The current issue about coal is most interesting. On page 55 at the top right is bar graph showing that railroads aren’t investing in the newer coal cars… 75% of all new cars are not railroad owned. What is causing that shift from railroad owned to nonrailroad owned?
Given that transportation is a significant component of the the delivered cost of coal to the powerplant, it is surprising that coal plants aren’t built closer to where the stuff is mined…wouldn’t it be cheaper to do that and send the electricity over the distance instead of the coal?
For the first part, I imagine it’s similar to the reefer cars of the steam era, which were normally not RR owned. By owing the cars, the power companies have more control over where the cars go, and can do more to be sure the cars are maintained in good shape I’d imagine.
For the latter question, I think you would lose a lot of power trying to send electricity from the Powder River Basin to Wisconsin or Illinois or wherever. You’d be losing a lot to resistance over the miles.
Railroads have been trying to get the utilities to purchase/own their own coal cars for years. There is a lot of up front ‘first cost’ with purchasing several sets of coal cars(as well as scheduled service on them). This allows the carrier to invest in infastructure(like track/signals) or locomotives.
Building power plants out in the PRB might sound like a good way to avoid the long transportation cost of coal, but the ‘line loss’ of moving electricity over long distances is even worse. You can be sure that the ‘bean counters’ at the utility know just how far the they can stretch the transmission network vs the cost of transporting coal.
About power loss over distance…anyone have any idea how significant that would be? We (in Canada) sell electricity from James Bay and northern Quebec to points in the US …apparently loss over powerlines aren’t too much of a problem there.
This started in response to Penn Central and its poor car availability. It is based on ‘covering’ and assuring a car supply for the long-term contracts with certain mines and railroads to haul the coal. Our local utility - PPL now, used to be Pennsylvania Power & Light Co., reporting marks PPLX - started doing the same thing at about the same time, or maybe a few years earlier, except PP&L bought several sets of cars only, not locomotives.
Many of the reasons have been stated above. It also makes it easier for the utility to negotiate hauling prices with different railroads if the obstacle or concern about recovering the investment in cars is taken out of the discussion. Buying the cars also locks in their initial cost as against escalation in the railroad’s ‘car hire’ charges if cars from a railroad fleet were relied upon and used. Also, the cars - as a capital inves
If you look at any carrier’s tariffs, there will be freight rates for company supplied and customer supplied equipment. Unfortunately the coal unit train pricing is password protected…so we have to use something similar.
A similar type move of about 1000 miles of agriculture products shows a rate difference of about $200 per carload for using company owned equipment.
Paul North can probably give a pretty good idea of what a new coal hopper would cost…my guesstimate would be around $60,000.
How many turns per month or year will a trainset make? With all this info, plus the availability of the cars at your control…it must make sense. It would be interesting to take a look at cost of equipment, turns, etc. Can anyone help here?
I believe most (all?) of the power Hydro Quebec sells to the Northeast is just surplus power during the summer, when Quebecors are not heating their homes and Americans are cooling theirs. And it is cheap hydro electricity.
When the RR owns the cars, they can get lazy about utilization. Nobody is beating them up about cycle time for the equipment. After all, the cars and the track they sit on are already owned, so if they move or not is not a huge deal. There isn’t much of a push to squeeze cars out of the pool until it comes time to spend $$ for some new ones. With private equipment, the shipper can build cycle time into the contract with the RR (with penalties!). This tends to keep things hopping!
In the pre-Staggers era, you are correct…the carriers really didn’t care that much about cycle time, of course they really didn’t have the computer power to track the cycle times of all their equipment. In the post Staggers era you are off base, especially with the increased use of computers to track cycle times for all forms of equipment. The name of the game is to increase the number of cycles equipment completes per month in order to minimize the amount of equipment necessary to fulfill the customers tonnage requirements.
I agree with you, sort of. There is a lot more effort put into car utilization and the data needed for the effort is much more available, but RR are still rather lazy with their own equipment compared to private equipment with cycle time penalties written in the contracts…at least around here…
I wonder if that is because of the major differences in the nature of coal shipping in the east, verses west. As I see it. western coal is shipping huge amounts from a couple dozen mines to a couple dozen destinations, all day, every day. Eastern coal is shipping in smaller, and varying amounts from hundreds of mines to hundreds of destinations.
When a coal car from the PRB is dumped, the railroad knows where that car is headed afterwords. I’m not sure that an eastern coal car has the same repitition of movement.
You’ve have partially answered your own question: read the issue and all your questions will be answered. It has to do with history, railroading, the coal industry, economics, geography, and timing.