Certainly this is sensible enough - actually, really smart - from an economic and efficiency perspective, to avoid waste and under-utilized assets, etc.
But if there’s a customer, regulator, or reporter looking to make trouble, be advised that there’s at least a potential anti-trust vulnerability here: making deals with ostensible competitors over splitting a customer’s business, and possibly the rates as well. Example: “You want to explain why the rate for that shipment which you let your competitor handle was $500, whereas your rate is usually $400”, or “Why was your rate $500, but his rate is usually $400 ?”
I think that essentially we have seen a subtantial amount of “re-gauging” in North America with the numerous projects to increase clearances for doublestacks and autoracks not to mention track improvements for the newer 286,000 lb. cars. In practical terms this is a larger loading gauge on much of the network. Compare modern freight equipment to what was common even in the 1970’s and you will see my point…
The channel Tunnel trains are 14’ wide, that is somewhat more then a “slight enlargement” of the UIC B gauge. They are also very tall, but not quite the 20’ of double stacks. The high voltage overhead wire is just bareley above the roof. And in Sweden they have big loading gauges too. Passenger trains there are over one foot wider then North American passenger trains are and can travel at 125 mph, with higher speeds planned in the future. My point is that standard gauge rail technolagy is not limited to the way things are done. A 20’ tall freight car might have a similar center of gravity then a 14’ wide car, depending on the designs.
You are referring to the Freight Shuttles used to ferry truck traffic through the tunnel, they cannot operate past Dollands Moor on the British Side. I thought that you were referring to the new line that runs from the Channel Tunnel through to St. Pancras Station, that is the line built to GB+ gauge. Clearances within the tunnel and for a very short distance on either side were built much larger so that the Freight Shuttles could carry full size trucks without resorting to the special low-floor, mini-wheeled wagons used for Rolling Highway services on the Continent, which are totally unsuited for the 140 kph (87 mph) required in the Tunnel so as not to use an encessive amount of track capacity.
I think there’s more than a grain of truth in this.
I was on a conference call with a marketing director at another railroad trying to pitch a similar proposal on non-meat perishables. We pointed out that there were over 100 loads per day being generated proximate to that railroad and moving very long distances by truck, 2,000 miles +, to areas that could be served by his trains.
At that point I felt he became very defensive and began ratteling off information about their efforts to develop temperature controlled business and denying/questioning whether the subject traffic actually existed. It exists. It’s been there for decades. It moved by rail at one time.
I’ve just stumbled across this fascinating and entertaining discussion. As someone who spent 15 years in the intermodal business with ATSF and CN, and collected quite a few burn scars trying to put together creative ideas to get trucks off the road, perhaps I can add a few relevent observations.
The discussion on costs (rail linehaul, drayage, etc.) here are pretty thorough and accurate, but one critical element hasn’t been brought up: balance and repositioning. In my experience, this is the critical reason why high-volume opportunities outside of major metropolitan areas (such as the beef moves out of western KS cited here earlier) remain with truck. There may be lots of freight coming out of a concentrated rural area, but there’s usually not a corresponding inbound flow that allows the railroad to get load/load efficiency. I could write a chapter of a book here on how truckers have much more opportunity and flexibility to pursue this sort of business without incurring a high empty repositioning cost. Suffice to say that they can triangulate and circulate; they can get a 750-mile headhaul load into Denver, then work a couple of 150 or even 75-mile loads going back out (say from the Denver regional DC to a local grocery store), and work their way close to the beef opportunity, running relatively few empty miles. They can also do this on any scale that works for them: 1 or drivers working the route, or 10-20. Intermodal just can’t do this competitively. Better to go after that sort of business with a boxcar product that has such huge linehaul cost advantage it can absorb a high empty repositioning factor. But for some reason, boxcars just can’t seem to move as quickly/reliably as intermodal. Is this cultural, or are there good operating reasons? Fodder for another thread.
CP Expressway: there’s profit, and then there’s contribution, i.e. are we better off with or wit
And thanks for those apt observatons and insights, too.
Funny, isn’t it - for all the supposedly maturity and ‘number-crunching’ rationality of this market and the ‘players’ in it, how random, chaotic, and ad hoc certain aspects of it turn out to be ?
I’ve just stumbled across this fascinating and entertaining discussion. As someone who spent 15 years in the intermodal business with ATSF and CN, and collected quite a few burn scars trying to put together creative ideas to get trucks off the road, perhaps I can add a few relevent observations.
The discussion on costs (rail linehaul, drayage, etc.) here are pretty thorough and accurate, but one critical element hasn’t been brought up: balance and repositioning. In my experience, this is the critical reason why high-volume opportunities outside of major metropolitan areas (such as the beef moves out of western KS cited here earlier) remain with truck. There may be lots of freight coming out of a concentrated rural area, but there’s usually not a corresponding inbound flow that allows the railroad to get load/load efficiency. I could write a chapter of a book here on how truckers have much more opportunity and flexibility to pursue this sort of business without incurring a high empty repositioning cost. Suffice to say that they can triangulate and circulate; they can get a 750-mile headhaul load into Denver, then work a couple of 150 or even 75-mile loads going back out (say from the Denver regional DC to a local grocery store), and work their way close to the beef opportunity, running relatively few empty miles. They can also do this on any scale that works for them: 1 or drivers working the route, or 10-20. Intermodal just can’t do this competitively. Better to go after that sort of business with a boxcar product that has such huge linehaul cost advantage it can absorb a high empty repositioning factor. But for some reason, boxcars just can’t seem to move as quickly/reliably as intermodal. Is this cultural, or are there good operating reasons? Fodder for another thread.
CP Expressway: there’s profit, and then there’s contribution, i.e. are we better off with or without it
OK, but if the rail intermodal operation is not marketed directly to shippers - but instead is a partner or sub-contractor to the truckers - then the railroad is somewhat insulated from this dilemma, which then remains more of the trucker’s marketing problem than the railroad’s. Any fraction of the available traffic that looks like the long-haul return move - maybe even the emptie
I don’t know what happened to the Chiquitas after I left. I ran into Dick Boteroff some years after I had resigned. Dick was Director of Intermodal Marketing and Sales. He knew I had been very interested in this business and mentiioned that they were handling bananas. So the giant herbs (they’re not a fruit, they’re a “Giant Herb”) moved by rail intermodal years after I left.
If I had to guess, I’d guess that you put your finger on the reason bananas left the railroad (again) in an earlier post. It’s hard to get all the seperate departments in a railroad bureaucracy pulling in the same direction. Each little fiefdom has its own seperate goals and if they suboptimize the results for the firm they don’t realize it. (Or care about it.)
Our freight claims people were particularly bad. They fought developing the banana business tooth and nail. (I’d even say they did their level best to drive it off after we got it.) The fact is that when a railroad accepts a load of freight for movement it assumes a risk of buying the load. If a car of furniture is wrecked, the railroad is going to pay for the furniture. The railroad effectively acts as an insurance carrier as well as a freight carrier.
If you hold yourself out to additionally protect the temperature of the load you increase your risk. There’s nothing wrong with that, as long as you get paid for it. (It cost more to insure a home in Florida than it does in Wisconsin because there’s more risk in Florida. A Floirda homeowner can buy insuance, but he’s going to pay more for it because the carrier is assuming a greater risk.) The freight claims people didn’t have this risk/reward mind set. They only looked at the risk. Getting the bananas on the railroa
CO and KS are indeed imbalanced with alot more freight (at least general freight) in than out. My own way of dealing with that is simple: I price my services HIGH going in to compensate for the likelihood of having to come out empty. Thus my rates going in are high…and one side benefit of that is that I know exactly WHY those customers use me for those loads…and it ain’t because I’m the cheapest! And I price it HIGH on the outbound too…the market be damned. The way I see it…someone has to have highest price with big juicy margins…and that someone may as well be me.
‘‘Geez, Kneiling, you’re gonna schedule this thing right down to the day, aren’t ya ?’’
Thanks for sharing, greyhounds - these are all interesting ‘war stories’, and they ring true and illustrate the challenges better than a ‘textbook’ approach or any other method. We hope that ‘it’s a different world’ now, and maybe it is in a lot of places and ways, but it seems there’s still a lot of work to be done. [sigh]
I also really liked your analysis of the risk/ reward of the claims exposure, pricing it, etc. - all very well said, on those ‘giant herbs’ !
Request for minor clarificationin the following quote: ‘‘We couldn’t load 80 reefer containes a week southbound and we told them that. They’d have to pay for the round trip. The concept was to run two 20 car trains round trip per week between Gulfport and Jackson, MS.’’
Two 20 car trains round trip per week = 40 cars per week, not 80 - are am I misunderstanding something here