Thought some of you would find this interesting.
http://www.logisticstoday.com/displayStory.asp?nID=7351
The quote of note: “A spending shortfall of $3 billion per year for rail infrastructure will lead to a $21 billion increase in highway costs. A mode shift resulting from inefficient rail movement is the cause, says Leo Penne.”(bold font mine)
I’ll defer comment because I’m more interested in your perspective on this.
This guy reads like a cross between a politician, a magician and a crook. If the railroads recieved anywhere near the government support the other transportaion industries do we would not have to worry about our highways. How bout a billion dollar bailout for the RRs like the airline industry just recieved. ANd where are we trading to. Last I heard in is Walmart good for America Long beach I believe was recieving over a hundred billion in goods every year and shipp out maybe thirteen. Which is mostly recycleables to support Chinas growing industry for here. People wake up and smell the coffee pleaseeeeeeeeeeeeeee
Billion dollar bailout for the railroads… we can only dream of that day.
I don’t see very much depth to the article, except perhaps on the subject of the the game of golf. I suspect the speaker was somewhat more coherent than the article and I wonder if AT grabbed someone out of the mailroom to cover and write the story.
Anyway taking what I read hear is my question on the sound bite. If it takes $21 billion to provide infrastructure for trucks as an alternative to a mere $3 billion railroad investment to accompli***he same task, JUST HOW EFFICIENT ARE TRUCKS?
There is reference to a retailer giving up on the ports of LA and Long Beach because they can’t get the first 50 miles from the Ports. Now I don’t know if they were talking about just getting out of town or whether they were just going 50 miles to a destination. As you may realize, there is a difference between the two.
Here is the story I have heard. While it is probable that a fair amount consumer goods may be sold at such high volumes that full box loads of a given product or product line can move direct from a manufacturing plant to a store, there are still huge quantities that go through a break bulk facility. I assume you know the function of break bulk. At some point logistic managers decided that the ideal spot for break bulk is close to the port of entry. The logic being that if you set up break bulk in Kansas City, maybe up to half the freight is going to be run right back in the direction of the port.
Apparantly, land close to the ports in the LA area is very expensive compared to land about 50 miles out, so the break bulk facilities were located in the outer fringes of the metropolitan area. Consequently, the relative short haul makes trucks the better mode to move the boxes from port to breakbulk facility. Given the congestion in the area, I can understand why a major retailer would bail out of the area.
So here is another question. If the railroad put in the $3 billion, could they get rates high enough to get a return on investment
To me it sounds like a highway supporter saying how important the highways are, and how much more government money they need.
Jeff
The article is giberish. Hope the speach made more sense.
Mac
Actually this article is written (& heavily edited) by a bunch of guys…cause the byline says it’s by ‘LT Staff’. Unless there really is a guy named L.T. Staff.
Shipping and timing is more of a matter of need vs convenience. I agree with the above posts, the article sounds like it’s written by trucking advocates. However you can’t beat a freight car in terms of efficiency for bulk shipping. It then becomes a matter of timing and convenience over management and good planning.
Now…timing is very critical for ‘Just in Time’ shipping and supply. Railroads usually have to make their own schedules because of the nature of the trains and the number of suppliers that ALL need attention. At first, that appears to be a dilemma. You can take a trucking rig and run it to any destination…and therefore it SEEMS more convenient. What these guys completely miss is the management challenge of making all deliveries routine.
I also notice the coy stab at ‘engineers’ in the article. Most of today’s management philosiphies are based on miss-applied engineering techniques over simple impatience like…‘being impatient for the Train.’ Sooooo lets use something that’s even more involved and make it up in the price. Trucks and autos use a lot more energy BUT they are a lot more convenient. It all has a price and there is no easy answer.
I agree, it’s kind of a dumb article…in that it takes a ‘One size fits All’ approach to modern shipping practices.
Now I have to get to work.
My [2c]
Mark
Maybe it’s Leutenant Staff…
Why haven’t I heard of intermodal distribution/transloading centers? They would be great for people outside of LA and other busy ports. Drop them off, load them on the cars and take them to the intermodal yards or ports.
Maybe new thinking should be applied here. Build thease as alternatives for huge intermodal terminals and have them switched like industrial yards within the city. Have the intermodal yards act mainly like marshalling yards for various points ie port, other cities, railroad transfers.
I know it is a long shot but considering AAR keeps saying intermodal traffic is increasing per year, something like that might be worth looking into.
Our local radio station had an interview with a trucker this morning who said that it now takes $550 to fill his tanks with diesel and he is parking the rig until “prices come back down” (yeah, lots of luck). Shouldn’t the more efficient carrier (rail) get the fuel?
What he’s saying is that for every dollar in capital that RRs can’t raise, it’ll cost us $7 in taxes.
And, in order to keep up with growth, the RRs need to be spending another $3B/yr in capital improvments (this is pretty well documented). Current RR income levels don’t justify additional private capital being invested. (partly because the competition is subsidized)
In order to build the same capacity that $3B invested in RRs would get you, you’d have to spend $21B/yr in highway construction.
The implication is that the public should invest in private companies because it would be the most efficient use of capital (and keep our taxes lower!)
G’day, Y’all,
Congress just passed a $268 billion transportation spending bill to include both highways and commmuter rail. But seems like I read that highways alone needed $375 billion this year to keep the infrastructure from crumbling more than it has - kind of a sinking fund. So I guess things are just going to get worse. You’d think that with all that money the highway lobby can give Congress they’d come up with a little more. Back in the day of Dr. Thomas Durant, when you bought a politician, he gave real benefit, not just some table scraps.
Jock Ellis
Cumming, GA US of A