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
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.
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 o
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.
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
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
Check out the Transportation Community on AOL.Here the truckers talk about RR’S.
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.)
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
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
**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!!
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,
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.
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
Do you think truck line cooperate with each other? Guest again.
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.
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.
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
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.
Hey Larry, I got some brooms for sale, real cheap. A whole lot of them…