Railroad growth is going to be seriously restricted by manufacturing constraints.
At present tworldwide rail related manufacturing capacities are straining to fill orders. No amout of money can speed the process up until more capacity is constructed. This post will highlight choke points that appear to be occurring in the RR industry. The inability of both Airbus and Boeing to get their latest products out on schedule highlights the integrated supply chain management pitfalls. (A-380 two years B-787 18 months). The complexity of parts and equipment is bogging down the supply chain.
Freight RRs;
Both GE and EMD have few if any spots left for additional loco orders. I’ve been told that locos in the field sometimes cannot get parts in a timely way but so far no serious delays have occurred.
RRs biggest limitation may be new Rail. With only one manufacturer in the US operating at 100% and the RRs wanting heavier and heavier rail to meet the 315.000# car weights and with much double tracking rail is in short supply. I remember a few years ago new rail would be placed months ahead and the old rail left several months. Now on one renewal near me the new rail went down two weeks early and the old pulled up in one week (may have been a blip). Some of our threads and posts seem to also indicate this trend. Any observations?
Old locomotive parts are also getting in short supply and that could affect the Class 2s and short lines. The order by one class 2 of new locos may indicate the difficulty of acquiring parts.
Wooden cross ties and bridge timbers are in short supply because many creosoting plants are closing due to environmental issues.
If the decision to electrify is made the switch gear for power systems has long lead times. Also there is no incentive for GE and EMD to produce a product that has a longer service life when their backlog is so large.
AMTRAK , commuter rail, and light rail.
My contacts say
“at present the worldwide manufacturing capacities are straining to fill requirements for heavy industries”. Huh, please cite sources when making such a broad statement. Same goes for the rest of the post.
“No amount of money can speed the process up”. Ridiculous!!! Pure speculation
There are three U.S. rail manufacturers – Arcelor Mittal (the former ISG-Steelton, before that Bethlehem-Steelton) at Steelton, Pa., with a capacity of approximately 850,000 tons/year; Evraz Oregon Steel’s Rocky Mountain Steel Mill at Minnequa, Colorado (the former CF&I Steel) with a capacity of 520,000 tons/year; and Steel Dynamics at Columbia City, Indiana, which is commissioning a rail mill for production beginning this year with a capacity of 300,000 tons/year. In addition imported rail is available from mills in Japan, Korea, Germany, and elsewhere.
RWM
RWM:
Thanks I did not know that the Steelton plant is still producing or the new one in Columbia city. Are those figures therotrical or actual rail production? Assuming all production is rail that would be Approximately 5520 track miles of 141# rail with no waste. + another 1208 miles from the Columbia city plant. Is that enough for new tracks and replacements? /When I stated lack of manufacturing I meant rail related and will change the post. What are the lead times for various rail related items and is there waiting lists for some items? A signal job done outside my home by CSX had to wait 3 extra months to be completed for lack of a part but it did not impeed trafic.
There are a number of vacant automobile factories.
They have roads, rails, and electric service adequate to open a manufacturing facility fairly quickly.
You would be speaking Japanese if Americans had said “Do you know how much material, labor, and time it will take to replace all those ships at the bottom of Pearl Harbor?”
Where there is a will, there is a way. Where is Mr. Kaiser when we need him?
Capacity of a steel plant is what it is designed to produce when operated at 100% production levels after deducting for loss for normal maintenance downtime, waste, and inefficiencies. Often a mill can produce somewhat beyond 100% if it’s maintained well and operated by experienced management and labor, and worked hard.
Lead times for ordering rail and OTM is never the same from one day to the next. A major project suddenly appearing can consume capacity and cause up to a one-year wait for rail, but as long as it’s ordered 12 months in advance there’s usually not an issue. Rail is governed by supply/demand equilibrium like any commodity – even though it’s a pretty exotic commodity – and if need in the U.S. doubles then steel making capacity will be reoriented from less profitable steel products or expanded. The fact that Steel Dynamics is entering the business is an example. Rail is a difficult and demanding steel product and for a new maker to learn it and commit the resources to learn it indicates a deep faith on the part of its investors and management that the demand will persist.
The only resource in short supply is money. For example, there is fundamentally no shortage of oil, only a shortage of cheap oil. If the price goes high enough there will be enough money to manufacture every drop we could ever want to consume from air, dirt, and water. The limit to the rate of expansion of railway capacity in North America is only how much people are willing to pay to obtain it. The argument is typically which people will pay for it and whether that’s a fair apportionment of the cost.
RWM
And the price of materials made out of steel is skyrocketing right now.[V]
Phoebe: every auto plant and truck factory I’ve been in has no 100 ton cranes or the overhead room to manufacture. Also a space at least 120 ft wide and 600(?) ft long. As RWM says rail manufacture is very specialized and the same can be said for passenger rail cars. My worry is on a fast ramp up of capacity and production there would not be enough qualified inspectors. I’m an inspector in another line of work and know good work when I see it but put me in inspecting rail items and I could be completely misled by the manufacturer.
You currently have two carbuilding facilities that have recently been shuttered (Johnstown and East Chicago); they’d be better for whatever production you’d want than the automotive plants. Also, I don’t believe the CSX Raceland shops have disappeared yet. In whatever form they’re currently being used it’s underutilization.
Make that three. Greenbrier has also shut down TrentonWorks in eastern Canada.
Regarding locomotives, everyone seems to be trying to sell gensets right now. Isn’t the market saturated?
EMD could also produce road units in Mexico and at SuperSteel if needed.
Rail traffic is down a bit and quite a few SD40-2s are stored, maybe 300-400 of them. lots of cars stored too. Of course you need the right type for what you want to haul.
Many of the major changes are already taking place on at least one RR the BNSF for instance the double tracking of the mainline between Los Angeles and Chicago and the triple tracking of Cajon is almost complete as well. Several sidings in Montana on the former GN are being lengthened to the point where they will practicably be double track in projects scheduled for this summer. Other areas of major trackwork scheduled in Texas this year will increase train speeds over most primary lines. There is going to be some major work going on over many parts of the BNSF system this summer resulting in increased train speeds for high priority freight.
Al - in - Stockton