"...and in other breaking news, standard gauge is 4' 8 1/2"..."

[Anonymous]

From the TRAINS newswire 04/07/06

BNSF to set up offices in China

FORT WORTH, Texas - BNSF plans to become the first U.S. railroad to open an office in mainland China, says a story in The Dallas Morning News. The Shanghai office, opening this month, symbolizes the growing importance of Chinese exports to freight railroads such as BNSF, which is experiencing unprecedented demand thanks to the surge in trade, the newspaper said.

"We think 60 to 70 percent of goods coming in from Asia is coming from China," said Stephen Branscum, group vice president of consumer products for the Fort Worth-based railway. The Shanghai office is expected to help the company stay in closer contact with its customers. The railroad currently operates only one office in the region – in Tokyo.

While BNSF will be the first U.S. railroad with offices in China, it will not be the first foreign railroad as both Canadian National and Canadian Pacific Railway already have a presence there, the CN in 2004, the CPR in 1997.

[CSSHEGEWISCH]

And so what's the big deal? Railroads, airlines, and various other transport businesses have had off-line sales offices for decades. Take a look at any old issue of the Official Guide.

[Murphy Siding]

[:O] Do you mean to tell me that a railroad had the nerve to send company reps to the area where some of their business is coming from????...."to help the company stay in closer contact with its customers."......[:O] What will they think of next?[;)]

[jeaton]

It's a cover. As FM could tell you, it is actually the new location for BNSF Board of Directors meetings, making it convenient for the China Government to issue orders on where the railroad will build new capacity.

[tatans]

You mean to tell me that an American company is actually doing business outside the United States? what kind of concept is that? been to Canada lately?

[Anonymous]

Great. More Chinese trash for America. Way to go BNSF.

[TomDiehl]

QUOTE: Originally posted by BNSFrailfan

Great. More Chinese trash for America. Way to go BNSF.

And how much of that "Chinese trash" have you bought at your local Wal-Mart?

If there's no "destination" for the cargo, there's no reason to haul it.

(Somebody has this at the bottom of their posts) We have met the enemy and he is us--Pogo Possom

[wallyworld]

And theres more breaking news..an late breaking item just in from our business correspondent- "Overnight, thousands of cheaply made imported goods arrived throughout the nation on store shelves and in another developing story, everyone is now officially subsidized by Chinese credit. However the good news is that everyone who lost their jobs making things to buy is now employed in the booming economy working for WalMart.

[Anonymous]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by BNSFrailfan

Great. More Chinese trash for America. Way to go BNSF.

And how much of that "Chinese trash" have you bought at your local Wal-Mart?

If there's no "destination" for the cargo, there's no reason to haul it.

(Somebody has this at the bottom of their posts) We have met the enemy and he is us--Pogo Possom

Alot. Yes I still shop at China Mart. (Wal-Mart) that is. [:D]

[trainboyH16-44]

Boo, Allen.
Again with the CNSF = China National Santa Fe.

[Anonymous]

All. It's called "sarcasm".

BNSF issues a rate differential that favors (even subsidizes) Asian imports (70% of which is from The Peoples Republic) at the expense of domestic BNSF shippers. BNSF's capacity expansion program (such as it is) is taking place mostly on the import intermodal corridor, while the lines that support the higher revenue grain and coal shipments are getting little if any improvement. BNSF treats it's American customers like crap while bending over backwards to solidify it's role in bolstering China's economic and militaristic challenge to the US.

And now they make the PR anouncement of locating an office in China?

......and in other breaking news, Brad and Angelina were seen holding hands in public. Could it be that they are more than just aquaintences?.......

[wallyworld]

Money talks and ------walks. As I sit here typing on my chinese notepad that is on top of my pressboard-Wallmart-knock together coffee table in my severely shrunk t-shirt that is slowly unraveling-I couldnt agree with you more.

[Anonymous]

What ever happend to American products?

[TomDiehl]

QUOTE: Originally posted by BNSFrailfan

What ever happend to American products?

The manufacturing base was destroyed by the corporate rapists back in the 70's.

[PNWRMNM]

Tom,

There is plenty of blame to go around, mostly to US Govt. EPA, Labor Dept, OSHA come to mind instantly. It is a long sad story. The corporate types simply responded to the hostility of govt and left. Same thing happened to railroad industry after 1906 but is tough to pack it off to China.

Mac

[CSSHEGEWISCH]

And FM's xenophobia rises to the fore again, and again, and again.

[M636C]

And I always thought that standard GAUGE was 4'8-1/2" (1435mm).

And you can avoid buying anything from China as long as you are willing to pay more (in some cases a lot more). Globalisation isn't going to stop. US made products cost more to make because the workers are paid more for the same work. There is no conspiracy. It is not the fault of the Federal Government nor of corporate management.

The big problem is improved communications, which make it as easy to get something made in China as in Detroit or Stuttgart or Milan. So the work goes where the workers will accept lower pay.

As long as you believe in the free market, rather than a centrally controlled economy, there is no option that will avoid work going to the lowest wage worker.

M636C

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

And FM's xenophobia rises to the fore again, and again, and again.

Your disingenuousness must be hard wired. As I have stated again and again on this forum, I have no problem with other countries wanting to sell their products in the US. I do have a problem with US railroad companies subsidizing the transportation of imported goods on the backs of domestic rail shippers. You know this full well, but in order to support your position (aka it is perfectly fine for importers to get favorable treatment from US railroads at the expense of domestic rail shippers) you have to engage in low ball name calling.

Fine, we'll just follow your train of thought and go with this: If I'm a xenophobe, then you are a traitor.

Now, care to revise your initial accusation?

[Anonymous]

What you all seem to be missing (aside from the xenophobic trend this topic is taking) is this:

The press release states that BNSF is setting up an office in China because "60 to 70 percent of goods coming in from Asia is coming from China". You'll notice there is no mention of BNSF setting up the office to facilitate the exportation of US goods into China.

Hmmmm, don't BNSF trains run both directions? Or do they only run west to east?

[Murphy Siding]

QUOTE: Originally posted by futuremodal

What you all seem to be missing (aside from the xenophobic trend this topic is taking) is this:

The press release states that BNSF is setting up an office in China because "60 to 70 percent of goods coming in from Asia is coming from China". You'll notice there is no mention of BNSF setting up the office to facilitate the exportation of US goods into China.

Hmmmm, don't BNSF trains run both directions? Or do they only run west to east?

To tell you the truth, I didn't notice a mention of BNSF setting up an office to facilitate the exportation of Chinese goods into the US either. Someone else exports the goods, and ships them to west coast ports. BNSF *facilitates* hauling the goods east on the railroad. Their rates are based on **competition**, by UP.[:0] I feel you are stretching logic, when you say BNSF is somehow subsidizing foreign trade at the expense of American shippers. If BNSF didn't pursue this rail traffic, someone else (UP) would.
As an interesting side note: Look at the shoes you're wearing, and tell me where they were made.

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

What you all seem to be missing (aside from the xenophobic trend this topic is taking) is this:

The press release states that BNSF is setting up an office in China because "60 to 70 percent of goods coming in from Asia is coming from China". You'll notice there is no mention of BNSF setting up the office to facilitate the exportation of US goods into China.

Hmmmm, don't BNSF trains run both directions? Or do they only run west to east?

To tell you the truth, I didn't notice a mention of BNSF setting up an office to facilitate the exportation of Chinese goods into the US either. Someone else exports the goods, and ships them to west coast ports. BNSF *facilitates* hauling the goods east on the railroad. Their rates are based on **competition**, by UP.[:0] I feel you are stretching logic, when you say BNSF is somehow subsidizing foreign trade at the expense of American shippers. If BNSF didn't pursue this rail traffic, someone else (UP) would.
As an interesting side note: Look at the shoes you're wearing, and tell me where they were made.

And how would UP carry any additional traffic that it is allegedly competing for?

This is the mystery of cheap rail rate competition. Argument 1: railroads are at capacity. Argument 2: they compete for traffic by offering loss leaders to Asian import traffic while overcharging American captive manufacturers. Argument 3: it makes perfect sense that railroads still compete on price, even though there is no room to switch if the pricing was rationalized.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

What you all seem to be missing (aside from the xenophobic trend this topic is taking) is this:

The press release states that BNSF is setting up an office in China because "60 to 70 percent of goods coming in from Asia is coming from China". You'll notice there is no mention of BNSF setting up the office to facilitate the exportation of US goods into China.

Hmmmm, don't BNSF trains run both directions? Or do they only run west to east?

To tell you the truth, I didn't notice a mention of BNSF setting up an office to facilitate the exportation of Chinese goods into the US either. Someone else exports the goods, and ships them to west coast ports. BNSF *facilitates* hauling the goods east on the railroad. Their rates are based on **competition**, by UP.[:0] I feel you are stretching logic, when you say BNSF is somehow subsidizing foreign trade at the expense of American shippers. If BNSF didn't pursue this rail traffic, someone else (UP) would.
As an interesting side note: Look at the shoes you're wearing, and tell me where they were made.

And how would UP carry any additional traffic that it is allegedly competing for?

This is the mystery of cheap rail rate competition. Argument 1: railroads are at capacity. Argument 2: they compete for traffic by offering loss leaders to Asian import traffic while overcharging American captive manufacturers. Argument 3: it makes perfect sense that railroads still compete on price, even though there is no room to switch if the pricing was rationalized.

I don't disagree that it makes no sense to low-ball prices on a scarce commodity-rail capacity. The part I do have a problem with, is the idea that the "Big, Mean,Railroads" are purposely overcharging domestic shippers for the expressed purpose of subsidizing import shippers. While it can certainly be argued that is the outcome, I've seen nothing that says that is the intent.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

What you all seem to be missing (aside from the xenophobic trend this topic is taking) is this:

The press release states that BNSF is setting up an office in China because "60 to 70 percent of goods coming in from Asia is coming from China". You'll notice there is no mention of BNSF setting up the office to facilitate the exportation of US goods into China.

Hmmmm, don't BNSF trains run both directions? Or do they only run west to east?

To tell you the truth, I didn't notice a mention of BNSF setting up an office to facilitate the exportation of Chinese goods into the US either.

Ummm, right there in the article, it says it.

"The Shanghai office.......symbolizes the growing importance of Chinese exports to freight railroads such as BNSF."

"The Shanghai office is expected to help the company stay in closer contact with its customers."

You notice whom it is that BNSF considers it's "customers"? Not Montana farmers. Not US petrochemical companies. Not the dozens of coal mines in the US, nor their power plant destinations. Nope, BNSF's customers are the Asian exporters, as per their own press release.

Now, if the intent of this office isn't to facilitate more exportation of Chinese goods into the US, what is the reason? BNSF doesn't operate in Australia, nor Europe, and for the most part neither Mexico nor Canada as well.

QUOTE: I feel you are stretching logic, when you say BNSF is somehow subsidizing foreign trade at the expense of American shippers.

Again, that's not what I said. I said (and have stated previously) that BNSF internally subsidizes the rates it charges in the import intermodal sector (rates which are usually less that 180% R/VC) by charging those domestic rail shippers rates that are usually much higher than 180% R/VC (often in the 400% R/VC range). This rate disparity in turn contributes to the imbalance of trade shouldered by the US. Again, if 180% R/VC is supposed to be the absolute minimum necessary for a railroad to be profitable, how is it possible for them to charge a rate of 106% R/VC unless they make up the difference somewhere else? BTW, "difference" and "differential" use the same root word, in case you haven't noticed.

QUOTE: As an interesting side note: Look at the shoes you're wearing, and tell me where they were made.

Doesn't matter. Again, this isn't about xenophobia, it's about a US corporation that engages in exhorbinant rate discrimination against US rail shippers for the benefit of import rail shippers.

[MichaelSol]

Well, they have to bill somebody to make up the difference, I'm not sure that a 300% or 400% rate R/VC imposed on captive shippers is an accident.

However, the thread raises an interesting issue, and may be one reason John Snow is on his way out.

The primary "race to the bottom" insofar as rates were concerned was with intermodal. Kind of the "revenge of LCL" in some ways. Has been and probably always will be little profitability.

Yet, enormous capital resources have been devoted to meeting the capacity requriements of a low-profitability traffic, while ignoring the capacity needs of the captive shippers because, well, they're captive. This is notwithstanding that capacity improvements for high margin traffic would yield improved equipment cycle times most likely permitting reduced rates and still maintaining the profit margin, just because of efficiency improvements.

Now, despite allegations that it's all Wal-Mart's fault, the primary reasons that Chinese (not Asian) imports have flooded American railroads is 1) an extremely undervalued Yuan, and 2) preferential transportation rates compared to captive American manufacturers.

Western railroads have been pouring tons of capital into carrying this low-profit traffic. It raises the question, when the U.S. is attempting to put pressure on China to revalue the Yuan, what is the position of the U.S. Rail industry?

Senators Schumer and Graham recently proposed legislation to impose a 27% tariff on all Chinese imports. This is based on studies which show that the Yuan is undervalued anywhere between 15% and 45%.

The 27% tariff is designed to restore a level playing field to American manufacturers in terms of fairly valued currencies.

If that were to happen, what do you suppose would happen to these enormous capital investments of the past five years if import traffic drops 30 or 40%. Wow, all of a sudden, those corridors have plenty -- plenty -- of capacity. And plenty of fixed costs to cover.

UP and BNSF then have a real incentive to try and get the traffic back --- from the other guy. What do you suppose will happen to intermodal rates? Up, or down? Who do you supppose will be paying even higher rates to make up the losses?

And suppose, just suppose, the AAR has to take a position on legislation that would restore currency competitiveness to American manufacturers? At the sacrifice of billions of dollars of investment in corridor capacity to carry imports?

Do you suppose that American railroads will support legislation to restore fairness to American manufacturers, or do you suppose American railroads have committed their financial futures to a politically manipulated Chinese Yuan which is designed to unfairly destroy American manufacturing capacity?

Who will they support? Who are they supporting? American manufacturers or Chinese manufacturers?

John Snow's role so far? That's a question that has been fairly raised.

Intermodal is proving to be the Tar Pit of modern railroading: politically as well as economically. The railroads can't get out.

[Murphy Siding]

QUOTE: Originally posted by futuremodal
Ummm, right there in the article, it says it.
"The Shanghai office.......symbolizes the growing importance of Chinese exports to freight railroads such as BNSF."
"The Shanghai office is expected to help the company stay in closer contact with its customers."

? I guess I just don't equate opening an office in China the same thing as opening an office for the expressed purpose of lowering freight rates to Chinese Exporters(?). It could just as well be an office to help justify higher rates in the future? Perhaps a little value-added type scenario to actually sell something other than price?

QUOTE:
You notice whom it is that BNSF considers it's "customers"? Not Montana farmers. Not US petrochemical companies. Not the dozens of coal mines in the US, nor their power plant destinations. Nope, BNSF's customers are the Asian exporters, as per their own press release.

I don't read this as saying the Asian exporters are their only customers. Does BNSF have offices that deal with their *other* customers?

QUOTE: Originally posted by futuremodal I said (and have stated previously) that BNSF internally subsidizes the rates it charges in the import intermodal sector (rates which are usually less that 180% R/VC) by charging those domestic rail shippers rates that are usually much higher than 180% R/VC (often in the 400% R/VC range). This rate disparity in turn contributes to the imbalance of trade shouldered by the US. Again, if 180% R/VC is supposed to be the absolute minimum necessary for a railroad to be profitable, how is it possible for them to charge a rate of 106% R/VC unless they make up the difference somewhere else? BTW, "difference" and "differential" use the same root word, in case you haven't noticed.

? This comes accross, to me at least, that you're saying that BNSF is making money on domestic traffic, so they can lose it on import traffic.?

QUOTE: Originally poste by futuremodal

QUOTE: originally posted by murphy siding As an interesting side note: Look at the shoes you're wearing, and tell me where they were made.

Doesn't matter. Again, this isn't about xenophobia, it's about a US corporation that engages in exhorbinant rate discrimination against US rail shippers for the benefit of import rail shippers.

Does matter[:(]. What is fueling all this is American consumerism. In an effort to save a buck, we tend to not look at the big picture enough.

[samfp1943]

QUOTE: Originally posted by PNWRMNM

Tom,

There is plenty of blame to go around, mostly to US Govt. EPA, Labor Dept, OSHA come to mind instantly. It is a long sad story. The corporate types simply responded to the hostility of govt and left. Same thing happened to railroad industry after 1906 but is tough to pack it off to China.

Mac

You might be suprised at how much of railroad's heavy metal castings are done outside the USA. to avoid laws and rules made by some of the above mentioned government agencies. For years a lot of the automotive casting business has been overseas for those very reasons.
Sam

[jchnhtfd]

QUOTE: Originally posted by samfp1943

QUOTE: Originally posted by PNWRMNM

Tom,

There is plenty of blame to go around, mostly to US Govt. EPA, Labor Dept, OSHA come to mind instantly. It is a long sad story. The corporate types simply responded to the hostility of govt and left. Same thing happened to railroad industry after 1906 but is tough to pack it off to China.

Mac

You might be suprised at how much of railroad's heavy metal castings are done outside the USA. to avoid laws and rules made by some of the above mentioned government agencies. For years a lot of the automotive casting business has been overseas for those very reasons.
Sam

Quite. Not to mention virtually all of the structural steel.

The US has a rather fundamental mind-set problem: there is a tendency to make all sorts of rules and regulations and taxes -- at least partly, it appears, because of a perception in the political arena and on both coasts (particularly the northeast and California and Oregon) that big brother knows what's good for the people, and should force the people to do what's good for them -- and then proceed to whinge on and on when the work goes somewhere else.

[vsmith]

Eh yer all wrong!

This is CLEARLY a pre-emptive strike by BNSF to gain control of China's rail system before UP can.....