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Cold Train backers revive lawsuit against BNSF
I know the facts are limited here, but it sounds like Cold Train signed a contract locking them into shipping almost exclusively with BNSF with no promises on delivery or penalty for delays. If true, that isn’t very smart business on the part of the Cold Train company.
On time performance plummets from 92 percent in August 2013 to just 4 percent in February 2014…That makes for a pretty good case in my book. Still, the railroads think the competition is itself and not the trucking industry.
Mr. Jeffries. True. But would any customer, especially a new one, think a service provider would constitute 4% on time delivery as acceptable?
Shows that if the railroads don’t invest in capacity for improved reliability they won’t be able to pick up more freight from trucks.
It seems to me that BNSF had a chance to break into the temperature controlled market again after losing it to trucks and fumbled the ball. Now crude by rail has backed off and Cold Train is gone too. The whole thing is just a sad tale.
This is just like NS’s decision to do away with its RTS, taking a long range product and dumping it for the short turn profit. Poor decision by each rail roads management.
This case shows that you need to consider every possible eventuality in negotiating a contract, such as a penalty for not adhering to the agreed schedules. Even though Cold Train may not have negotiated such a contract, the report that BNSF would not let them out of the requirement to ship 95% via BNSF when service dropped so low would seem to justify a settlement by BNSF to avoid a jury trial.
What do you do when your handed a whole bunch of CBR traffic in your lap, hit a nasty winter with a capacity stricken plant. Ouch, meltdown. Anyone with an olive branch?
It seems that BNSF would have been wise to let Cold Train out of the 95% requirement temporarily until they could perform again. Then they would have the traffic back again, with no lawsuit.
Now just think if the Milw. Rd was available and remember the ‘XL’ and ‘Thunderhawk’ service of the early 1960’s which made the NP and GN scramble.
One fact BNSF should have understood going into this was the cargo in question was perishable.
In 2014 Cold Train announced both major expansion plans, AND an affiliation with another company that would boost it’s capital. There is some speculation here in North Central Washington that the affiliation didn’t take place and that Cold Train plain ran out of money.
Mr. Larson: Just think if you understood that the Milwaukee Road didn’t effectively compete with the GN and NP because of its poor network and high cost operation: You wouldn’t have to keep making these posts!
It is indeed unfortunate that there exist self-appointed “experts” whose superior knowledge lead them off-topic and into the yard of ad hominem tracks. Of course, the lawsuit having cited “congestion” is not relevant.
The problem is that BNSF is monopoly in that particular cooridore. The BN merger should have allowed more protection for the Milwaukee road or if the Milwaukee was that uncompetitive never allowed the BN merger.
BNSF failed.
The whole matter of Milw. Rd. lines west continues to stimulate discussion, otherwise Trains Mag. would not have featured it recently. A couple of anecdotes, which will prove nothing:
during the first Milw. Rd. bankrupcy hearings in the 1920’s, at that time billed as the largest in history, Avery Rockefeller (yes Rock. money was behind the lines west effort, along with others such as Armour, etc. to break the Hill monopoly, and for whom was named Avery, a major division and transition point between steam/diesel and electric) testified at how the NP made every move to drive up the cost. Remember, the Milw. tried something very different in construction methods for the time, staging gangs and materal at numerous points along the ROW working simultaneously and thus totally depended upon the NP to deliver. Now, how does that differ from today’s oligarchic pricing?
Second, and this shows how a culture does not change over time: a presentation some years ago in Minnesota, the details are irrelevant, regarding a stone quarry with high quality material suitable for ballast, a long held family operation, was judged by the RR as inferior, which RR ceased to purchase the material, driving the compary under and forcing a sale. Guess who purchased the family business thus ruined?
Once again "it is all in the writing and the interpetation of the writing. I find it hard to believe that someone would say yes to a contract that forces them to ship a minimum of 95% of their “time sensative” product on a railroad that then says “we can guarentee time , route or delivery of your product”.