Try this one. http://www.marketwatch.com/story/shortage-of-railroad-boxcars-has-shippers-fuming-2015-06-21
I’m not a subscriber to the WSJ, but the wsj link works for me.
Jeff
There are two facts in play:
Railroads trains are a batch operation.
Carload shipments are not.
So, you have to create batches. You do this by building blocks in classification yards.
The way to the highest car velocity is through minimizing the number of classifications you have to make during the trip. Railroad work hard at this all the time, figuring out blocking definitions and train plans that minimize classification work and minimize circuity.
The goal is the best result for the entire network. Some individual trips will look really goofy, but they occur because so many other trips are helped.
For large volumes, flat switching is more costly than operating a hump yard. That said, hump yards are elaborate, expensive pieces of infrastructure. You don’t want to own more than you need. You generally put them where you have traffic nodes with large volumes going in several directions. Conrail used to have one in each corner and one in the middle of the “Big X”. Bailey on the UP is at the center of the large “X” of the original UP. Bellevue on the NS is a hub for northern part of the whole RR.
In 185 years of railroading no one in the world has figured out how to do this. The slow, erratic movement of carload freight is an inherent characteristic of such shipments.
So, mostly things that cube out before they weigh out? What has more volume; a hi-cube boxcar or two doublestacked 48’ containers? I understand that there are markets for boxcars but could some loads be transferred to intermodal units?
As to volume, it would depend on how tall and how long the boxcar is…
The 85 feet high cube would obviously have more volume than two 48 feet containers, even 9’6" high containers.
The actual size of the items being carried is important. You might be able to stack items two or three high in a boxcar and not in a container.
Specialised Container Transport in Australia have recently built more than 100 very high cube boxcars, 75 feet long and nearly as tall as a double stack container well car.
These are understood to be used for things like breakfast cereal and furniture.
M636C
Years ago I had a friend who made extra cash by unloading box cars full of lumber at a local lumberyard. They would get so jumbled in transit it could take climbing in on top of the load to untangle it and unload it. End loading of a container might solve that problem.
True; I understand that this is why the majority of large paper rolls are shipped in boxcars. I think that almost all the 85ft hi-cubes are for auto parts (I see paper mostly shipped in the 60ft variety) but there is no reason why they could not be adapted for other freight. What is cheapest will prevail.
For the curious, SCT boxcars can be seen here, note the well cars for size comparison and the standard boxes behind the taller cars. These boxes are for unit train service and not for carload freight, as M636C was kind enough to explain to me a few weeks ago. Thanks again!
My prediction about the paper loads. If they (paper companies) decide to switch away from box cars, they are going to load trailers and not containers. Very few of those loads will ever go by rail again if that happens. I think that most of the loaded moves will not be long enough to interest some of the railroads in retaining that business using intermodal equipment.
On a related note, the Des Moines Register used to have a special sports edition once a week printed on peach colored newsprint. They received the paper by box car, like all the rest of their newsprint at that time. The service got so bad they discontinued that edition, just printing on regular newsprint. Eventually they discontinued receiving by rail altogether, building a new plant without rail access.
I hope I’m wrong. With other threads about the decline of the low hanging fruit (coal), the railroads should be thinking about how to get more business. Maybe retain what they do have. I’m not sure some of them are up to that challenge. They have gotten so used to 100+ car trains going a 1000 miles, that anything that doesn’t fit that mold is not on their radar.
Jeff
Great points Jeff…with the decline of coal the railroads do need to look at other options… maintaining or improving service to the paper industry would be one. Another might be targetting certain shorthaul business that might work on rail. The conventional wisdom is that rail isn’t competitive on shorthauls under 500 miles, yet that is where 70% of all freight moves. If the railroads could somehow tap into that market then that would go a long way to making up for the shortfall in coal. Railroads also need to get away from the “conveyor on rails” mentality and upsell the customer on services such as consolidation and distribution: focus on first mile/last mile services and working directly with shippers/manufacturers. At present the railroads outsource the consolidation/distribution to third parties who effectively cream off a disproportionate amount of the profit with nothing or very little invested in infrastructure. Ideally a little shipper like a 10 person metal shop in Denver, CO (for example) should be able to call Union Pacific directly… UP would then send in one of their own trucks for pickup and send it off to a UP service center for consolidation with other shipments. Now all that is done by outsiders who then hire UP as the low cost conveyor belt. The railroaders need to go back to taking ownership of the entire transportation supply chain, from initial sale to delivery of the goods… instead of just being the go between as they are now.
If I’m reading Ulrich’s post properly, he appears to be suggesting that the railroads need to get back into the LCL business. I’m not sure that would be the wisest allocation of assets, that sort of business is labor-intensive and was lost to trucking decades ago.
Unfortunately (for the rails), the last three comments are probably true. The railroads lack the marketing expertise and have labor costs that make them uncompetitive for LCL for many years. It’s questionable whether they can even handle LTL unless it is in trailers and containers.
I was fortunate to attend June 25th Sandhouse Gang presentation which featured Ed Ellis (Iowa Pacific). His presentation was entitled “Restricting Signals Ahead” and discussed the pessamistic aspect of the railroading industry, primarily the downward spiral of coal.
Energy revenue (coal, oil, etc) is about 50% of industry revenues…and slipping. As we have discussed on the UP thread, coal is down 17% YTD with continued declines seemingly inevitable.
Ed’s solution for arresting the declines and adding revenues include:
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Short haul business.
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Utilizing the carload network (paper loads in boxcars would fit this description).
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Passenger trains.
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Transportation of food…boxed beef was mentioned and I smiled to myself thinking of Greyhound (a Northwestern grad BTW).
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Intermodal growth instead of the major points, develop intermediate markets. Again, I thought of Greyhound.
It was a very sobering presentation. Just think…less than a year ago we were wringing our hands about the need for capacity. How quickly the trend has shifted.
BTW, I will be making a trip out west and plan on going to Bailey yard and paralleling US 30 in Nebraska for awhile. It will be interesting to see how many coal trains are running.
Ed
That is what I’m suggesting CSSH. Thanks to advances in technology the LCL biz isn’t as labor intensive as it once was; in any event the railroads are now in the LCL business anyway… only difference is that right now the setup is such that other third party vendors handle the LCL consolidation/distribution function and then hand off the linehaul to the railroads. THE consolidation/distribbution is the hard part…
To your point about keeping Boxcars moving: When the railroads were actually in the LCL Business [operated their own ‘cross dock’ freight houses and their own truck lines] There was the ‘Pool Car’ it was loaded and reloaded at different locations for multiple destinations. Probably not practical these days(?) They did keep the boxcars loaded and moving.
Might Short Haul containers be considered the ‘new’ boxcar of the 21st Century? Their problem is that the last leg must be from a specialized handling unload/load location. [phyical lifting equipment]
If the BOXCAR business was’there’ would not a Corporation like TTX not be building new cars to fill that gap? I remember a number of years ago, TTX and its RBOX Fleet { They had painted on their sides a big red “X” that said " ANY LOAD" x “ANY ROAD” those cars seemed to be everywhere;then they seemed to be storing those cars, and they gradually disappeared. Now you can see a few of their ‘new’ boxcars in trains, but nowhere near previous levels that could have been observed all over the country.
Containers (COFC) do resolve the current delimma in the trucki
I’ve seen several forum members make arguments for the railroads to get back into OTR trucking but nobody has answered a question I’ve posed on previous threads about it.
Does anyone have financial projections that indicate that the Class 1’s would do better competing directly with Swift, Hunt, etc… rather than ha
That’s a good point Carnej1… JB Hunt and Swift are important customers, and one would have to tread carefully in order to ensure that any foray into selling these services directly to shippers isn’t inadvertently alienating current intermodal marketers. But I believe it can be done… speaking for myself, I have suppliers and customers who are also competitors in other markets or in other lanes. The distinction between supplier and competitor is growing increasingly blurry… which is I guess why one sometimes sees competitors’ railway locomotives working together… i.e. a train with both CSX and NS power.
One market that isn’t dominated by any of the large trucking carriers is skid lot LTL… the big LTLs (like YRC, Fedex, Old Dominion) don’t like anything over 1500 lbs… and the big TLs like JB Hunt and Swift work primarily with truckloads only. So that middle ground (heavy LTL if you will) is really virgin territory which is currently being handled by small carriers predominantly… No large carrier that I know of specializes in heavy LTL… although there sure seems to be alot of it around that needs shipping. In my experience the small stuff (up to 1500 lbs) is easiest to move… truckloads come in number two, and the heavy partials are toughest to move… the railroads could probably go after those without offending the Swifts and Old Dominions of the world.
Sam, You’re talking about LCL while I was talking about carload. They’re different animals.
LCL was an intermodal operation with pick up and delivery done by trucks. Railcars moved between a limited number of terminals (freighthouses). To serve smaller communities a “Pedler” car was used. It stayed in the train and was unloaded/loaded at the railway station while remaining in the train.
That is a big difference.
The railroads didn’t voluntarily exit the LCL business so much as they were drivien out by inane government regulations that kept them from being truck competitive. Government restrictions on the use of intermodal containers is the prime example but there are many other such Federal restrictions that moved LCL to long hauls on the highway.
Ulrich, can you qualify something for the stupid like me? Is this referring to LTL loads of 1500 lb or more on multiple pallets, or a single item that weighs that much?
Raises an interesting question on what a railroad would need, by way of infrastructure or equipment, to handle and work with the latter…
Not stupid at all… I just wasn’t very clear. I meant shipments that weigh in the 1500 lbs to 20,000 lb range. They may consist of many pieces/pallets or one large bulky piece. The conventional LTL outfits shy away from such heavy and/or bulky shipments or refuse to handle them altogether. So alot of these shipments end up getting moved at truckload rates because there aren’t many companies that specialize in these large albeit not full load shipments. It might be something the railroads could look at servicing and would probably require something in the way of terminals just as the smaller LTL would.
The railroads might even look at purchasing one of the large LTLs… most of them are only marginally profitable and can be had very cheaply… YRC (to name just one) has been on the operating table for quite some time now…it could be had very cheaply I think as it hasn’t turned a profit in years yet defies industry pundits by remaining in business. Imagine a combo like CSX/YRC for example… forget railroad mergers… a CSX/YRC combo would turn the railroad into a one stop shop for all freight from the smallest boxes to the largest boxcar newsprint loads.
It has only been within the past decade that UP finally unloaded Overnite trucking to UPS.