https://www.wsj.com/articles/americas-boxcar-pool-has-a-leak-in-csx-1528632000
Yep - cut car hire costs and let the customer suffer - that’s the ticket!
Time to bring back the per diem Boxcars of the early 1980’s? At least they added some color to manifest trains if not colorful railroad names painted on the sides.
So much for “next load, any road”!
If the business you don’t want won’t go away because of poor service, go to plan B. Make it harder to get cars.
Jeff
Just more evidence that merchandise traffic is boutique business.
The WSJ article is not clear about what is actually happening. I looks like CSX is withdrawing a few hundred cars from a free running pool to assign them to specific origins, presumably on CSX and perhaps there limited to high CSX revenue destinations. That should protect CSX customers and be welcomed by them.
After the reporter got through with one shipper’s complaint I am still confused.
A totally incompetent piece of reporting.
Mac
Internation Paper ships to numerous locations around the country - some on CSX and many not. As I piece the article together - if a CSX car gets shipped from IP at Savannah to a destination that is not on CSX; CSX will charge them $2K for the ‘mistake’, inspite of the fact that CSX does participate in the line haul division of the freight charges.
I agree the article is poorly stated.
They claim to capture the cars to use them to better serve their customers, but only one customer is getting better served- the scrapper. There’s a line of perfectly good boxcars being cut up right now where I work at, and just put 5 more in there today. Also cutting up CSX rock hoppers too. Guess everything not nailed down is for sale.
CSX is trying to manage its assets for the greatest profit. That’s exactly what they should be doing. They don’t owe anyone a boxcar. If an IP shipment doesn’t move the needle toward a CSX gain then CSX should either withdraw from the business or increase their charges.
What’s a CSX gain? That’s hard to say because determining the cost of individual rail shipments is a can of worms.
But, in over 180 years of railroading no one in the world has been able to make traditional carload service work. What do I mean by “Work”? I mean providing a service a customer will pay enough for to make the railroad financially viable. Now, there are niches. Chemical shippers pay through the nose, and they do complain about that. But, they generally lease or own the rail cars, and the railroads seem to be content with the money. Boxcars, not so much.
That’s why traditional boxcar business is going the way of the dodo bird.
You can use boxcars in intermodal type service and make a buck. But using boxcars in traditional carload service is a looser.
Loose carload traffic seemed to do a pretty good job sustaining many railroads for many years early on. Maybe that was only because it was like Churchill’s proverbial democracy (the worst except for all the others) but it still happened.
Today the remaining carload traffic still works for its customers and returns a profit to the railroads, if it didn’t it would not exist in today’s de-regulation world. And you are right about niches, a relevant example is that most (~80% IIRC) remaining boxcar traffic is forest products.
Boxcars still make sense to someone, TTX has continued to buy new ones and CN just ordered 350 for themselves.
Loose car railroading worked when the only alternative was a team and wagon. But that’s changed.
Again, in 180 years of railroading no one in the world has figured out how to make it an efficient, reliable system of transportation. But it was better than a team and wagon.
There are niches, but 350 cars is what? Maybe 12 loads per day.
Carload’s niche (and it is still a pretty big one) is non-perishable commodities that move in large enough quantities over long enough distances to make trucking or intermodal moves impractical, but also do not move in large enough shipments to justify unit train operation.
The remaining carload shippers do indeed gripe and complain, but it seems that even terrible rail service is a better (cheaper) alternative than trucking for this niche. If the alternatives were better I am sure that the shippers would be using them instead.
I am not trying to make excuses for or justify the poor reliablility of rail service, rather I think steps should be taken to improve reliablility and customer service, as opposed to blunt cost-cutting and extra charges in pursuit of some financial target.
And yes, 350 boxcars will be lost in the sea of our rail system, but I wanted to provide a contrast to the scrapping RockyMidland mentioned. And they will not be alone, in addition to the new TTX cars CP boxcars have recently become a common sight in CN trains, they were almost never seen on our rails until about a year ago. No idea if CN is leasing them or if CP released them into the general boxcar pool, but it is still more boxcars on our trains (CP’s loss, CN’s gain?).
I am not saying that this is a big revolution or sea change, but carload traffic (even boxcars) is not nearly as dead as everyone seems to think, and still supports (by itself) several key branch line routes out my way.
Numerous shortlines remain entirely supported by carload traffic too.
Greyhounds there are some loads from International Paper that we in the OTR industry can not even freaking HAUL they are to large and heavy for our trailers. IP has rules as to how old a trailer can be to even go into the plant why their larger rolls of paper tend to break trailers in half if those rules are not followed with the current plate sided construction methods. Yes your reading that right they will literally break the trailer in half with one roll of paper. You can not ship paper via a flatbed if it gets wet it is useless for the final customer so it has to go in a van or a boxcar. The largest rolls that they ship are in the 20 ton range in railroad cars. My late FIL used to haul rolls in the 10 ton range out of a plant in Florance Alabama all the time to other plants were they were cut into finished sheets. They would load 2 rolls into the trailer one at the nose block it in then the other at the 40 foot mark inside the trailer according to what he told me before he died. The master roll those rolls where cut from weighs 35 tons each. So learn the commidty before you say you can ship all paper goods out in trailers or IM containers.
So you learn to understand what you read.
I have repeatedly written that there are niches for carload freight. It’s obvious that a role of paper too heavy for a truck is one of those niches.
I try to avoid using terms such as “All”, “Always”, “Never”, etc. because there are exceptions. Overwhelmingly, boxcar carload freight just doesn’t meet today’s market demand. But, as I clearly said, there are niches for such service.
I rarely see any reason to question your comments, but I feel there may be room for debate here. For a good many of those 180 years various management tools that came with increasingly powerful computer systems were not available. Only recently has the plague of interchanging a shipment between railroads multiple times been reduced to perhaps one as the mergers took place. Then there was the regulatory insanity that I believe prevented charging more if the customer wanted more personalized service, such as delivery to his own siding rather than a team track. That all created a mindset that favored reducing costs rather than encouraging business.
I have long held that the philosophy of holding three units and 70 cars of freight for 12 hours because a minimum of 80 cars is required to run the train was counter productive. That longer freight is more efficient, agreed, but the use of resources is not. And of course the resulting missed connections made the overall system hopelessly inefficient and the customers fled to the highways. That eliminated the potential economies of scale that are needed to maintain loose carload railroading as more than a niche product.
I fully agree. “Hold for tonnage” is a wasteful, inefficient way to operate a railroad. A system schedule is actually the railroad’s profit plan. It’s a plan for the use of assets and crews, the plan for your service offerings, and it’s the first step in quality control. The employees can’t produce service to a standard if they don’t know what the standard is.
But that’s not the problem with traditional carload reliability. The reliability problem comes from the number of “Events” a carload shipment must go through to travel from the shipper to the receiver. i.e., The car must be picked up by a local or industry job, switched in to the right block, picked up by the right train, moved to another yard, switched in to another block, placed in the right train…(it goes on)
Each of these events has a probability of failure. And one such failure throws the shipment off schedule. Multiple failures really mess things up. Since there is no perfection, this makes the transit times erratic. Good management can make improvements by reducing the probabilities of failure, but they cannot achieve perfection by making those probabilities zero.
A real advantage of truckload is that it has fewer “Events”, opportunities for service failure. This makes it more reliable than carload. Intermodal also bypasses many of the events and can be truck competitive.
If in 180 years no one has figured out how to make traditional carloads work than railroads would not exist. I have in previous and current roles handle several carloads on a weekl
I can tell you this much for what my boss paid in shipping and switch charges for 2017 was enough to pay for the locals that ran them to us.
Short term, or long term?
Not even cusotmers they have contracts with?
I just think of the often used quote:
“A hell of a way to run a railroad.”