. that wastes time enroute. That's why you gotta run the wheels off on the mainline - to make up for this handling junk.
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Posted by Junctionfan on Thursday, June 16, 2005 11:08 PM
QUOTE: Originally posted by gabe

QUOTE: Originally posted by Junctionfan

Probably because it takes so darn long to get everything ready at the port, sooner the better for an inbound to get there so they can get all the cards on the table.

If the ports could get more docks and workers to sort out the containers, speedy container trains would make more sense.


Even if they could get the container from the vessel to the train instantaneously, I don't think my premise would change. The ocean liner does, at best 15 knots, over an incredible vast distance and sometimes have to wait outside the port for a bearth for a very long time. 5-7 hours compared to this time is NOTHING.

Gabe


Don't the container ships run on schedules?
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Posted by Anonymous on Thursday, June 16, 2005 9:18 PM
Gabe,

Congrats on another excellent topic.

Greyhounds pretty much nails it, but your focus should be on equipment inventory costs as well. For cross country traffic, the difference between 40 mph and 60 mph is at least one day. If it takes 10 days round trip at the faster max speed vs 12 days round trip at the slower max speed, then the faster speed results in 5 extra revenue trips per year. Those 5 extra trips can mean you pay off your equipment rents a lot sooner, so you're more likely to achieve profitability sooner.

Unfortunately, for many other commodities, this idea of "warehousing in transit" has infected the supply chain, and it has introduced a sort of backhanded inefficiency. Yes, warehousing is an expense that one tries to minimize as much as possible, but if warehousing must take place, it is better if it takes place in an actual warehouse than in transit. One giant 400,000 square foot building is more efficient for warehousing than 100 4,000 square foot boxcars or 160 ISO containers. One wonders if this warehousing in transit concept has induced slower transit speeds. Remember the posts regarding the car of lumber that gets shuttled around the country here and there as the forwarders play pattycakes with their customers? Who's paying the costs of this more expensive form of warehousing? Ultimately, it is all of us, as such represents a loss of productivity.

You also should not discount speds analysis. If you've already paid for an item, do you want it sooner or later? A bird in the hand is worth two in the bush, or so the saying goes.

It has been noted in other posts (by yours truly) that trucks of all types travel at the same speed on the nation's highways (outside of mountain grades), irregardless of the commodity being transported. A truckload of gravel travels the same 60, 65, or 70 mph speed limit as the truckload of perishables. Why are the railroads so invested in this idea that only the varnish goes the highest allowable speed, while the mixed freight or the unit train of aggregates must clog up the mainline at half that speed?

Fuel efficiency is not the answer. The savings on fuel costs by travelling slower are outweighed by the combination of the equipment's revenue utilization and the axiom of doing your best to placate the customer (by getting his goods to him in the most expedient manner). Or to put it another way, you cannot conserve your way to an increased customer base.
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Posted by Anonymous on Thursday, June 16, 2005 7:10 PM
my un-educated opinion would be along the lines of what highiron said. not much is stored and/or warehoused these days. it's all distribution centers ship it in, sort it and ship it out. everything is so fast paced because the inventory isn't there anymore. go to your local car dealership and try to get anything other than an oil filter..."uhh, yea we'll have that UPS'ed to you in 2 days"

it's all just fast paced nowadays. the boat goes as fast as it can, the unloading/loading goes as fast as it can so why not run the train to what its capable of?
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Posted by Anonymous on Thursday, June 16, 2005 6:45 PM
Actually JIT means getting rid of warehouses and associated costs.

I dont ship ground if I can avoid it. Most of my orders for personal use comes off the west coast by 2nd day air.
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Posted by MP173 on Thursday, June 16, 2005 5:19 PM
One other thing...why are shpments picked up in the pm?

Because it gives the shipper all day to process orders and still ship the same day.

Many distribution centers are located near Memphis to hit FEDEX outbound departures. Thus, a company can take an order for computer parts at 7:30 CST and still deliver to the air terminal and hit the outbound FED EX jet at 1am.

JIT (just in time) levels of inventory have created an entirely new method of how costs are treated.

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Posted by MP173 on Thursday, June 16, 2005 5:14 PM
This has been covered extremely well. Greyhound is a very knowledgeable resource on this matter. I will offer just a bit more insight to this that I believe has been overlooked.

As previously stated, there are various levels of service. The best example of this is on the BNSF Transcon line. Trains did an article several years ago which very accurately described the system put in place by ATSF in the early 90's in which customers could order the level of service required and pay the corresponding price....slow service, low price, premium service, high price.

Thus, you will have certain trains moving at rates of speed to meet that premium pricing. Lower rated freight will move slower, often this may be in terminal dwell times. My guess is that on the rails, trains tend to move at track speed if possible.

Now, for the other part to the equation. Schedules are developed based on customer's needs, or at least in theory. Premium service trains are built based on afternoon loading of freight at the origin and morning delivery at destination. This is critical to understand for at least three segments....UPS, LTL and Truckload.

The entire shipping community is based, particulary in package (UPS) and LTL on afternoon PU's and morning deliveries. Thus, schedules are built based on an evening departure from origin so the trucks can make it to the terminal. Think of what happens at UPS. Brown makes the pickup at 5pm, back to the terminal at 6:30, unload truck, stuff a trailer destined for LA, CA and then run the trailer to the intermodal yard by _________pm in order to hit the cutoff time.

Train runs to LA, CA and MUST be there in time for Brown to pickup at the rail terminal, take to break bulk, unload, and load on delivery truck, which is out the door by 9am, if not sooner.

Ditto LTL (Roadway, Yellow, ABF, USF).

Sorta ditto for TL, although not as severe as schedule due to nature of the freight.

Thus, evening cutoffs are critical and morning deliveries are critical. Based on the mileage involved, that leaves X hours to get the train from Chicago to LA.

Thus, some intermodals run hard, very hard, because Brown says so. Why does Brown say so? Because FEDEX is mostly running by truck and these schedules must be competitive for market share.

Gabe, if you notice on my NS Chicago line thread, the Intermodals are schedule inbound to Chicago in the AM and outbound at night...for the most part, exception being 217 to Greensboro.

BTW....yesterday's 217 had 5 FedEx 28' pups in tow, the first I have ever seen.

Hope this helps.

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Posted by BaltACD on Thursday, June 16, 2005 5:03 PM
Three simple letters drive Intermodal Train speed in the US.

UPS

That says it all in the rail industry.

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Posted by gabe on Thursday, June 16, 2005 3:56 PM
OK, they secure it at the earliest possible moment. So how does that take away from the fact that you are looking at betwen 20-30 days from the time the product leaves the factory to the time it is loaded on a train and 5-10 hours doesn't really seem like that big of a deal when you consider that it takes 20-to-30 days?

However, I do think Greyhounds et al does a pretty good job of explaining the rationale to me.

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Posted by spbed on Thursday, June 16, 2005 2:59 PM
I think you forgot about the demands of the customer of the steamship line to secure there cargo at the earliest possible moment. [:o)][:)]

Originally posted by gabe
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Posted by gabe on Thursday, June 16, 2005 2:48 PM
QUOTE: Originally posted by Colin

Didn't the pre Conrail Split CSX tried to save fuel through that "Pace 40" program to all to trains ran at a max at 40 MPH. I heard it was big disaster. And Intermodals went back up to a 60 MPH max.

I think they found the biggest cause of delays and biggest place for cost savings was in the yards not on the road.

I believe and correct me if I am wrong that the UP runs loaded coal trains at 60 MPH on its Central Corridor to keep the line fliud with all that Intermodal traffic and expedited merchandise traffic such as that "Express Lane" service they run with CSX .

For only we had a sane transportation policy in this country and the RR would recieve gov't infastructure funds to reinstall multitrack mainlines on all routes that see at least 20 GMTs a year and maintain them to at least FRA Class 4 standards. Maybe then we will see alot more 70 MPH freights and just on certain BNSF and UP routes.


I don't know about CSX/Conrail, and you are correct about UP's coal trains.

However, those are just speeds at certain choke points to increase capacity.

As for the remainder of your contention, I Greyhounds is the best person to field this one.

Gabe

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