The Chicago Tribune article at the link provides some background as to why railroads are not aggressively pursuing domestic intermodal traffic. The competition among 350 thousand independent owner/operators produces rates are at best marginally profitable. At the locations where inbound volume is greater than outbound, many are quite willing to take the back-haul loads for revenue well below their costs.
Of course, anybody has the right to do it, but investing $140,000 in a business that will only produce the rough equivalent of a $25,000 per year job with benefits certainly isn’t the most financially attractive occupation. And the hours?
Long Haul Trucking by Owner-Operators is a schizophrenic bujsiness; at best, it is a haven for individuals who have a level of anti-social behavior in their psyche, a business for loners and individuals who have burned out in other lines of work, escapists from the ‘normal’ world for whatever reasons.
The O-O has the lion’s share of the capital investment, he is leasing to a company who is using methods of pay( Rand-McNally/Household Movers Guide/ or a computerized mileage system) that will cut the pay for actual miles traveled, and fuel burned to something around a number of 12% to 15% less than driven. Systems that utilize mileages over roads in states that preclude the legal operation of some of today’s longer rigs (Pa is a big offender on this).
Work for a company who has plenty of freight, but requires a long deadhead to go pick it up, and then a scheduled for a run that may or may not be legally doable in the amount of time available. Loading at shippers who have no regard for the driver’s time, or investment. Their priority is their own, and it is up to the driver to deliver or his company is charged for a service failure. Too many of those and the driver and truck will be looking for another place for employment.
Driver is responsible for legal operation, but the scheule is often inflexible. Log books are know as funny books/comic books and a plethera of other derogatory terms. Dot checks can be expensive, and it is the owner operator who will pay and be responsible if by some chance the fine is on company equipment, because the driver is ultimately responsible for payment even if it is to come from a company, who generally is in no hurry to pay… Read driver pumps stomach acid while waiting.
O-O’s are generally a better cut of businessman, especially if they have been around for a while, they have been ‘had’ many times and can see situatiuons coming. It is the new guy who has gotten a windfall payment of some sor
I was a company driver for JB Hunt. I know somewhat of the workload of an independent, as I checked into doing that myself. Way, way too much work for the living. The only things I miss now about driving are the scenery and the rail yards. Although going into Corwith or 63rd street at 1 am in Chicago was as scary as it got.
Well, perhaps the reason railroads haven’t pursued this business is that they still of are the mindset that they would need to compete with the truckers for the domestic output, rather than realizing that all those truckers out there represent the real client base. Truckers are a potential gold mine of business for railroads - after all, beyond the short haul it is a lot less costly to move those OTR trailers by rail than by highway.
As long as the goods are delivered on time and everyone is paid on time, who cares how the trailer got from Point A to Point B?
BTW - Does anyone know if any railroad at all has tried to have a dialogue with Owner-Operators for the purpose of pursuing this business?
So, are you proposing that the railroads approach an independent trucker, and say:
Hey, guy, why dont you bring that load to one of a few localized terminals, (you may have to backtrack some to do this…)
We will put it on a piggy back and get it to the destination…we’ll even arrange for the delivery at the other end. All you have to do is bring it to us, and pay (up front) for the service.
Possible trucker answers:
Cool! But, uh, can you get it there by Friday? Do you have service to Podunk? Can I trust the guy on the other end to get it to the right place? (Even if all the truckers on the other end are trustworthy as far as the RailRoad is concerned, it is the reputation of the original guy in the cab on the line…)
I see the two biggest obstacle to this idea:
Limited localized terminals for loading and unloading. How much freight moves from one major metropolitan area to another, and how much is distributed in areas witout piggyback terminals?
but probably the more significant is
How much unused capacity is there? Is there enough to make it worth while to put the effort and resources into developing this market?
What a joke. The Class 1 railroads don’t seriously market to shippers of under 1,000 carloads annually. You expect them to market to a fragmented market of Owner Operators. Why not just market to the shippers and eliminate the middle man…
Most owner-operators own both the tractor and the trailer, so the railroads aren’t going to get very far with any of them because it’s highly unlikely that an independent owner-operator is going to trust a large part of his investment (the trailer) with somebody else. There is also no guarantee as to when he’ll get his trailer back, which he needs to earn a “living”.
Arrangements for the loads hauled by O/O’s are usually between the shipper and a broker or a trucking company. Only rarely does the trucker have a deal directly with the shipper, so even if the trucker wanted to do something with his load beside hauling it directly to the consignee, he would be going outside the contract for carriage.
A large percentage of “backhaul” loads probably move at rates that generate revenue that would be lower than the railroads variable cost for handling the load. Should the railroads raise grain rates to cross subsidize these loads?
Finally, even if the numbers were right, how does work? Easy enough for the O/O to get his load to the origin ramp, but how does he get himself and his tractor to the destination ramp to pick up the load without any cost? Beam me up, Scottie!
Drive on/drive off ramp service…pull the whole truck onto a flat, tie it down, driver settle in with a good book, after 1-2 days of self contained travel, drive off at the other end and deliver the load…
That’s suggested only half in Jest…I am guessing that OSHA would have a cow at the idea of drivers sitting in their rigs on a cross country trip on a flat cow…
But in Mexico, you can drive your RV onto a flat car, and visit the Copper River Conyon on a “rail safari”. Familys stay in the rigs while traveling on the rails…
And dont forget the Auto train from DC to DIsney Land… (Actually the suburbs of DC to the suburbs of orlando…and the passengers ride a coach in front of the autos…but the economics of that are such that its generally cheaper to fly and rent a car, depending on how much time you will be spending in the area!
But the biggest obsticale I can see is schedules and locations…
That is a sad but true story. And I can add some more insight to the story.
For the first 10 years of my adult life, I repaired trucks. And it would seem that everyday, one of my “buddies” (drivers for the trucking companies) would start about purchasing his own truck and quit his driving job. I would spend almost 2 hours a day trying to talk these guys out of this absurd idea of being “my own boss”. But it never failed to amaze me how a man could go from earning $30,000 a year driving for a national company to being bankrupt being an O/O leased to the same company.
Man, I would show them the repair bill that thier companys were paying…Didn’t phase them.
I would show them how much tires cost…They didn’t believe me.
That brand new Kenworth W900L that they signed a lease for gets about 4.5 MPG with the King of the Hill Catepillar…A far cry from their fuel sipping Detroit series 60 in a lightweight Freightliner Century. They didn’t believe me.
I hated to see these good honest guys sign for lease on thaose shiny new trucks, but hey…I didn’t listen to my elders either.
So I guess it is a truly lose-lose situation for these guys. Trains move it cheaper. JB Hunt is cheaper. What are these guys going to do? I don’t know.
At least I’m thankful that I was always on the service side of the trucking industry. I just felt bad sometimes telling a guy to fork over his entire 3 month’s profits for a repair…But hey, I have a family too.
Both Austria and Switzerland. But that’s a different culture with different laws, values, etc. The biggest difference is that the trucking is primarily overhead between Italy and France/Germany, and the high costs of this practice thus are borne by consumers in THOSE countries, not Austria and Switzerland.
Congrats, Murphy! You actually figured out my line of thought, while the others were stuck in Status Quoville.
How you approach this is from the O-O’s perspective: How much will it cost to deliver my load over the highway, vs being ferried by rail? Remember, those O-O’s are being paid by the mile, and correct me if I’m wrong but those miles are not necessarily odometer miles on the truck but rather the shortest highway distance between two points. If one can ride on a flat car, you’re not using up tire tread, you’re not using up your 11 hours of driving time, you’re not using fuel from your own rig, etc. Yeah, OSHA would have a fit if the drivers just camped out in their rig, so you might have to add a passenger car to the mix, but so what? These drivers wouldn’t be all that picky about accomodations as long as they have a bed, cheap food, and a laptop port. Either that, or fly them to their intended
i think if the railroads shipped to a “BIG” terminal located close to every big city . then that termainl would ship to the smaller terminals within a lets say 250 mile radi from the big terminal if the goods need to be sent to a market closer to the big termail the big terminal would also have box trucks for there local delivery .and then the smaller terminal has smaller box trucks ship to the stores around the citys and towns. and the big terminals would also act as storage so when the stock got low in the small terminals they could just order it for the next shipmet out of the big main terminals.
this way the railroads would have full car loads to the big terminal
the truckers would have work driveing to the smaller terminals and smaller terminals that would use box trucks keep the bigger truck and trallers out of citys and only on the highways and it also may cut down on drivers driveing over there time
When I was with IH/Navistar we figured an O/O or small trucking company operated at around a 10% cost disadvantage compared to the large fleets. That’s greater than the margin on most truckload frieght.
The big guys could get deals. They’d hammer the price down on a 9670 (the preferred power unit for Schneider and Hunt at the time) then they’d get side deals from the component suppliers. Cummins would sweeten the deal and so would Eaton so they’d be specified components. Then the tire manufacturers would fight it out to see which one would would be original equipment on the new fleet tractors.
The small guys got none of this. No wonder they’re poor. You can’t run at a 10% cost disadvantage. That would be more than they could clear on the loads.
After I left IH, it got so bad that they gave up supplying Hunt and Schneider with power. Those company fleets were basically 100% IH and eventually IH (the new Navistar) just decided to let the production volume go. It made no sense to “cross subsidize” a customer, no matter how much he bought.
in 1998/9 CSX did a study with some trucking/container company about re-vamping the bent rail and buckling ties that is New Buffalo Yard into a intermodle terminal for those very reason…close to major city gooooood rail access [#dots] good freeway/tollroad access …but in usual CSX fashion after months and millions it was deemed “unprofitable”
Are you telling me that the idea of putting the whole rig-tractor, trailer and driver-on a flat car wasn’t originated by the posters on this forum?
1435mm noted that there are very different cultures with different values and laws in the European countries where this service is used. If you want a better insight to the differences check the featured articles on this site: