OAT : Open Access Thread

[Anonymous]

QUOTE: Originally posted by greyhounds

QUOTE: From THE FUTURE -- greyhounds - You're slipping into Ed territory. That being said, you said something that begs for objectivity. We all know about aggregation, glad to see that you do as well, so we can skip that primer.

You stated, "How much they aggregate depends on a trade off between customer service, capital costs, and operating expense."

What we've been discussing is that very trade off to which you refer. The railroad wants to aggregate to the max, because the bean counters say that's the best way. The merchandise customer wants his shipment at a decent price AND in an expedient manner, else he gets fed up and takes his shipping to the mode of last resort, trucking. Trucking is generally more expensive than carload, so the shipper is taking a hit if that expediency is not manifested by the railroad.

Where do you get the time to make this stuff up. I haven't "slipped" into anybody's territory since I was in the Army, and then it was only in training.

You start from false premises - then construct a fantasy. You say: " The railroad wants to aggregate to the max, because the bean counters say that's the best way." This is absolute lunacy. Railroad costing accountants aren't stupid. They can understand trade offs between train operating costs and capital costs. Aparently, you can't.

You seem to think there's some "Magic" that will lower train operting costs with open access. There is no such thing as "Magic". It's going to cost an OA operatior just as much to run a train as anyone else. This means, to anyone with a basic understanding of cost accounting, that they'll need just as many revenue loads on a train to optimize its operation as anyone else. So the OA Operators will have to run trains just as long as the, oh say, just for example, the BNSF. But It will take the OA operators longer to put those trains together, driving up their capital costs and their overall costs. Not because it will take them longer to switch the cars, but because they'll have to wait longer for the cars to arrive.

But you don't understand any of this because you belive in Magic.

And I think your invention is really stupid.

Ken

Thanks, Ken. You said it all in a nutshell, literally. OA opponents ALWAYS slip into insults and personal attacks, because apparently they always run out of substanitive arguments.

You say "false premise" regarding the roll of bean counters in influencing railroad decision making, yet you acknowledge that these same people are basically concerned with "costs", so apparently even you accept the premise. Just for the record, bean counters are not marketers, and it is the marketers that determine the extent of that all important factor known as "gross revenues". Somewhere along the line the investments needed for increasing gross revenues gets recategorized as "costs", wherein the reccomendation gets handed down from Accounting that these "costs" need to be reduced to improve the bottom line. Consequently, the railroad reduces it's investments in the aggregate customer base, and that aggregate customer base gets whittled down to a select few. In the meantime, truckers increase their total market share of transportation revenues to 80+%, and railroaders are scratching their collective heads wondering how that could ever happen, even as the blood still drips from the cleaver in their hands.

Do you consider the fact that many shortlines and regionals regularly run consists of 20 to 30 cars and make a good profit doing so, or is that another one of my "false premises"? If as you aver railroads can't possibly cover their costs running consists of 20 to 30 cars at a time, then why do some railroads accompli***hat very thing which you deny? Do you even consider how the shipper responds to this level of service as opposed to the one carload per month level of "service"?

Perhaps it is you who live in a fantasy world constructed of denial.

BTW, it isn't OA operators who would run trains, it is the transporters. And they won't be lowering their operating costs so much as expanding their customer base by increasing revenue loads per time period to, oh say, just for example, MORE THAN ONE CARLOAD PER MONTH.

[jeaton]

Bean counters make the business decisions.

Shortlines running 20 to 30 car trains make a good profits.

Freight cars move one load per month.

Incredible.

[MichaelSol]

It is a guess on my part based on visual sampling of BNSF and MRL trains over the route, but one of the most profitable short lines, MRL, system train average is just about 30 carloads. No idea on shortlines in general. Interestingly, at a point when I was aware of its profitability, a number of years ago, it was more profitable, as a percentage of revenue, than any of the Class I's. However, the profit numbers were a number of years ago, and the train size observations were more recently.

Not sure I follow the "single carload" thought, but, regarding car cycle times, I only follow grain, but as of the week of 07/09-07/15, car cycle time was 29.50 days, each carload was taking nearly a month to cycle.. As of last week, it was 26.39 days. For what its worth, average grain train speed is down to 20.5 mph from an average of 23.7 mph a year ago. That's huge. Grain trains, however, are only marginally slower than the average train speed of all BNSF trains which is now down to 22.5 mph.

These are BNSF figures.

Best regards, Michael Sol

[bobwilcox]

Dave said, "Just for the record, bean counters are not marketers, and it is the marketers that determine the extent of that all important factor known as "gross revenues..." It does not work this way. A Market Manager that just looks at costs will not last long with a Class I. Contribution is the key statistic and that involves revenues and costs.

[MichaelSol]

QUOTE: Originally posted by bobwilcox

Dave said, "Just for the record, bean counters are not marketers, and it is the marketers that determine the extent of that all important factor known as "gross revenues..." It does not work this way. A Market Manager that just looks at costs will not last long with a Class I. Contribution is the key statistic and that involves revenues and costs.

Well, Dave did say "gross revenues," not marginal costs, and that is where the contribution comes from..

Best regards, Michael Sol

[Anonymous]

Putting aside the issues associated with getting started, I'm still not convinced most of the benefits stated for OA would actually occur. I feel like this is either a way to get lower rates for a select group of shippers or a back-door way to get federal funding for freight ralroads. Those shippers may get better more competitive rates and infrastructure investment may improve, but I see higher rates for everyone else and ultimately higher prices for consumers who always end up paying the bill. And there's no way I see the railroads to blame for imports from China, rather the number of containers entering the country is driving demand for transportation. The question is who gets that business.

On the infrastructure side, I'd be concerend that it would turn out more like the national power grid than the airlines or highways. Both are invisible to the public until a crisis occurs. In the case of the power grid, California rate payers were gouged for millions of dollars and the state treasury nearly went bankrupt buying power, while the FERC was asleep at the switch. Few people responsible are in jail, but despite that and a lot of hearings, Congress did little to solve the problems because of regional interests. The result was the Northeast meltdown and even that did little to move things along. What finally ended up in the energy bill is far too little and not nearly enough funding. I see many of the same regional issues with OA. Suppose Montana farmers get favorable rail rates, their transportation costs still won't be competitive with Midwestern farmers who have easy access to water transportation.

[jeaton]

Michael

Interesting, but then I wouldn't know about the financials of The Washington Group of Companies, would I.

Jay Eaton

[MichaelSol]

QUOTE: Originally posted by jeaton

Michael

Interesting, but then I wouldn't know about the financials of The Washington Group of Companies, would I.

Jay Eaton

No, Jay, and I wouldn't expect that, but it's out there, and it is is an interesting operation. I hope it doesn't appear offensive simply to point it out.

That underscores a problem with the short lines in general, and drawing broad conclusions about them. Their statistics aren't as readily available as the Class I's, in many cases because they are privately owned, or subsumed in some other organization.

MRL is unique for a variety of financial reasons in terms of its profitability, but its operations do appear to favor the shorter trains. What brought it to my attention was simply noticing one morning driving the Interstate along a couple hundred miles of MRL was that the BNSF trains on the route were remarkably short, and have noticed it relatively consistently since then. These of course are the through trains.There's a long coal train that comes through that I am sure drives the average up, but there seems to be a marked preference for short, fast trains. Now that I am thinking about it, maybe I will ask one of their guys today. Ex-MILW, you know. And I do know that these individuals, when they were back in the MILW Planning Dept., had argued in favor of the shorter, faster trains which their modeling then had shown, overall, to be more cost-effective in some ways, but permitted higher revenue through enhanced utilization and the ability to offer premium services that more than offset increased labor costs.

And I think this gets to the nub of the four short trains vs one long train argument. Compared to the revenue received, the labor costs associated with a train -- my favorite, wheat, for instance -- is not significant. Compared to the revenue received. Where the railroad makes its money, then, is how fast it can turn those cars around and get revenue back into them. The marginal return on higher utilization far exceeds the increase in labor costs.

The discussion highlights the problem of a railroader, or any other businessman for that matter, who thinks in terms of cost being the only driver. But, that's the problem with the discussion. The guy who assembles trains sees "efficiency" as a purely mechanical function. He thinks he's savng money by assembling one train instead of four. If that's all there was to it, he would be right.

It's not.

He never sees the revenue side of the railroad. The margin on each carload isn't his department, and the overall number of carloads per unit time compared to the cost of labor is not part of his world. It's a situation where a little information can be dangerous. He's got it all figured out within the confines of only understanding the costs that he sees out the window. But, as Bob Wilcox is fond of pointing out, revenue, not cost, is the important driver.

Best regards, Michael Sol

[jeaton]

Michael

There is something to say about the option of running the train on something close to a schedule, or at least the general plan as opposed to holding for tonnage. The sharp pencils will get it right and good management will get it implemented. Of course the latter part is tougher, because, as I am sure you know, often times what senior management orders is not necessarily served up. It is pretty hard to get a division superintendent to walk the walk on service and equipment utilization when his annual performance is based on train miles and crew costs. At least that was then. I haven't seen it spelled out, but I suspect that in current times, performance measures may be more toward compliance with the big plan, rather than how much did you "save" by building bigger trains.

I know you would have seen the numbers on the MILW's short fast Chicago-Minneapolis operations. I would submit that however numbers came out, at the time the trains were running, the double track line had quite a bit of unused capacity. The other day I had a ride accross the Chicago Line from Cleveland to Chicago and our weaving through traffic made me think of a race driver in the process of laping the field. I would have to see a quality simulation before I would be convinced that splitting up the trains there to smaller sizes would produce greater efficiency.

Grain car utilization does seem to be pretty poor. The numbers you quote are about twice as long as the averages for the entire fleet. I wonder if the Rent a Train concept could knock those numbers down.

Jay

[Junctionfan]

I don't believe open access is the answer yet. I think the railroads should be government funded into doing what ever the "important" industries "need" as far as service goes. For example, if BNSF in Montana which is dependant on a strong agricultural economy, requires cheaper services but it is not possible for BNSF, then if the people of Montana agree, split the difference and keep the state's economy florishing right? HOWEVER...........

I know the railroads don't like to be regulated by the reality is that businesses are stuborn when it comes to money-they are like moths to the flames and can't help themselves so it makes little difference if you give them money incentives as they will likely look for ways to make even more money so regulation might be the only way short of breaking up the large railroads into smaller ones to create competition but after seeing the government handle Conrail-not a good idea really..........

[MichaelSol]

Regarding the four train, one train discussion, if you can use an Excel Spreadsheet, you can develop a nice, quick economic model.

I am sampling a grain train from Shelby to Portland, so we have actual parameters for distance and for 25 car vs 110 car rates.

Make the following assumptions:
Labor is $70,000 annually for each crew member.
Each train has two crew members.
One train will be 110 cars.
Three trains will be 25 cars, and one train will be 35 cars (to yield the same number of carloads as the unit train)
The distance is 785 miles
The unit train rate is $2716. {April 15 tariff]
The 25/35 car rate is $3031. [April 15 tariff]

By using an Excel Spreadsheet you can play with the cycle times a bit, for instance using a longer cycle time for the bigger train.

Now, assuming, for purpose of worst case scenario of labor costs, that the train crews are with those trains for a full shift of three shifts each day. Assume that yard delays, loading and unloading is as efficient for the unit train as for the shorter trains, and attribute 5 days of the car cycle time for each cycle with no railroad labor associated with the cars. -- yard dwell and shipper control -- but the rest of the time are fully crewed 24 hours a day.

Now, this is simply for setting up the model. You can change these figures to simulate as realistic a conditions, or variables of conditions, anyway you see fit.

If the scenario assumes that the purpose of the short trains is to make for fast trains, assume that the fast trains can do a 12 day car cycle time, which used to be feasible, anyway, for that distance with a light train. For the long train, take the current BNSF car cycle time of 27 days.

Without making any pay differential for yard vs road crew, the total labor cost associated with the four short trains is $47,040. The total labor cost associated with the long train is $36,960, because it is spending a considerable amount of time sittimg somewhere because it is a big, long train and moves slow in this day and age. It forces other trains to move slower. 84 total crew sets are required for the short trains, 66 crew sets for the long train.

Because of the rate differentials, the four short trains yield $333,410 in gross revenue, compared with $298,760 in gross revenue for the long train; both alternatives contemplating 110 carloads total.

After deducting labor costs, under these specific conditions, the four train set scenario generates a net profit of $286,370, while the unit train generates $261,800 in net revenue to the Company. The fast train concept, in this instance, generates nearly 10% greater return to the Company in spite of 27% higher overall labor costs associated with running the faster, shorter trains.

Now, this is where it gets interesting under the standard, "time is money."

The short trains cycle faster. Within the economic time period, say a month, the unit train in this scenario does one trip. The fast trains do 2.5 trips. Labor expense increases accordingly. The fast train program would need 189 crew sets, compared to the unit train's 66 crew sets. The month's payroll for the fast trains would be $117,600, three times as much as the unit train labor expense of $41,067. But, the fast trains bring in revenue in that time period of $833,525, compared to the unit train's $331,956.

Allocating revenue to the monthly cycle, the fast train concept, in a month, generates, after labor costs, a total net revenue, to the Company of $715,925, compared to the unit train net revenue of $290,889.

During the month, the fast train concept is more than twice as profitable to the Company as the unit train operation, even though labor costs are three times higher for the revenue period.

At maximum utilization for both programs, the Fast Train program on an annualized basis would generate $8,600,000 in net profit whereas the Unit Train would generate $3,500,000. The railroad would be $5,000,000 ahead by choosing to incur more, rather than less, labor cost by operating shorter, faster trains.

This demonstrates why revenue is a much more important driver than costs.

Now, this is a scenario of the kind that planners would use to make some initial decisions, or to compare alternatives. It is designed only to show that unit trains vs short trains is a proposition that does not generate automatic conclusions based on apparent labor costs alone.

Because it is in an Excel format, it is an "active" model, that is, the whole point is to have it in the model format so that you can make changes, and the model automatic generates new profit figures, in order to view plausible alternatives. and outcomes as you change inputs, whether it be rates, labor costs, cycle times, or other factors.

In this instance, the natural alternative would be to find the "breakeven" point between the fast train concept and the unit train concept; that is, how fast would the unit train have to cycle in order to begin generating revenue in excess of the fast train model? A unit train does not have to be nearly as fast as the fast trains to generate that profit, because there is an inherent labor efficiency, but if it doesn't meet that minimum necessary speed or cycle time, then the fast trains are more profitable.

A manager would look at this and begin the process of refinement. What are the actual labor costs and crew needs on this route? Can the Fast Trains meet their cycle time goals? How much time is actually spent loading a short train vs a long train; unloading, yard time in Pasco, etc.. What is the realistic difference in crew costs if yard crews are used in the process? It gets trickier after that -- and that's the networking model difficulty -- how much "damage" does a long train do to a company's revenue production on account of system delays? Is there a cost factor outside of the labor scenario, such as maintenance increases? Is locomotive utiliization more or less efficient with one or the other, and is there a cost that can be assigned to that for the purposes of the model.

Importantly, during the month, the Fast Train program uses 110 hopper cars to move 275 revenue carloads of wheat, compared to 110 revenue carloads for the Unit Train. Annualized, the Fast Train program uses 110 hopper cars to move 3,300 revenue carloads, while its sister Unit Train uses 110 hopper cars to move 1,320 revenue carloads. Doubling the efficiency of the Unit Train to 15 days car cycle time, which will never happen, still only moves 2,640 revenue carloads in the year [that is, the Fast Trains have only a three day cycle time advantage]. Customers no doubt have some response to that, but that kind of cycle efficiency looks to a car fleet of 10,400, rather than 26,000, to meet demand. The model would be able to incorporate savings in Lease/Inventory/Financing costs.

At each refinement of the model, the model becomes more accurate.

If you have Excel, but have never actually used a model for these purposes, I can email this one to you. It's a start at looking at the interplay of speed vs. labor efficiency.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by jeaton

.I know you would have seen the numbers on the MILW's short fast Chicago-Minneapolis operations. I would submit that however numbers came out, at the time the trains were running, the double track line had quite a bit of unused capacity. Jay

That line was the crown jewel. 135 MGT annual capacity. As of 1978, I think it was carrying about 40 MGT.

Best regards, Michael Sol

[Junctionfan]

My idea of open access that might be good at this time is the class 1s start using each other's lines for certain types of traffic and directional movements when possible.

Some railroads seem to like this and both CN and CP do this in Canada at least in B.C and wi***o do it other areas as well.

This might be a way for them to accept open access. It's kind of like entering a cold pool-you could jump in and get really uncomfortable and unhappy for awhile or start with a foot then a leg and so on.......

Try encouraging this more and find out shortlines that the railroads seem to have a good relation with to help out the areas where customers have service problems as the Class 1s seem to develop better agreements either haulage or running rights with shortlines they like then with ones they don't.

I can't say it will work but it is worth a shot in the name of comprimise.

[PNWRMNM]

Junction,

The CP-CN directional running agreement is far from open access. It is just a specific version of trackage rights which have been around in the States for a long, long time. The UP and WP had a similar arrangement across Western Nevade for many years. I do not know how they accounted for the wide difference in GTM which shifted tonnage off the SP and toward the UP. I suspect, but do not know, the WP got some money for the excess SP ton miles.

Mac

[CSSHEGEWISCH]

One issue that still needs to be addressed: Since the actual owner of the track would have dispatching responsibilities, how would priorities for trains be determined among the various train operators?

[Junctionfan]

QUOTE: Originally posted by PNWRMNM

Junction,

The CP-CN directional running agreement is far from open access. It is just a specific version of trackage rights which have been around in the States for a long, long time. The UP and WP had a similar arrangement across Western Nevade for many years. I do not know how they accounted for the wide difference in GTM which shifted tonnage off the SP and toward the UP. I suspect, but do not know, the WP got some money for the excess SP ton miles.

Mac

I know but what if for example a couple of lines that reaches Los Angelas to Chicago to New York was used only as an intermodal line. My idea is that the class 1s can use that line with their own crews to move intermodals. It may not be as open access as what is going on in the U.K and Australia but it might be a North American comprimise that the class 1s can operate on each others lines for certain areas. This way the western U.S at least for intermodal wouldn't have either BNSF or UP in the west or NS and CSX in the east.

[Anonymous]

Ok. Have had a look - and thanks for those links. Interesting. So let me make a few more observations If I may - and I will use Network rail as an example.

1) The Infrastructure Owner will make the decisions regarding regulating trains. Now; I am not sure how freight trains are timetabled in the US. Are they built up ansd then let loose or are they scheduled to run? With OA all trains will be required to be scheduled. Miss the slot. Tough. Then of course you have all sorts of issues regarding crews and the like. This leads onto the second point................
2) Delay attribution. Yes. An industry in itself. the Performance Regime. An inverted Dante seven layers. This is based around Schedules 4 and 8 of the railways Act 1993 in the UK. Trains are classed in the UK from 1-9; there are regulated (apparently) with 1 being the highest (express Passenger and Freight - Parcels) with the objective beiung the least overall delay to the system as a whole. This is a fantastic statement if you think about it (sarcasm here). All trains are point to point timed; any delay between those two points is then attributed. As are late starts; waiting acceptance into yards; fire and brimstone. Is there such a system like this in the US? if I were an OA operator and my train was delayed therefore missing an important slot with a rather irate customer at the end I would like redress. This system may even have to extend to short lines...
3) Insurance, crew and the like. My train is scheduled to run from point A to B via VC. it cannot. Where do I run it. Ooops have to hire crew from somebody else. Can i have my money back.
4) Passenger Trains. At some stage they may yet come to dominate. they are infrastructure hungry and any improvement will have a large impact on freight services.

I am not against OA services at all. However some of you seem to be arguing for a theoretical paradise and then pointing to Europe as an example of how Open Access works. Let me say this again. Nowhere, nowhere on the continent or in the UK is there total proper Open Access. Nowhere. The infrastructure operators are in the hands of the government to one degree or another (no, Network Rail is NOT private). The priorities which the governments set for the social good come first - we fork out therefore pipers and tunes come into it. With Crossrail even established operators may have their contracts ripped up to make way for the new service across central London. HEx and Hull Trains operate to paths allocated to them by the govt; the tracks which they operate on are subsidised by the government. If I were a private owner running no trains looking to max my profits In would wither set a very low speed limit or charge for very expensive access.

There are a rather large amount of theoretics being operated in some of the models. Look and learn from where there is a degree of access - in the UK there are operators yes; but the tracks they are on are subsidised and if they had to pay full or even marginal costs then there would be some mightily narked operators and customers.

Besides; why would customers run trains in the long run. It is something which they may have very limited experience of and in 3-5 years the trains may be running back with the established railroad companies. That is what happened to NP over here. the barks for it are a way of customers pressuring the operators regarding rates?

[jeaton]

Michael

I realize that is possible to take an inter-active spread sheet and plug in numbers that provide a virtually unlimited range of results. Assuming that the model is not flawed, if all the numbers used are from observations the answer may well reflect result that would be seen in the real world. If the numbers used are not from observations, one has to begin to consider probabilities on the assumed numbers. In the case of the study you designed, the the prospect that the use of four trains would cut the turn time on the cars by half becomes a "big" assumption. Not saying that that assumption is right or wrong, but when I spoke of simulation, I was thinking of the kind that might test just that element.

And for Mark, I agree that a simulation of train operations requires a quite sophisticated model, including the subset that randomly plugs in weather based on known probabilities. (***, I just got hit with a hurricane.) No doubt, even the best around produce quite rough results. Something like that would work for me only because neither *** nor Matt have said they would give me any authority to run their railroads. In other words, if I was running a class one, I can assure you that I would not rely on a simulation model as the final basis for a decision.

By the way, if I was in charge, I might want to have a thorough understanding as to why the turn on grain cars is 27 days before I even began to think about reinventing the business. And, if I was going to look at options for diferent train sizes between between Shelby and Portland, I would run the crew cost numbers based on how the actual pay (and benefits) would work out for each scenerio.

Jay
Jay

[MichaelSol]

Jay, I understand that.

I probably should have bold-faced the part that stated:

It is designed only to show that unit trains vs short trains is a proposition that does not generate automatic conclusions based on apparent labor costs alone.

I probably should have bold faced the "begin" in the following sentence as well:

"A manager would look at this and begin the process of refinement."

I do however, prefer to look at some kind of actual scenario as opposed to the entirely theoretical arguments over the two types of trains, as I think the necessary constraints become more apparent.

And too, the point was to underscore that cost-driven analysis alone can be entirely misleading.

Best regards, Michael Sol

[MichaelSol]

Jay writes: "Not saying that that assumption is right or wrong, but when I spoke of simulation, I was thinking of the kind that might test just that element."

Well, and that is somethng built into this model, and tests exactly that element.

It permits changes in the cycle times to 1) see how that affects monthly revenue, and 2) to see at what point the Unit Train has to operate in terms of cycle time to match the revenue production efficiency of the Fast Train concept..

The 27 day cycle time is very high by historical standards on the BNSF and doesn't square at all with the claimed efficiencies of the shuttle system which is now carrying somewhere between 20 and 40% of the system load, and yet as shuttles carry more, the cycle time keeps going the wrong way.

In this model, the Fast Train concept would still be more profitable even if the Fast Trains were on a 22 day cycle time, compared to the Unit Train's 27 day cycle time, and of course, again, that is because the revenue component is higher because of the rate structure. After that, the Unit Train becomes more profitable.

Best regards, Michael Sol

[greyhounds]

Well, trains don't have to be short to produce great car utilization.

Jay, you may correct me (you know better than anyone here), but at the ICG we cycled 110 car "RATS" - what we called "Rent a Trains" between central Illinois and the Gulf in less than a week. What screwed things up was the lack of elevator capacity at the Gulf - they couldn't unload the trains as fast as we could deliver 'em.

Crew costs had more relative importance back then because the unions required us to use 24 (count 'em 24) man days to move a train from Champaign to Louisiana..

The ideal would seem to be big trains on fast cycles, which is what the BNSF is evidently after with their shuttle trains.

[beaulieu]

QUOTE: Originally posted by Junctionfan

I am not a big fan of pure open access as it reminds me of the chaos of highways. People can seem to get where they are supposed to due to conjestion, people don't drive worth a darn most of the time and cause accidents or more conjestion, nobody car pools and well...............it's just to busy (I said that already). With open access, I picture folk running signals, rail-rage, accidents, EOT to headlight traffic (bumper to bumper), lots of short trains occupying one big block and making problems with the bigger and higher priority ones, lot's of honking, plenty of folk waiting at crossings, and alot more Senator McCain and Secretary Mineta supporters.

JunctionFan when I look at OA I am looking at an American version of what I see happening in Germany, Switzerland and the Netherlands. I would think there would be something on the order of 20 to 30 companies, 8 to 10 would be set up to handle almost any kind of cargo, and the others would be niche players.
The hurdles to entry will be high enough to keep out the poorly back companies.
I would expect the big coal companies , The big parcel companies (UPS, Fedex), and maybe some of the large shipping companies (Maersk Sealand etc.), and the big AG companies (ADM and Cargill). One of the requirements would be to protect the public in case of a disaster like Graniteville, SC. ( ie. large insurance policy and resources to handle cleanup along with a viable emergency response plan ). To start up they would have to lure a cadre of people with relevant current railroad experience in operations, develop a training plan, emergency response plan, and prove financial responsibility.
Probably to the STB and FRA, although a separate Government Agency might be set up. They would then receive an operating license, a hazardous material license would probably have more stringent requirements.

[Murphy Siding]

Just what is broken that we are trying to fix with open access?

[greyhounds]

QUOTE: Originally posted by Murphy Siding

Just what is broken that we are trying to fix with open access?

Not a *** thing! The only way to make the North American railway network look bad with respect to service to its customers is to compare it with a standard of perfection.

Since Utopia is not an option, there is nothing that needs radical change.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

Just what is broken that we are trying to fix with open access?

I would use the word "unsatisfactory" as opposed to "broken". It can be argued more or less that railroads are under performing or contributing in a negative way (from a perspective of a national transportation policy standpoint) in the following catagories:

1. Ton/mile freight market share
2. Total freight revenue market share
3. Customer responsiveness
4. Service to captive shippers
5. Optimization of the theoretical "railroad advantage" over other transportation modes, e.g. moving bulk commodities at speed
6. Sufficient ease of entry for new transportation service providers
7. Staying on the cutting edge of rail technology innovation
8. Garnering a sufficient cost of capital recovery
9. Railcar utilization (see "one carload per month" post)
10. Following through on the AAR matra of "getting trucks off the highways"
11. Contributing to the trade deficit rather than aiding in trade deficit reduction
12. Too little capacity funneled into too few rail corridors (e.g. not enough dispersed redundancy, setting up a scenario of an economically catastrophic rail corridor shut down)
13. Lack of multimodal synchronicity with barge lines and short sea shippers
14. Creating bottlenecks due to selective line abandonments
15. Creating paper barriers to connecting shortlines, effectively minimizing the captive shortline's ability to expand their market reach

IOW, you have to be satisfied with minimilist performance to aver that today's railroads are "doing just fine". OA is only for those who want something much better.

[greyhounds]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

Just what is broken that we are trying to fix with open access?

I would use the word "unsatisfactory" as opposed to "broken". It can be argued more or less that railroads are under performing or contributing in a negative way (from a perspective of a national transportation policy standpoint) in the following catagories:

1. Ton/mile freight market share
2. Total freight revenue market share
3. Customer responsiveness
4. Service to captive shippers
5. Optimization of the theoretical "railroad advantage" over other transportation modes, e.g. moving bulk commodities at speed
6. Sufficient ease of entry for new transportation service providers
7. Staying on the cutting edge of rail technology innovation
8. Garnering a sufficient cost of capital recovery
9. Railcar utilization (see "one carload per month" post)
10. Following through on the AAR matra of "getting trucks off the highways"
11. Contributing to the trade deficit rather than aiding in trade deficit reduction
12. Too little capacity funneled into too few rail corridors (e.g. not enough dispersed redundancy, setting up a scenario of an economically catastrophic rail corridor shut down)
13. Lack of multimodal synchronicity with barge lines and short sea shippers
14. Creating bottlenecks due to selective line abandonments
15. Creating paper barriers to connecting shortlines, effectively minimizing the captive shortline's ability to expand their market reach

IOW, you have to be satisfied with minimilist performance to aver that today's railroads are "doing just fine". OA is only for those who want something much better.

Yadda, Yadda, Yadda. No evidence OA makes anything better.

[Anonymous]

Greyhounds responds:

"Not a *** thing!"
"Yadda, Yadda, Yadda."

'nuff said!

[jeaton]

Greyhounds

I think you are correct that the Rent a Train did make over 50 trips in the year running from Champaign or Decatur to Baton Rouge. I think most, if not all the trains crossed the river at Baton Rouge to elevators on the West Bank served by the MOP. After an allowance of 1 1/2 hours from the time the train was ready for departure to position the engine and crew, the IC guaranteed transit at 25 miles per hour. For each hour late, the railroad had to reduce the rental charge by an one hours worth of fee. At the base of $1 million per year, that was $114.16. (Chump change, by today's numbers.)

Anyway, that would come to something around 30 hours for the run from Champaign to Baton Rouge. Say 30 hours for the trip back, and there is 108 hours for left for loading and unloading. The shipper could take all the time he wanted to load and unload, but it was his 114.16 per hour. I think it quickly came to the point that those jobs were being done for about 4 hours on each end, and as John Ingram recently noted to me, fast loading and unloading was actually the key element in making the whole thing work.

Incidently, in the report and order the commision noted that the IC's then existing fleet of 600 grain hoppers was getting between 15,000 and 16,000 miles per year for grain movement in "regular" service. You can read "regular" as meaning loose car service, with the high seasonality of movement. The record accepted the IC's estimate of 75,000 annual miles for cars in the Rent a Train. Comparable hauls for both services.
As a rule, the IC didn't hold for tonnage, but few points got more than one daily service. Of course, if a car required an intertrain transfer and was late for the connection, another day could be lost.

Now the IC could have double service to two time per day, with trains running half the size. That may have done wonders for car utilization, but unless you can quickly sell the extra vehicle capacity, you can't generate the ca***o pay for twice the crews. Remember, unless the crew went on hours between terminals, it wouldn't make any difference on crew cost if the run took 2 hours or 10 hours.

Jay

[MichaelSol]

QUOTE: Originally posted by jeaton

ow the IC could have doubled service to two time per day, with trains running half the size. That may have done wonders for car utilization, but unless you can quickly sell the extra vehicle capacity, you can't generate the ca***o pay for twice the crews. Remember, unless the crew went on hours between terminals, it wouldn't make any difference on crew cost if the run took 2 hours or 10 hours.

Demand has generally exceeded supply in recent years for grain, so doubling the trains to increase utilization would make sense. In 2003, BNSF began having system wide cycle time problems, and as grain harvests came on, BNSF's "committment" to its shuttle service caused the whole grain car supply system to collapse, including its entire COT program. BNSF was not only in a position to sell the "extra vehicle capacity" that would have resulted from a Fast Train program, shippers were pleading for it.

No dice.

Unit trains or die.

Best regards, Michael Sol

[MP173]

I am back...but please, no more trick questions. I am not a 20 year old college student hung over.

A couple of questions...what is the going lease rate for railcars. I have a couple of rail customers, including a major leasing company and the number that sticks in my mind is about $700 per month. Does that sound correct?

If so, Michael, plug that number into your excel sheet and see what happens. And, if you want to send me a copy of the spreadsheet, I will check the numbers...as I always do.

So, essentially we are checking the pricing of a carload at $3100 vs $2700. However, as you know, those Montana grain farmers want the $2700 price, and possibly even lower. How would you go back from $2700 to $3100 with the promise of running faster trains? They dont care, they want lower rates. So, plug in the $2700 on the small trains and see what happens.

We all know what would happen if the rates suddenly went from $2700 to $3100 for a low valued commodity such as grain. Every politician in Montana and surrounding states would be ... oh well, lets let that comment go.

Second, the CSX is running 65 car corn trains from Northern Indiana to North Carolina. This fits somewhere in the middle of the equation. It must work, look at how profitable CSX is. OOPS!

Seriously, I believe 65 cars is the ideal number the consignee can receive.

Third, if I read correctly...and I may not be as I moved my oldest to college yesterday and am physcially, but not emotionally drained...the RAT for IC had extremely quick terminal turn around times. My guess is that the problem for the low utilization for grain is terminal...on both ends.

If that is correct, then BNSF is going in the absolutely correct direction IMHO by offering discounts for quick loading at the shuttle terminals. Perhaps BNSF's service problems in the past couple of years were based on a combination of factors and not just the shuttle operations.

I do know that BNSF ordered 6000 covered hoppers from Trinity about a year ago.

The more I think about open access, the more it becomes apparent to me that KEY lines in the US (Transcon, UP, NS's Chicago, CSX Chicago and no doubt others) are at or near capacity. OA will simply add to the chaos...wont it? If it wont, then tell me why it wont.

Someone had offered the suggestion that certain lines be set up for high speed intermodal and another for general freight...the LA - Chicago lines. What happens to those shippers on the high speed line that want to ship 15 cars a day of liquified petroleum gas, or really great wheat, or corn oil, or scrap metal, but cant? The door is closed on them.

Infrastructure is the issue here and just like the expressways which I drive daily in Chicago, there is no let up in sight. The tollways have similar problems also.

ed