COOPERATION!!!!!!!!!!

[Anonymous]

Ladies and Gentlemen, I have reread every input under the topic Miscellaneous R.R. Revenue and looked over my notes and have come to one conclusion. The trucking industry is winning the long haul shipping war because RAILROADS DO NOT COOPERATE WITH ONE ANOTHER!!!! I believe what needs to be done if railroads are to grow.
1.All railway companies must sit down in a big room and come up with a way to standardize swiching rates.
2. If say, BNSF talks a customer to ship by rail but BNSF only moves the car 1 mile and NS moves it 500 miles then NS should "kickback" a small portion of the profits it made on that 500 miles to BNSF for bringing in a new custmer.
3. Railroads need to come up with train scheduling between each other so that custumers will know how long it will take to get a car from point A to point B.
I believe that if the railroad industry would cooperate with each other they can take alot of trucks off the highway. Am I wrong? If I am please straiten me out.
TIM A

[wabash1]

So let me see if i get this straight. we both work at the same job i work 2hrs make 20 dollars. you work 10 hrs for 200 dollars. but you are going to give me 80 dollars for sitting at home drinking beer while you work and that we get paid the same amount. where do i sign up.

[edblysard]

Wow, Tim, ..
Lets see if this helps. Yes, railroads do cooperate with each other, we share a common data base on car movement, but, like any business, we also compete with each other. If we all got together in that big room and set a fixed rate for switching, most of the CEOs would be charged with rate fixing. They call it a monopoly...at one time, before 1985, the federal goverment did set a fixed rate for a lot of the things railroads charged for. Because there was no way for any road to charge any more or any less than the next, the smaller roads, or those who served limited areas couldnt make enough money to cover their expenses, and went bankrupt and out of business. Remember, railroads have a fixed number of track, routes and mileage they can use, all owned and mantained by the railroads themselves. Unlike your interstate highways, which are subsisdised by your tax dollars, or your city streets, again paid for with federal funds, property taxes and sales taxes and bonds, railroads have to foot the bill for all of their expenses. Take the size of say, UP, verses little ol Port Terminal Railroad. They have thousands of mile of track, we have around 450. But it cost us the same to buy ties, switches, rail and deisel fuel as them, so our cost are equal in that respect. Truckers dont pay a dime for the freeway they use, we bought all 450 miles of our right of way. Truckers dont have to maintain the overpass that they hammer, but if we tear up the track, we pay to repair it. Free enterprise rules truckers as well as railroads now, but untill 1985, we had to charge the same as any other railroad. But I bet JB Hunt, if they really wanted your business, could and would legaly cut their rate down below Schnider to haul your load of widgits from Chicage to LA. Before 1985, railroads couldnt do that. When Regan signed the Staggers act, the federal goverment said, in essence, "yes, railroads are private industries, business run for profit, not public utilities, and they should be allowed to compete between each other". Untill then, all rates had been set by the goverment, and they were higher than they are now, so shippers went to trucks in a big way, due to cost. But now that we can compete between ourselves, railroads that invest in back into the property, plant, newer locos, better computers can give shippers a better rate than ever. Look at it this way, why would I invest millions of dollars to double track, and install new signals on my main line from Texas to California, improve my fleet, hire more people, just so I have to share my profits from that investment with someone who didnt invest a dime, but did drag a boxcar across town to my yard?
And yes, we do schedule trains amongest each other, we have no choice. Here at the port terminal, our member lines have slots allocated to them to bring in their trains, which we have been advised of hours in advance. BNSF 102 will be here at 1600, every day, just like EW60, for the UP, will show up at 1630 to pull UPs cars. Sometimes, just like truckers, breakdowns occur, congestion happens, but overall, we all work to get the train to where it needs to be. It is in our best intrest to do so. As for the BNSF/NS mentioned, if BNSF gets paid its rate to haul the car 1 mile, and NS gets paid its rate to move it 500 miles, why should NS share their profit? If you sold ten loaves of bread, but rainbow sells ten thousand, why would they give you part of their profit? Your both in the bread business, competing against each other. Rainbow wins and makes more money because it manufacturing cost per loaf is cheaper than yours. When the price was the same for 1 mile on road XYZ, as it was for road ABC, but ABC was huge and XYZ was small, well, XYZ went out of business. But now that XYZ can charge a little less than ABC, more shippers are sending cars across XYZ's railroad, even for short hauls, because it cuts down on their cost. XYZ wins, they make money. When it cost the same, why use two roads?
As for taking trucks off the road, look at this.
Before 1985, it cost the shipper the same, per car mile, to haul a boxcar on any r.road. So if you were located in nowheresville, north dakota, 100 miles from the nearest major railroad yard, you would pay the same, per mile to have your boxcar hauled out to you as the guy sending 50 boxcars to new york. Lets say you only need one boxcar per week, and you dont even fill it up, you only have it half full of machinery. So it a less than car load shipment. Justify the expense of the railroad to maintain 100 miles of track, pay crews, and maintain a locomotive just to service a business 100 miles away that only needs their service once a week?. But trucks can bring your machinery to your door, on public roads, that you paid for via taxes, and their cost is ? Driver salary and fuel. There is no public funds spent on the railroads, yet we(taxpayers) spend billions each month to maintain the interstate, but dont charge a user fee to the people who use it to make money(truckers). Railroads spend millions each month to maintain their tracks, so each mile of track has to earn its keep each day, or the railroad wont keep it. Take where I work, the PTRA. The only reason we exsist is because there isnt enough room for all the railroads to build tracks into the ship channel area, and because we can switch cars cheaper that the class 1 would charge. If you are say, Shell Petrochemicals, and you ship almost exclusively on the UP, we, PTRA, pull and spot your plant, and when you pay your UP bill, part of that bill includes the fee we charge to work your plant. And that part is cheaper than UP would charge you if they did it, because UP dosnt have to maintain the tracks, pay the crews, purchase the locomotives ect...
Again, to the lots of trucks off the highway.
Trucks deal in small amounts, or less that car load shippments. They haul a small amount, per truck, of frieght and goods, and most of it is for one customer. You dont see 100 trucks all going to the same business at the same time. The advantage railroads have is volume. We can, per mile, move huge amounts of almost any product coast to coast cheaper that anyone else. What we cant do, is haul small amounts of a given product coast to coast for the same money as a truck. So trucks will always have a market in the less than carload business, and railroads will allways have the huge volume business. And one tank car holds about three times as much as one trucktank, a boxcar about twice as much as an eighteen wheeler trailer.
So yes, on less than car load shippments, trucks are the winners on long haul. On 100 cars of wheat, well, BNSF and the Port Terminal Railroad just took 200 to 250 trucks off the road this afternoon, twice.
Stay nosy...keep asking tough questions,
Ed

[Anonymous]

Wow, Ed. I need to get your address so I can send you some bandaids. After that one, your finger tips gotta be bloody. Some really great info! I disagree that trucks don't pay for hiway maint. They do in fuel taxes and some other piddly taxes that they pay. But, they don't come near covering their fair share. Don't get me started on trucks vs rails. I fart wrong at work and I am taking a whiz test. Almost anybody can get a CDL (I have a class A CDL myself) and roll down the hiway hauling whatever and not ever see a urine test. A truck full of whatever rolls killing three people and you are lucky to see a little blurb about it on the news. A train derails 10 cars of coal in the middle of nowhere it is all over the news. What gives? The railroad industry is constantly scrutinized, while a large portion of the trucking industry slips through the cracks never checked. I have never seen a train swerve and hit somebody else or never had a train be discourteous to me on the hiway, or flip me the bird and not let me merge onto the hiway. O.K. I'm done whining.

[Anonymous]

ED, Thank you for the info. It has helped me rethink thing's. As you probably figured out I am still trying to understand this railroad business. This topic started from one of my Son's question's. Here in our town of Buffolo Grove, the Wisconson Central has tracks. My son noticed that they were removing the switches from the line. One was a Lumber company, The other was a factory that made paper cups. He wanted to know why these companies do not ship by rail any more. I tried to come up with a explanation but as you can tell I do not work for the railroad.
TIM A

[wabash1]

Most generally when a railroad pulls out switches it is becose if they isnt enough revenue to cover maintanace for that industry then there is no need for it. so they tear it out and make it solid rail thru there. cost saving measure. it is also safer to

[csxns]

Check out the Transportation Community on AOL.Here the truckers talk about RR'S.

[Anonymous]

I don't want to look at that site. I probably would just get all fired up. There is no argument. The RRs pay their own way and the truckers don't. Period. Rail is safer and more effecient (do the math 500 hp truck hauling maybe 50 tons, 12000 Hp consist moving 19000 tons, which was typical coming out of Gillette, which can vary with grade. That is well under 1 Hp per ton as opposed to 10 Hp per ton if that good on a truck.)

[Anonymous]

Tim,
Ed has told you a lot of things and I would not challenge any of it. It was a very thorough response. The two biggest edges motor carriers have over the rails are reliability and transit time. Most industries have adopted some form of Just-In-Time inventory. That does not accomodate much flexibility. As I see the trend, single car load shipments are a declining aspect of rail business and may go the way of LCL. Unit trains, multiple cars, annual volume rates, etc. all in contract form are the growing rail car business. Intermodal is the single fastest growing facet of rail business, but the profit margin there is much smaller. Switching is but one part of miscellaneous revenue.
Examples of railroad cooperation exist all over. It would be misleading you to convey the idea that railroads are constantly at each others' throats. Run through trains, transcons, guaranteed deliveries all relay on cooperation and much swifter transit times.
Sorry I didn't answer you earlier...I don't open up every day. There are still many opportunities to create more shared ventures with railroads and motor carriers. A lot of conditions need to be agreed. But all is right with the world today...the Redskins beat the Cowboys. OOOORAAAH
gdc

[Anonymous]

If Intermodel is the fastest growing facet in the railroad business, why is the profit margin so low? I must be missing something here, for if I as a railroad were saveing the trucking industry thousands of dollars per day in fuel. I would make darn sure I was getting a good profit out of them for that service.
TIM A

[cabforward]

**observations about transportation from watching the media for several decades..

truckers do pay ( i guess ) less road-use taxes, maybe less than their fair share.. most truckers are independent and could not pay high road-use fees. trucking companies probably could afford to pay them, but on the basis of the number of trucks in the fleet, it probably wouldn't make a big difference in generated revenue.. r.rs., as they own the row, pay property taxes on it, as landowners must..

in the 19th cent., r.rs. were a major influence on the movement of farm products and they exerted their dominance on 'little people'.. many times driving farmers to ruin thru high freight rates or other means, then buying up the land and selling it to favored buyers.. maybe it's not fair to judge people this way, but there can still be found some resentment among descendants of families who trace their history back to times when r.rs. enforced punitive measures on customers and landowners who got in the r.r's. way.. ( this is post civil-war ).

in a historical novel, 'the octopus', a farmer asked a r.r. exec the basis for the rates charged, as the farmer was told he had to pay a higher rate than he budgeted for in his planning.. the exec told him, 'whatever the traffic will bear'. if the r.rs. of america have started to live this stigma down, it is only a recent change in attitude towards them.. in the last 150 years, r.rs. have sowed much bad feeling among communities; now they reap the bad feeling they spread to others.. payback is h**, guys!!

[edblysard]

Hi Tim,
First, I am not bashing trucks, my father in law is a owner operator...trucks have a valid place in the transportation business, they can do things railroads cant, like deliver to your door, at a specfic time, and like the fed ex guys say, if it absolutely, positivly has to be there on time...the reason intermodel works so well is because it is cheaper, for freight that isn't time sensitive. The two common "intermodel" shipments you see are TOFC, trailer on flat cars, and containers. TOFC benefits the trucker, JB Hunt is a good example, because they dont have to pay fuel cost, the trailer dosnt get worn out as quick, they only have to pay a driver at each end for a short haul, and they, JB Hunt, are in a position to divide their freight into two classes, those that can get there when it gets there, and those that have to be there at a specific time. The "gets there when it gets there" trailers go by train, the shippment that has to be in Chicago tomorrow hits the highway. The containers you see in well cars, or the "stack" trains, well, the boxes you see this summer are full of the clothes and toys that go on sale next christmas. Its cheaper for the overseas manufactures in Aisa to ship the "box" from their port to LA, have it put on a train to New York, taken off the train at NY, and driven the last few miles to the final destination, than it would be to ship the cargo all the way around south america to NY. We are not saving the trucking industry anything, we are moving the cargo they are not set up to. And to answer a question I though of for you, the empties go back from the east coast to LA loaded with goods for the west coast, and sometimes, but not often, goods being exported back overseas.
Think about this, can you imagine the cost of purchasing, then mantaining a fleet of , oh, about 500 tractor trailer rigs, and the cost that would go with them, just to drive from the west coast to the east coast day in and day out? The insurance and fuel cost would be staggering. But to drive from, say, NY to Chicago, and get paid for it, then Chicago to Houston, and get paid for it, then to New Orleans, then New Mexico, so forth and so on, each trip pays for itself and the wear and tear on the rig. But you couldnt make enough money coast to coast, unless you specialized in one product with a high demand and a high profit.
Heres a good one for you. Remember the trucking company, Overnight Trucking, or Overnight Express? Guess who created it, ran it for several decades, sold it, but still owns a big part of it?
Union Pacific.
It was sorta like United Parcel is now. You could have them pick up your box of whatever, at your doorstep, take to the depot, put it in the next boxcar in a train going to where you wanted to ship it to, and when your boxcar got there, it was unloaded, you box was put on a delivery truck, and driven to the doorstep of the reciver. Sounds like UPS? Up got out because they couldnt make the money they needed to keep it in the black. But then UPS shows up, and they even have their own containter train, two or three times a day, east to west coast and back.
Both Santa Fe and Southern Pacific had premium intermodal service, SP's Blue streak, and Santa Fe's Q train offered, for a higher price, guaranteed deliver time, down to the hour. BNSF will still get it there pretty darn quick, for a price.
So the tall skinny is, its cheaper for trucks to do the short haul, city to city on less that car load shipments. Its cheaper for railroads to do coast to coast on huge volume. Its cheaper for trucks to do coast to coast on specialized, less than car load shipments. The trade off for shippers to use intermodel is cost versus time. If we, railroad, charged the same as truck, but took longer, everyone would ship via truck. The benifit is we do volume at a lower rate. We profit due to the sheer volume of non time specific goods shipped. Truckers profit due to the volume of time specific goods.
There are more issues involved, but thats the basic reason. I am hoping gdc will jump in here somewhere, he has a cleaner, better way of stating the facts.
Keep asking questions, Tim.
We wouldnt be answering you if it bugged us...
thats what this forum is for..
Stay frosty..
Ed

[BRAKIE]

Speaking of trucks,if anybody thinks truck lines is johnny on the spot,you need to take a another good look.I have seen shipments a day or two early to a week and a half late.Seen drivers come in with the wrong trailers but correct bills.After you break a seal and open the door and find a load that doesn't match the bills that is shocking to say the very least..This happen last week.
A driver came in that could speak very little english,I took the bills,pop the seal and open the doors of the trailer,imagine my shock when I found a load of beer instead of lawn mowers.I could not hardly understand the drivers broken and poorly spoken english,so,I ended up by taking the problem to the shipping/recieving manager..As of last Friday we was still looking for those lawnmowers to arrive at the warehouse.

[Anonymous]

Please keep in mind that cooperation and greed cannot be used in the same sentence. Therefore you have introduced an inherent problem with the US rail industry.
Thank you,
Mike

[BRAKIE]

Do you think truck line cooperate with each other? Guest again.

[csxns]

You will really get fired up at the Trucking magazines. They are woanting to run Road Trains in the USA and carry more weight and congress is thinking about it.

[csxns]

Larry i use to work in a warehouse also had a problem with a trucking outfit also it was CF and our load of brooms was 4 days late we called CF and they said they were in Phila PA stuck in a CSX yard.

[Anonymous]

Two things, Tim! First, it's more expensive for a railroad to handle a trailer or container than it is for a trucking company. For instance, railroads need ramps at either end and someone to run them. If the shipment is in containers, then there is the cost of maintaining chassis's. At intermediate points, sometimes it is faster to interchange on the street rather than by steel wheel. In that case you have the cost of the chassis as well as the drayage between the two railroads. The cost of lifts by the ramp cntractor, the equipment such as straddle cranes, the property, etc all add up to costs which eat into profit.
Second, $$$ does come into play. It is very easy to price yourself out of business when competing with motor carriers on single or few shipments. Railroads realize their most efficiency from the economy of scale, i.e. the more you ship, the cheaper it gets. Fixed costs are spread over more shipments.
So we do maximize our profits, it just has less flexible limits than railcars.
gdc

[BRAKIE]

I understand what you are saying,but understand,truck lines like to cover up their mistakes and their favorite target is the railroads,lack of drivers,lost paper work,or the truck broke down enroute routine.

These lawn mowers was shipped last week by truck according to our computers.I am sure it is sitting in some drop lot being over looked or down on the truck lines pick up and deliver list.

[edblysard]

Hey Larry, I got some brooms for sale, real cheap. A whole lot of them...

[csxns]

And remember CF went broke.Do you think the lawn mowers have been stolen.

[Anonymous]

Ed, I haven't seen this addressed yet, but with rr's hauling LCL in the fifties and sixties and being able to do it (presumably)profitably (when depots had team tracks, industries put in switches rather than taking them out, etc.) is the reason LCL has gone the way it has primarily because of the Interstate hwy system or what? (ie, since prior to '85 if rates were set it seemed like it would have been worse for rr's yet there were a lot more freight trains then!)

[Anonymous]

For the most part, LCL was gone before the interstate system. It was just too capital and labor intensive to be competitive. gdc

[Anonymous]

gdc, (Or anybody)
1. What does LCL stand for?
2. Ed mentioned that it is very difficult to compete with trucks on less then car load shipping, j mentioned that if a industrial or business switch is not profitable they pull the switch. Does this mean that for the most part, railroads are giving up on boxcar and low volume customers?
TIM A

[edblysard]

Hi Tim, you answered part of it your self, Less than Car Load, LCL for short. It means a box car filled with mix shipments, ie a bundle of brooms, a case of paper, ten boxs of wine, all going to diffrent places. It use to be railroads had a freight house at each major stop, and the lcl boxcar was spoted there, the freight for that stop was unloaded and stored at the freight house, the boxcar, with everything else left inside for the next several stops, would be picked up by the next passing local. At major cities, this would be a big operation, sorta like a UPS sorting station. You went to the freight house to pick up your shipment, or paid to have it delivered to you.And yes, they are or have given up on lcl, but boxcars are used for a lot of other things, car parts, wines, food stuff such as bagged rich, flour, I have seen everything from bricks to china plates loaded in boxcars, their for anything you need to keep out of the weather, even lose dried peas and rice. But you can still use half a boxcar, if thats all you have to ship, but you will pay the same for a half full car as a complete load, so..
Ed

[Anonymous]

Ed, do you forsee the day when small business's (such as small whiskey maker's) will lose there switch connection's if they do not ship x-amount of material via rail? Can railroads pull your switch when ever they want too?
TIM A

[Anonymous]

Good evening Tim and Happy New Year!
On NS, you would never lose your switch as long as you were shipping something, even a small amount. If you were not using rail, but still desired to keep your connection, there is a small annual fee designed to cover maintenance. You're really taxing my memory, but as best I recall, it was $1,200 annually for a branch line connection and $3,000 for a mainline lead. gdc

[edblysard]

Tim, I think a lot depends upon the railroad. Take where I work, half of our customers get two or three cars a day, some two or three a week, the other half gets hundreds a week, yet both generate money for us. If it was a big class 1 road, I doubt they would have to "quit" a business that shipped small quanities of goods, as the price and service would have driven the shipper to trucks a while ago. And the switch belongs to the railroad, they can do with it as they please, but on a small or regional road, they most likley wouldn't pull the switch unless the company it served had switched to truck, then the cost of maintaining the switch would make pulling it reasonable. Also, abandoning a strech of railroad is kinda hard to do, the railroad has to pettion the surf board, explain why they want to abandon this part...here in houston, UP kept a old Mo Pac line that was 20 miles long in service for many years, just to serve one customer at the end of the track, because the ICC,(now the surf board) wouldnt allow them to abandon it. When the business went bust and shut down, instead of continuing it's
attempts to abandoning the track, UP sold it to TDOT, (texas dept of transportation) because it was along side IH 10, and it became part of the highway expansion project. But for a regional road, every customer is valuable, so pulling a switch, or closing a spur isnt done often.
So, as long as its a small or regional road, or a terminal road like mine, every car counts. If its a big road, they would weigh the cost of maintaining the track, switch and spur. As to the day coming when x-volume is the smallest number of cars or no service, dont really know, with the merger race still simmering, it may come to that, but I doubt it, there is still enough volume in single cars to justify the big roads running general freights instead of unit trains only...
Ed

[wabash1]

Ed on the ns road i work for there is several elevators that during the summer might ship 1 car amonth and a few that maybe 2 or 3 a week all owned by the same company. but during fall and winter you cant keep enough cars there. some of these spurs only hold 10 cars others more. and as far as i can tell the "mow"is keeping the switches up to the task. I know of 3 switches that have been taken out that there hasnt been any cars spotted there for years so they took the switches out and for every switch we have taken out. we put 2 new ones in. new buisness.

[BRAKIE]

Those lawn mowers showed up last night.They have been sitting in a drop lot all this time.