A lumber broker we buy cars of lumber from sent out this notice to all their customers:
“A number of Canadian mills who ship into the US on the CN RR have been told they will no longer (for the time being) be able to ship to “Low-Velocity” destinations – like those in ND, SD, IA and NE – because (according CN) it takes too long to get cars into and out of those destinations. “
Huh? Aren’t the railroads kind of in charge of how long it takes to get cars in and out of an area? And just exactly what is a “Low-Velocity” destination? If we decide that some states are low velocity destinations, can we quit shipping them corn, wheat and soy beans?
The term “Low Velocity” is one of those that can be wheeled about and ‘dumped out’ wherever the party who is designating velocity wants it used…I would say the definition is most likely unspecified, over a long period of useage; depending on who, and why they are using it. It is generally common thought that the Class1’s want long length of haul to gain the most $$$$ for their operations and costs.
Norris (Murphy Siding): Some time back, you posted a stiory about a car load of lumber that kept passing your facility over a period of a number of days. You mentioned it, seemed to miss the local that would have dropped it off. The next time you saw it going back on a through freight, to be brought back by the local; because of traffic the local could not get track time to use the switch to get in to your lumber yard…It seemed to be a situation that the car was never in the ‘proper’ position on the railroad to make the local and the drop into your p
First consider the source. Is it possible he is not telling you exacty what CN said?
When I was clerking on the GN in the late 1960’s we billed many “rollers”. These were cars to end of branch line destinations where there was an interchange to someone else’s branch line. The one I remember to this day was Huron SD to CNW.
After partial dereglation in 1980 many, if not all, of these slow ball were closed as through routes. Now rates were higher combination rates, which curtailed the ability of the lumber brokers to use rail cars as free warehouses.
You would have a better idea than I do about current situation regarding diversion in route cars.
I tend to think there is more to the story than your broker is telling you.
The demurrage rate (daily car rent) is supposed to be more or less compensatory. So why would CN care how long the cars are gone, as long as it’s getting paid for them ? (There are legitimate responses to that, though.)
Does it matter if the cars are leased vs. owned by CN ? Again, if they’re leased, why would CN care ? That’s up to the lessee to be concerned about the ‘low velocity’.
Likewise for the value of and interest, etc. on the freight, as Sam alludes to above. That’s for the seller and buyer to allocate between them - why should the railroad care ?
What kind of cars ? Are they something which might be scarce, and CN wants to use them for traffic with a shorter turn-around time, so it can get more paying loads per year with them ?
Could this be a back-door attempt to abandon or embargo thiose branches - or to justify abandoning them, with the resulting lower traffic levels ?
OK- Now we know why the lumber yard in Beloit, to this day, does such a thriving business. The only railroad in town is Kyle(G&W), former owners UP/KP and MoP gave up on the branches long ago.
Mac, thanks for correcting/ clarifying my post above - you’re quite right (I was in too much of a hurry this morning to think clearly before I had to leave). And you say better what I was trying to say: “The point is car hire, and the cost of car hire [is] imbedded in the freight rate”.
So the serving railroad is being actually compensated for whatever car hire costs are incurred (either implied to itself, or actual to the car owner). As such, the car owner - and the serving railroad - have no cause to complain about any delays on that branch line, because they’re getting paid for the car hire, one way or the other.
The only possible gripe that the serving railroad may have is that after the shipper/ receiver releases the car and the demurrage charges stop as a result, the slow or infrequent service on the line may cause the railroad to incur car hire costs that are no longer being compensated by the then-ended demurrage charge. But that slow/ infrequent service is caused by the serving railroad, so it has no cause to complain, nor to blame or punish the shipper/ receiver for the railroad’s own inaction.
All that said, this morning (0910 EDT) I was able to take a brief look at a short NS train of abou 15 cars and 2 locos (both short hoods facing towards the rear, so the lead one was long hood forward!). So likely it was a local, and geographic southbound on the Lehigh Line, being held out just north of the Allentown Yard at CP HAM.
Anyway this train had all 3 types of cars commonly used to haul lumber products in its consist
Car hire cost is like gravity, it is always there. Shippers do NOT lease TTX or RBOX cars for private use in the normal course of business. TTX is owned by the several class I railroads. Whichever line has the car in its car hire acounts (think possession) must pay TTX car hire, both time and mileage. It is in the freight rate. To come back to our CN lumber case CN either supplies the car and incurrs ownership and maintenance costs OR uses a foreign (including TTX) car and pays car hire. Assuming cars of equal age and value, the CN incurs the same car hire cost with TTX cars as with its own.
The classic case of shipper supplied cars are tank cars. The classic arrangement here is that the shipper (Dow Chemical) leases cars for Trimethyl death service from a fleet operator, GATX, UTLX et al. Since cars for trimethyl death are specialized, GATX will insist on a lease rate that pays for the cars, after operating costs, in about 15 years. If the car costs $90,000 lease rate will be something i
I’m not sure I can clarify much. I never pay attention to whose cars the lumber comes on. I know that a majority of our lumber cars comes into the USA at the top of Minnesota. CN may originate the cars, but BNSF delivers them into South Dakota. BNSF is who would be charging us demurrage if we kept them too long. BNSF now counts weekends when figuring demurrage. I dont’ know if they count holidays but they probably do.
Does CN charge BNSF something for keeping a car too long, or does that depend on who the owner of the car is?
Demurage is between the serving carrier and the shipper or consignee.
Demurage cares not who the car owner is, given railroad ownership(railroad and TTX owned cars) because the spotting road, BNSF in this case, is either paying car hire to whatever foreign railroad owns the car OR is incurring ownership and maintenance cost for its own equipment.
Assuming a CN car, CN started earning car hire when it interchanged to car off to the BNSF and BNSF will pay car hire until it gets rid of the car, in this particular case probably by reverse route over the oncoming junction. Car hire is now figured on an hourly basis and has a mileage component.
A lumber broker we buy cars of lumber from sent out this notice to all their customers:
“A number of Canadian mills who ship into the US on the CN RR have been told they will no longer (for the time being) be able to ship to “Low-Velocity” destinations – like those in ND, SD, IA and NE – because (according CN) it takes too long to get cars into and out of those destinations. “
Huh? Aren’t the railroads kind of in charge of how long it takes to get cars in and out of an area? And just exactly what is a “Low-Velocity” destination? If we decide that some states are low velocity destinations, can we quit shipping them corn, wheat and soy beans?
The term “Low Velocity” is one of those that can be wheeled about and ‘dumped out’ wherever the party who is designating velocity wants it used…I would say the definition is most likely unspecified, over a long period of useage; depending on who, and why they are using it. It is generally common thought that the Class1’s want long length of haul to gain the most $$$$ for their operations and costs.
Norris (Murphy Siding): Some time back, you posted a stiory about a car load of lumber that kept passing your facility over a period of a number of days. You mentioned it, seemed to miss the local that would have dropped it off. The next time you saw it going back on a through freight, to be brought back by the local; because of traffic the local could not get track time to use the switch to get in to your lumber yard…It seemed to be a situation that the car was never in the
My late aunt worked for a lumber wholesaler. Were she still with us, I’m sure I could come up with dozens of stories - traffic management is what she did…
Of course, that’s back when there were still dozens of Class 1’s…
For what it’s worth, we got in a car yesterday. It was on a rusty, old spine car, reporting marks TTZX….
It came to us off the BNSF low velocity main line that has a 10 mph or such slow order on it right now.[:-,] We released the car 15 hours after it was spotted. Now it’s up to BNSF to high-velocity that car out of here and back to CN so they can high-velocity it back to Canada.[:P]
A lumber broker we buy cars of lumber from sent out this notice to all their customers:
“A number of Canadian mills who ship into the US on the CN RR have been told they will no longer (for the time being) be able to ship to “Low-Velocity” destinations – like those in ND, SD, IA and NE – because (according CN) it takes too long to get cars into and out of those destinations. “
Huh? Aren’t the railroads kind of in charge of how long it takes to get cars in and out of an area? And just exactly what is a “Low-Velocity” destination? If we decide that some states are low velocity destinations, can we quit shipping them corn, wheat and soy beans?
The term “Low Velocity” is one of those that can be wheeled about and ‘dumped out’ wherever the party who is designating velocity wants it used…I would say the definition is most likely unspecified, over a long period of useage; depending on who, and why they are using it. It is generally common thought that the Class1’s want long length of haul to gain the most $$$$ for their operations and costs.
Norris (Murphy Siding): Some time back, you posted a stiory about a car load of lumber that kept passing your facility over a period of a number of days. You mentioned it, seemed to miss the local that would have dropped it off. The next time you saw it going back on a through freight, to be brought back by the local; because of traffic the local could not get track time to use the
A carload of unsold lumber would be loaded and headed east to a fictitious consignee and destination that it was never going to get to. The shipper controlled the routing. And such shippers wanted slow “Rollers” so they had time to sell the load. They’d intintionally use inefficient routes, increasing the railroads’ cost, to add transit time.
But.
As soon as the load was sold they’d “reconsign” the car while in transit. That is, they’d change the consignee and destination to the real buyer of the lumber. After such a sale they’d insist that the car was “hot” and want it expidited. The car could be sitting in Oshkosh, Nebraska and they’d want it in New Jersey yesterday. They didn’t get paid until the lumber was delivered.
The “rollers” may have been responsible for how long the railcar ferry kept operating across the Mackinac Strait in Michigan. By the time I saw it back in 1978 I understand the Chief Wawatam only sailed once a week, and the cars being loaded appeared to be lumber boxes. All gone now, of course.
You might be right. I remember reading in TRAINS that Michigan Northern (the ex-PRR line to Mackinaw City) flagged out of a rate increase which generated extra traffic, including some overhead traffic. I wouldn’t be too surprised if most of the overhead traffic was lumber rollers.
Another thing that has changed is the billing. I can tell when a carload of lumber left the mill. I get a bill the next day. Generally there’s a prompt pay disocunt, so most lumber is paid for before it hits my dock. Life in the fast lane!