In terms of rail car loadings (volume), Who is the largest single customer? I presume it would have to be a coal related business.
Probably Peabody Coal Co. North Antelope Mine in the Powder River Basin coal fields.
[Quote: In terms of rail car loadings (volume), Who is the largest single customer? I presume it would have to be a coal related business.
-Quote: Probably Peabody Coal Co. North Antelope Mine in the Powder River Basin coal fields. ]
In terms of tons moved, the distance they are moved and the number of coal hoppers it takes to move them, you’re both almost certainly right.
I wonder, though, who the biggest private shipper is who generates the most revenue? Somthing Intermodal, perhaps, TOFC like Schneider, Hunt or UPS? Or COFC like Sealand or China Shipping? Or an automobile manufacturer like Ford?
Twenty years ago I might have put a chemical or oil company at or near the top, but proportionately to today’s traffic I don’t think Dow, ADM or petroleum would be “up there.”
But maybe if we look only at the months of October and November an agricultural company would rank high, but even then I’m not sure grain shipments, as overwhelming as they can be in season, would get right up near the top. - a.s.
I would say that through the Sixties and Seventies, the biggest revenue producer for railroads was probably General Motors. Steel to parts, parts to assembly lines, finished products out the door. All very high-value, and high-revenue, loads.
Today, probably a global intermodal company.
That sounds pretty reasonable to me. - a.s.
While the exact numbers are considered confidential by both the railroads and the customer involved, it is generally acknowledged within the rail industry that the single largest customer by gross revenues is, and has been for sometime, UPS, Inc. While UPS is notoriously tight-lipped they have acknowledged in the past that about 25-30% of their surface package freight moves by rail. This figure does not include any of Overnite Transportation’s LTL business moving by rail, since UPS purchased Overnite several years ago and rebranded this service as UPS Freight. By contrast, UPS’ primary competitor, FedEx Corp., goes out of its way not to use rail. In 2005 UPS, Inc. has gross revenues of $42.5 billion which is almost as much as the entire North American rail freight industry grossed during the same period.
Does anyone know why Fedex doesn’t use rail?
Because they want to go out of business. They are going to HAVE to start using rail more if they want to compete with UPS and USPS. Airplanes are nice (and steeped in tradition), but becoming impractical (volume-wise and financially). They will always need them for overnight, Europe, etc., but for regular rate shipping a train has a 767 beat any day of the week.
It would be very enlightening to know what UPS’s impact on the industry is. Legend has it they are very service oriented. I have heard radio communications in which certain trains have been referred to as “UPS trains” or “mail trains” and there almost seems to be a parting of the waters to get those train thru, even extending from other carriers clearing crossings.
“UPS” seems to be a language that is understood.
Pricing on trailer moves would be interesting, but I know that will not happen…all indications are that is very confidential information.
UPS is certainly an extremely well run company. Does anyone know if they have ever considered the purchase or investment in a railroad?
ed
FedEx does use rail - I have seen their trailers. FedEx is always balancing cost, delivery time and reliability on their shipments. Thus, far the mix is (1) trucks - most people don’t know that the majority of FexEx is moved by truck; (2) air - remember, their airplane fleet is essentially a sunk cost that they need to keep that as utilized as possible; and a far distant (3) rail.
dd
Don’t forget that Fedex is three services which do not use the same equipment. While the same UPS route driver delivers both air and ground service packages, at Fedex there are two different delivery systems Fedex Ground (old Roadway Package Express - RPS) drivers are independent Contractors, while Fedex Express drivers are Fedex Employees. I think the trailers that you see on the railroads are Fedex Freight (the third arm of Fedex). You would think that Fedex could sve money by combining Express and Ground, the use of Contractors and no Teamsters, must offset the weak rural services.
Rural service? as in delivering into the “hinter lands?” Then by what standard does Fedex determine just what is “rural?” Population? Distance from hubs?
The main difference between UPS and FedEx regarding the use of rail intermodal service is that UPS has made rail intermodal an integrated part of their transportation network. By contrast, FedEx uses it only when they absolutely have to, which is quite rarely. Also, UPS prior to their purchase of Overnite Transportation, was a 100% unionized company while FedEx is a nonunion and uses owner-operators to move their ground shipments over the highway. Doug Duncan, President of FedEx Ground, and former CEO of Viking Freight, is a vocal critic of rail intermodal service, and is frequently quoted as such in the trade press. Ironically, UPS’s desire for a coast-to-coast high speed express train, that BNSF and UP fought over several years ago, was in direct response to the faster and more reliable FedEx over-the-road service. Also, UPS recently took a number of lanes off the rail in order to reduce transit times by one full day in order to meet the faster FedEx transit times by highway.
Both, when the contractor can’t make a profit delivering to an area they won’t do it. Some rural deliveries are cross-subsidized by UPS in order to obtain the accounts. I ship products for a national outdoor outfitter, I have shipped more items to places like Gillette, WY or Glasgow, MT, than I have shipped to New York City or Philadelphia, and thinking about it I don’t recall ever shipping anything to Washington DC. I shipped an item to a customer with the address of 40 miles west of Belle Fourche, SD on Highway 24. At Fedex Ground that would have been good for laughter around the water cooler.
So years ago, a supplier was coverting his shipping system to computer and his local dealer got a note, “I need more of an address than just Rockford, Idaho (no zip code)”. The dealer wrote back, “There are only two businesses in this town. One’s a grain elevator and we’re the other one. The UPS driver can tell the difference!”
dd
Does anyone know what division of FedEx uses the Bobtail trucks with the sleepers? I think those trucks are under 26k lbs which would mean they wouldn’t need a class A driver in many states. I kind of questioned the amount of cargo they could carry compared to doubles or triples, but they may make up for it with not having to have a regular commercial driver.
Probably the Specialized Service Division of Fedex Freight. They handle products like a MRI Scanner, Mainframe Computer, etc. Stuff that isn’t real heavy but is bulky and requires premium handling.
Those Fedex trucks that “Broncoman” mentioned are Fedex Custom Critcial. This used to be known as Roberts Express. I belive Fedex bought this company around the time they bought RPS from Roadway. I’ve been retired from UPS since October of 2001 and spent a lot of time pulling “Z” trsailers in and out of various railyards.
“Roadranger”
The reason the UPS trains run on time is because UPS DEMANDS service. Everyone else just
asks for service. When a UPS piggyback train pulls in the yard there is a UPS intermodal
agent standing there writing down the arrival time. The unloading crews know to go to
the UPS trailers first because they are being timed. UPS is run as a military organization.
And pays for it. $$$