Reading about railroads here, in Trains Magazine and in other lesser informed places, it’s hard to get a gauge on North America’s railroad system. For every news article about expansion of some service or line there’s another discussing discontinuing a service or line. It reminds me of a building materials magazine I get. Page 1 lists all the expansions and new store openings. Page 2 lists all the bankruptcies and store closings. You’d think our industry is going full speed ahead jogging in place.
On the whole, is the railroad industry expanding or contracting right now? What do you think? In my little corner of the plains, railroading seems prosperous and expanding slowly.
Hard to ignore the reports of locomotives and rolling stock sitting in storage.
From my window on the world snug in the rust belt, the big boys increasingly appear to be pursuing a business model where they are specialists handling long distance thru freight, while prefering to spinoff more labor intensive operations to short lines and regionals.
Seems like I see far fewer trains in total than I did a dozen years ago, so anecdotally I would guess it’s contracting.
The Hunter Harrison critics have been liberal in chastizing CSX for (under his brief tenure) “chasing away” less lucrative customers as a form of cost reduction,.
I suspect all the big boys have been doing this in some form or another, although perhaps not as blatantly as CSX under Harrison. Probably more along the lines of expending very little effort towards growing business segments not alighned with their current priorities.
Yes…
Lets re-define what we are discussing here.
The track miles/new routes / abandoned routes.
And the employment ratio, followed by profit or loss.
So, I guess what I meant was new track is laid down a little more than the old track is taken up!
So in that respect, the industry has remained at almost a standstill.
Operating ratios have been going down for the past 30 years…
I would say that overall the railroads are expanding in my area (Western Canada). Sure some low-traffic branchlines have been abandoned but total traffic has skyrocketed.
It’s changing. Except when the damn government precluded it, the railroad network and its traffic have always been changing.
Some parts are declining, some parts are growing. That’s quite normal.
Intermodal is up, carload is down. There is a future in perishables, and a past in coal. There will be adjustments, AKA change, and change always upsets people.
Overall, I believe there is a good future. But people have to embrace and seek the future while letting go of the past. For some folks, that’s very hard to do.
The Sioux Falls/Sioux City area needs an intermodal terminal and good intermodal service. With that service rail in the area will survive and prosper.
Railroading is an expensive business. The railroads need to peer a bit farther down the tracks than most industries to figure out what the future looks like lest they wander down a dead end chasing the wrong goals.
UP seems to be crowded around Chicago, with business it can’t handle. We had a very busy day of train-watching Thursday that just happened to include an overview of Proviso: no place to put intermodal trailers anywhere (and a repo move arrived Proviso from the west–another railroad might call that a baretable move); 1200 cars in the receiving yard (it started getting plugged at about 800 when I was working there; no reason that aspect should change), the classification bowl looked full, though they were humping; and UP has offered prospective new-hires a $10,000 bonus if they are hired at Proviso. That I never saw before.
(I can’t…part of my Railroad Retirement agreement says I can never work for a railroad again.)
…But that’s about anyone 50 miles from home with a briefcase.[swg]
It’s all about status quo these days, but the activity in the urban areas related to non-common carrier light rail and commuter rail, and all the phony noise that goes with it, makes it appear that the entire rail world is expanding.
From personal experience, a very low OR and a relentless focus on reducing it further may not always be a good thing.
I have one account that allows me to cherry pick their good loads… So I do that and my OR with these guys is very low (for trucking anyway). And I’ve got another account that requires me to service all of their lanes… the good ones and not so good. Thus my OR with this second account is less than spectacular. BUT… looking at it from the customers’ standpoint… to whom am I more valuable… the one that allows me to cherry pick the good loads?.. or… the one for which I move everything? Obviously number 2. Number 1 could easily switch me out for another supplier while customer number 2 would have a much harder time finding someone else who can handle all of their diverse shipping needs. So the moral of the story is a low OR is good so long as the puruit of such does not lessen your overall value to the customer.
Bringing the above back to rail… cutting out alot of services and focussing on unit trains and trunk lines did reduce the railroads’ OR over the years, but from a customer’s perspective, rail is nolonger the diverse provider it once was. 50 years ago it would have been possible to send a boxcar from Boise, ID to Palmerston, ON… can’t do that anymore. And that’s just one example among many. Have we gone too far in pursuit of a low OR? Personally, I think we have… We cut a little too deep when we got rid of all those branches and secondary lines. Sure, some of them had to go… but not to the extent that it did.
There is a “wisdom” in the fire service that there are no experts within 100 miles of your firehouse. Of course, I’m 100 miles from someone’s firehouse, so I’m an expert there, if not in my own station…
That bonus is for other locations, too. I don’t know if it’s system wide or just the specific places where they are having problems hiring. I’ve been told that you don’t get the bonus all at once. You get it in pieces as you meet certain criteria. The last of it, being employed for one year. I don’t know if they mean a calendar year, or 12 months of service. I’m thinking the latter, because it they quit before finishing the year, they have to repay what’s already been paid out to them.
We had borrow-outs to a few areas where they were holding hiring sessions and getting one or two, sometimes none at all, including my area so I’ve heard. We have a new hire class this week, 37 is what I heard, plus one more of 15 for next month. All people that were furloughed have been recalled. The word is 6 out of 45 or so came back. Rules classes have been canceled for the next three months because of man power issues.
My sense is that North American freight railroading is in the midst of a profound transformation.
Traditional carload freight is, it seems to me, slowly dying. It fell more than 10% during the 2008/9 Great Recession. It fell another 10+ percent during the past few years, thanks to the coal decline. This is why railroads are closing hump yards.
Meanwhile, intermodal units have increased by half-again during the past 15 years or so, a period during which they surpassed standard carloads in number for the first time. The net effect has likely been a wash, or more likely an overall decline, for rail freight. Either way, railroads have lost, and continue to steadily lose, market share to trucks, especially on shorter hauls.
What will remain of today’s big railroads when this sea-change is complete? I don’t know, but I doubt it will be today’s status-quo.