BNSF shuttle grain trains, Does this mean that BNSF does not want to serve small elevators?

[MichaelSol]

Well, it's not just a regional problem:

"The Texas elevator and feed mill surveys indicated that one-fifth of the respondents were without rail service because of rail line abandonments, while one-third of the rice driers were located on abandoned rail lines. Further, one-third of the country elevator operators observed that their truck shipments of grain had increased in the past five years by nearly 60 percent, while about 60 percent of elevator operators said that their rail shipments had decreased by about 38 percent. Thus, there is an increase in the use of trucks in the marketing of Texas grain.

"Texas grain handlers believe their motor carrier service is satisfactory. By contrast, most registered some dissatisfaction with rail service. The greatest concern centers on the grain handlers' diffiiculty in obtaining railroad service and on the promptness of railroads in providing service. About half of the country elevator operators indicated that inadequate rail service had at times required them to lower their grain bid to farmers by an average of $0.14 per bushel. Country elevators and feed mills indicated the most dissatisfaction with railroads, while terminal elevators were more nearly satisfied with the service offered by railroads." Texas Grain Transportation Study by Fuller, Yu, Collier, Jamieson and Harrison. Center for Transportation Research, University of Texas at Austin and Department of Agricultural Economics, Texas A&M, January, 2001.

Grain is one of BNSF's most profitable services. This isn't an area they need to cut costs, this is an area they need to haul as much as they can, however the customer wants it hauled. As a product group, ag's average carload revenue is the highest of all product groups, at about $1900. Sprague is a good example. BNSF charges a $1200 carload rate to Portland. Even though a short haul, the revenue is higher than the system wide average of all product groups, some of which are virtually all unit train. Fast cycle time, high revenue freight. The RR wants to aggravate the customers so that it can take a 12% cut in revenue, if the customer will load at a different location, and so the customer takes his grain elsewhere.

Lower revenues AND angry customers. How much more "efficiency" like this can a railroad handle?

Best regards, Michael Sol

[Anonymous]

Michael,

Your Lind reference reminds me of an observation I made a few months ago while exploring the back roads of Adams County WA. I followed an empty grain truck up State Highway 23 to Sprague WA, and when he turned into Sprague, I decided to see if he was going to stop at the Sprague elevators right there on the BNSF mainline. Sure enough, that truck plus three others had pulled into the rail side elevator waiting to load. My first inclination of their next destination was that they would simply short haul down the road to the BNSF shuttle train facility in Ritzville, since BNSF no longer provides service to the Sprague elevators despite a nice long siding there. So I waited around until the first truck was loaded and ready to go....

However, instead of heading down the road to Ritzville, this truck turned back down State Highway 23 heading toward Pullman. I followed him at a distance as far as St John, lost sight of him going out of St John, so I doubled back to St John and guessed that he had turned down the county road Endicott. Yep, I caught up with him going toward Endicott. He continued south passed Endicott, crossed over Highway 26, turned down Highway 127, and finally pulled into the riverside elevators at Central Ferry. I turned around to head back toward Sprague (since my intent was to watch the BNSF action at the Fishtrap recreation area), and on the way back I met the other three trucks that had been at the Sprague elevators, all heading the same direction as the first truck.

Okay, enough of the Grandpa Simpson story line.....

The conclusions from this trip is this: BNSF is losing traffic by their refusal to serve the the many mainline elevators. They probably assume that they will simply get that traffic at their Ritzville super terminal. Wrong. BNSF's decision to deny service to the line side elevators in deference to their unit train facility has cause at least some of that traffic to shift to the barge lines way down south. It is a little over 23 miles by I-90 from Sprague to Ritzville, while it is about 90 miles from Sprague to Central Ferry over a combination of State Highways and narrow county roads with alot of curvature and up and down running. My guess is that this traffic shift has more to do with service levels than with elevator price, because the party line around BNSF clones is that the unit train service from the Ritzville elevator can not only match the barge line rates, but beat them.

[MichaelSol]

QUOTE: Originally posted by greyhounds[That's like the combine and the trucks. The farmer has to "balance his/her line". He/she has to coordinate the trucks with the combine. If the farmer has to truck his grain farther to the elevator so be it. The farmer needs to hire more trucks. There is no reason that a 105K truck can't go into a field. It's a matter of ground pressure, and that can be solved by putting more axles under the truck.

"Ground pressure."

Field trucks used by grain harvesters represent different economics than over the road trucks.
1) Drivers are exempt from the requirement for commercial classification in most grain producing states. This permits the farmer or his kids to operate the trucks to the elevators.
2) In some states, the farm truck enjoys an agricultural fuel tax exemption that the OTR trucks do not. This is economically significant to the grain industry.
3) Truck must be licensed at its GVW rate. No ag exception. Pretty expensive.
4) Most country roads are not built to handle the loading, many country road bridges are not built to handle the loading, and if an OTR truck exceeded the weight limits, then there's a fine, besides potentially going through a bridge. I've seen that one. Quite a mess. The fact is, OTR trucks simply can't get to many locations.

On the Combine side:
1) the truck follows the Combine, the Combine doesn't come to the truck. OTR trucks are designed to be on highways, not fields.
2) Combines are not built to load OTR trucks. Either the Combine requires modification, or additional equipment, an auger, needs to be "available". "Available" meaning where the Combine needs it, not sitting somewhere else.
3) It would take the truck out of service for a day or more, just putting around the field following the Combine, to get the full load. An extremely poor use of truck time for an expensive OTR truck. Pretty expensive proposition to have a commercial license driver and expensive truck sitting around all day in a field. Not really what its designed to do.

At Lind, Washington a new transloader located on Highway 385 perhaps represents new thinking. It is a small, very small elevator. It is entirely up on stilts, and I wasn't sure what it was when I first saw it. Big steel bins on stilts. Pretty cheap to construct compared to a modern grain elevator. Very modern, very automated. Local trucks bring in the grain and load the elevator. OTR trucks come through, pull underneath, load by gravity and take the grain away. Not a railroad in sight.

I stopped and asked. The locals were apparently quite pleased with the results. "it gets us away from dependence on the railroad," meaning in that instance, the BNSF. "Service was never any good anyway, and this allows us to look for the best rate."

The interesting point to me was that 1) this was not some crummy little branchline somewhere, but an attitude by shippers on a mainline, and 2) the idea that the BNSF had now become the means of last resort, that these shippers would look to barges or UP, or direct trucking all the way, before looking to BNSF. Some hostility there.

I am sure the market will provide a solution to the reluctance of railroads to serve their customers. I'm not sure that the solution will benefit the railroads.

Gives a little different meaning to the twist, "not a railroad in sight."

Best regards, Michael Sol

[greyhounds]

Well, equipment cycle times are important to everyone. It costs money to own equipment and getting the most productive use out of that equipment is vital.

They teach this in MBA classes. If you've got a machine that can perform its process in 240 seconds, and the next machine on the line takes 360 seconds to do its process, what do you do? You can't have the operator of the first machine, and his/her machine, standing idle waiting for the next guy to finish. You've got to "balance the line". In an ideal situation you'd have three of the first machines feeding two of the second machines.

That's like the combine and the trucks. The farmer has to "balance his/her line". He/she has to coordinate the trucks with the combine. If the farmer has to truck his grain farther to the elevator so be it. The farmer needs to hire more trucks. There is no reason that a 105K truck can't go into a field. It's a matter of ground pressure, and that can be solved by putting more axles under the truck.

I have learned that a truck is one of the most flexible machines in the world. You can do just about anything with a truck. It can be a fighting platform for the Army. It can be a work platform for a power company. It can haul produce from California to New York City. It can put out a fire. And, most importanly, it can move to where it is needed easily.

Using trucks to move grain from a field is a once a year thing. Then the trucks, and their drivers, go elsewhere. A rail branch line isn't like that. It's there all the time. Costing money to own and operate.

It is situation specific, but generally the grain gathering operation, which comes from a field, not from a country elevator, will be handled best by truck. Now there's a trade off. At a specific distance, you put the grain in a covered hopper. And that function will be work out best by the market forces, not by lawyers and politicians.

[bobwilcox]

QUOTE: Originally posted by greyhounds

Yes, but.

The grain isn't originating at a country elevator. It's originating in a farm field.

I remember watching a Wisconsin farmer harvest his corn. It was dark and the John Deere combine just went back and forth, it's headlights showing the way through the corn field.

The hopper on the combine would get full, then he'd ( or she'd, I don't know which gender was driving) unload into a semi in the field. Semi's can go into farm fields where the freight originates. Trains can't. When the semi got full, it drove off.

Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.

You have hit the nail on the head. I base this on my experience working with real grain and fertilzer shippers at the Rock Island and C&NW from 1966 to 1982. We facilitated a lot of elevators that wanted to load 25, 50 and 75 car blocks of covered hoppers on branch lines that had a future. The elevators that stuck with single car shipments in 40' boxcars did not have a future.

[Anonymous]

QUOTE: Originally posted by greyhounds

Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.

Greyhounds,

Using this logic, we could take it one step further and say that it would make more sense just to drive the truck to the deep water port instead of transloading from truck to unit train elevator. As Michael pointed out, it's all about equipment utilization, and all other things being equal the optimal economic scenario would involve using (1)truck from farm to nearest elevator, (2)branchline hoppers from that elevator to unit train elevator (wherein the grain is either transloaed from lighter hoppers to 286k hoppers, or the 264k/286k hoppers are added to the nest unit train consist), and finally (3)264k/286k unit train hoppers from unit train elevator to deep water port (or sometimes to nearest barge port, wherein the next step (3a) is barging from river port to deep water port). For those places where the nearest grain elevator has no rail access due to either prior rail abandonment or never having had rail acess, then Step 2 involves transloading from farm truck to highway truck, a much more costly move than the branchline rail option. Sometimes it is possible to load highway trucks directly at the farm, and let the unit train elevator take care of the product quality refinements. Other times it is possible that another step (1a) will be added when grain is transloaded from farm truck to highway truck at the nearest elevator without rail access, wherein the highway truck only goes as far as an intermediate country elevator that has branchline rail access where the grain is then transloaded to the branchline hoppers. It all depends on distances and time constraints involved. Yes, there is always some product degradation when it is transloaded, but I've been told by co-op reps that the product quality losses and extra costs are insignificant compared to transportation costs.

[MichaelSol]

QUOTE: Originally posted by greyhounds
[Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.

No.

Equipment cycle times are as crucial to the farmer as to the railroad. The truck has to be back in time to transload from the Combine to the truck, or else the Combine operator just sits there waiting. On smaller farms, the Combine operator often IS the truck driver and he is not going to get his crop in if he spends his time in the truck driving cross country somewhere with a load of wheat.

Time is of the essence on a grain operation. The Combines operate as near to 24/7 as operator availabilty and fatigue will permit. The trucks are by and large used only during harvest, and there are neither excess trucks nor excess teenagers sitting around to drive them. And these are NOT 105k trucks that are out working between the elevator and the Combine. Those trucks don't load from Combines. They load at elevators.

This is hot and dusty work and to preserve the crop against rain, hail and insects, the crop has to get in as quickly as possible. Custom cutters make their money harvesting as quickly as possible in order to follow the crop ripening north.

Ideally, the trucks and Combine operate as a unit, one Combine, two trucks, two truck drivers. Small operators don't have the luxury so time is even more critical. A truck wants to be there by the time the bin is full on the Combine. The requirement for a truck at the Combine can be as short as 45 minutes. The farther the elevator, the more trucks and the more drivers needed to keep the Combine operating continuously.

The closer the elevator is to the farm, the better. There is no efficiency whatsoever in long distance driving of grain trucks off the farm to an elevator many miles distant just because it is larger.

Best regards, Michael Sol

[kenneo]

In a certain aspect, the BN in Montana is simply reacting to basic economics. As Greyhounds just stated, once the farmer has the product loaded in an OTR truck, you don't want to take it out and then reload it into a covered hopper unless the cost of that transload and two transportation charges will be less than keeping it in the truck all the may to the POE.

And Futuremodel is correct about the effeciencies of grain loading on branchlines. My last RR position was as a Station Agent and we had several single farmer and small grain consolidator elevators in my district. The export terminal was less than 100 miles distant (mostly between 60 and 85 miles) from the elevators, yet I could compete on single car-load rates with the EXEMPT (ie farmer owned and operated) trucker who could haul directly from the field 60-85 miles to the POE. The exempt trucker could eat my lunch and dinner getting from the field to the export elevator, but one there, he started charging "delay fees" for waiting to unload.

And then, about 1/2 the time, the truckers load was rejected because of "junk" in the grain that the branchline elevator filtered out. So the truckers had to locate a new sale for the grain. $$$$$$$$$$$$$$

Some things, while seeming to be non-cost effective, perform hidden functions that create greater economies further down the production chain. The farmer and the exporter were both better served by the small local elevator and the extra cost he inserted into the system was eliminated later in the production chain as illustrated above and the net result was a better operating system costing equal or less than any alternative. Consistancy and regularly fullfilled expections sell big time.

[greyhounds]

Yes, but.

The grain isn't originating at a country elevator. It's originating in a farm field.

I remember watching a Wisconsin farmer harvest his corn. It was dark and the John Deere combine just went back and forth, it's headlights showing the way through the corn field.

The hopper on the combine would get full, then he'd ( or she'd, I don't know which gender was driving) unload into a semi in the field. Semi's can go into farm fields where the freight originates. Trains can't. When the semi got full, it drove off.

Now once you've got the grain in a truck, does it make sense to take it to a small country elevator, then transfer it to that elevator, hold it there, then transfer it to smaller rail cars for shortline movement, then transfer it again to a larger elevator, hold it there, then transfer it to a main line shuttle train?

Or do you just drive the truck to the large elevator in the first place? It will depend on the specific situation, but if I had to bet ( and I do bet on things ), I'd bet that it will be generally more efficient to just drive the truck to the large elevator.

[Anonymous]

QUOTE: Originally posted by Chris30

One thing to add to the small grain elevators that are disappearing. A lot of small elevators are/were located on old, lightweight rail that is/was maintenance deffered branch trackage. As the weight of a loaded grain car continues to get heavier, the lightweight, maintenance deffered track can no longer support the weight of those cars. To continue serving these small elevators the railroads would have to continue using smaller/lighter cars, or the branch trackage would have to be completely rebuilt at a great cost that would never be repaid to support the newer, heavier grain cars. Don't foreget about the cost of crew and equipment to serve the lightweight branches that might only produce a few cars a week for one season of the year. It just makes more sense for the small elevators take the discount offered and truck their product to a large elevator on the main line. The railroads are more than willing to give a discount to the small elevator vs. the expense of the branch lines.

CC

This all goes back to argument of whether it is more effective to deliver grain from country elevator to unit train terminal via a 105k truck (129k in some states) over country roads, or whether it might be better to make that same short haul using old 264k (or even older 220k) hoppers over a still intact branch line. There are some shortline guys who even claim they can haul 286k cars over lightweight trackage if they just keep it under 10 mph. So it comes down to the idea that branchlines can continue to remain functional (and thus profitable) if the branchline owner can (1) carry grain from the elevators on his line to the unit train facility in the lighter weight 220k and 264k hoppers (which probably requires access to mainline rails to get to the unit train facility), or (2) fill up 286k hoppers with branchline grain and then go real slow over the branchline rails until the shortline can reach mainlline rails wherein they can speed it up to get to the unit train facility, wherein the 286k cars are added to the unit train consist. The former could be a problem if the older cars are no longer FRA compliant off the home rails, and the whole enterprise is dependent on the shortline operator being able to gain access to the unit train facility, often over mainline rails. When the Class I's owned and operated the the branchlines, this was no problem, but if they've spun off the branchline they are probably less accomodating of the branchline consists occupying the mainline rails.

The bottom line is that it is still more efficient to move grain via 220k hoppers than it is to move grain in 105k truck trailers, and unless the rail move is no more than a few hoppers per year, it should still pay to move this product via rail rather than truck. For the most part the branchline is already paid for, only maintenance required to keep it minimally functional. With diesel fuel prices looking like they'll stay high for the time being, and the truck driver shortage means current drivers will begin to earn higher wages to stop loss for trucking firms, the idea of running lightweight freight trains over the lightweight rails could make a comeback. But it will still depend on the access issue to make it work.

[broncoman]

QUOTE: Originally posted by ericsp

The grain trains I see are probably about 75 to 100 cars. All of the grain elevators around here are receivers. Do they load any grains besides rice up there?

Eric rice is a big export, but I am not sure what the other grain is that is shipped. I know I have seen a lot of cars at the elevators up highway 99 above Yuba City. The cars were being loaded outside of rice season, but I didn't know with what.
Anyone else care to venture a guess.

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