The below CSX service bulletin is very interesting for ongoing traffic. The 2 underlined sentences note car requests are up. As well the AARR says March car loadings were best in three years. Does this mean that all USA RRs may be plugged for the foreseeable future ?l
Customer Service Advisory - Winter May be Easing Its Icy Grip
Yet another winter storm - hopefully one of the last of the season - dumped 6-8 inches of snow on CSX Transportation lines between Cleveland and Buffalo last weekend, but gradual progress continued toward improved service levels. The impact to CSX operations from the most recent storm was minimal as temperatures warmed and remained above freezing for most of the week. We are now working through residual effects of the weather, combined with a surge in traffic.
As weather warms, CSX and some of the other carriers are experiencing scattered issues with minor flooding and washouts, which are expected after such a long, harsh winter. - Network fluidity and equipment availability continue to gradually improve, and CSX has filled more car orders in each of the last 3 weeks than in any week in the last 3 years.
System Overview. As weather continues to improve, we expect the rate of operational improvement to accelerate. The condition of our processing yards continues to improve as we are seeing reduction in car dwell. Delays for locomotive availability, locomotive reliability and crew availability are decreasing but still have not returned to normal levels. Operations through the Chicago gateway remain fluid but not quite to normal levels, and interchange of rail cars remains current with most of the other carriers in Chicago. Service Outlook. While we continue to expect consistent recovery over the upcoming months, there will be variance due to heavy and uneven demand as evidenced by the extremely high car order f
Streak, Three things: Any “all” or “never” question is false 99.99% of the time. Car orders on CSX may be high this week due to orders not getting filled in prior week or two or three. Most recent peak volume year for industry was 2008, IIRC. All subsequent years have been lower, 2009 lowest with rest above '09 but no consistent pattern of recovery, per Railway Age monthly traffic data. System wide fixed plant capability is better than '08. Power and cars are coming out of storage. How much due to more volume vs. lower velocity is not clear at the moment. Most likely system capacity constraint is crews since traffic has been down. BNSF seems to be at capacity both sides of Eastern ND, but they will have major capex this year, and perhaps next, to build their way out of the bind. This is a lot better problem than not enough traffic at high enough rates as in 1950’s thru 1970’s. Mac McCulloch
Business is way up this year and everyone is struggling to keep traffic moving, there is even a box car shortage for the first time in 40 years, and coal loadings are partially up. Intermodal continues to boom also. It is a great and challenging time to be in the business. I didn’t even mentioning the crude oil business continuing to expand rapidly.
Have been waiting for some poster to address the average car mile and also ton mile figures. If those figures have increased say more than 10% then the RRs are going to have problems ? Will edit this to original.
I am also awaiting the 1Q reports, although those will be somewhat influenced by the winter weather.
In the trucking industry, there is a strong demand at this time, perhaps the strongest in about 6 years. Carriers are adding capacity as quickly as they can hire qualified drivers. Several of my accounts in Chicago are “Eastern European” and are continuing their past trends of bringing over qualified personnel from the homeland with the opportunity to drive a truck and make big $$$.
If we really wanted to take a step for solving unemployment for the young non college educated, a vocational program would be established in schools emphasizing logistics including material handling, truck driving, and clerical aspects of the industry.
Perhaps this would be better served in junior colleges, but there is a real shortage.
Thanks for the link to the article. The other articles, including Amazon’s private fleet are just as interesting.
True story. Recently I was at one of my customers in Chicago…an Eastern European trucking company. I struck up a conversation with a driver who was from Serbia. He is an Electrical Engineer and when asked why he is driving a truck, he replied that he can make far more $$$ in US driving a truck than applying his education in his country.
Yes, we are rapidly approaching the situation of 2008 where rail traffic was at capacity. (See the thread in this discussion on the farmers complaining they cannot move product.) To this I say, call your Congress and ask where are the trucks that are supposed to glide down our Interstate Highway system and take over all the rail traffic? In the old days industries that needed rail service built their own railways and bought their own rail cars. Now everyone just cries to Congress. The real complaint is from the industries that realize how efficient the rail system has become and cannot get their own product moved. To that I say: invest in the railroads and build more track.
As a side note, the problem with the rail system is that it has removed so much rail in the past 80 years that chokepoints easily overload. When a system reaches its capacity a small increase in traffic offered can cause a large increase in delays. The railroad could solve this problem by reducing their carloads to prevent chokepoints. This however, would be perceived as controlling service to allow the railroads to raise rates. Congress would jump in and tell them to take more cars and the rail service would deteriorate quickly.
Rail service is an excellent example of queueing theory. This is a statistical mathematics that can estimate how long it takes to get a customer served when the system has a certain capacity C an arrival rate of customers lambda and a service rate of mu. There are a number of on-line calculators that can help understand how quickly a system with limited capacity becomes overloaded. As an example if we offer C=2 (perhaps trains/hour) and customers signing up at 1.7 customers/hour and it takes 1 hour to get a customer loaded and on its way, then the average wait time for a customer is 2.6 hours. Since the number of customers is less than capacity we are happy and the wait time is moderate. Now if we increase the arrival rate of customers to 1.9 per hour (very near capacity). the wait time jumps to 9.2 hours. If the number of customers gets even close to 2 per hour the system breaks down (customers are arriving faster than we can process them). At 1.99 customers/hour wait time is 100 hours. You can change the units from hours to days or whatever, but the result is the same. This is the problem with a capacity limited system. No amount of Congressional inaction can change the mathematics. The railroads understand this and try to best use their limited resources to keep traffic going. Of course if the weather closes the rails, wait times become infinity quickly.
I just read a report on CCJ which basically pegs the trucking industry at 99% capacity at this time. The weather conditions of Q1 dug quite a hole which will take perhaps the entire Q2 to dig out.
If coal traffic picks up for the rails, along with all the oil now moving, it could be quite a year…for record earnings and congestion.
Here is a bit of data from UP 2013 Annual Report on Form 10-K that suggests that capacity constraints are not an immediate problem. Ag products: Severe drought in 2012 affected grain volumes during the first three quarters of 2013. Fourth quarter {2013) grain shipments increased 41% due to a robust fall harvest. 2011 - 2012- 2013 Ag products, which is more than just grain were 934, 900, 874 thousand cars per year… Coal down from 2164 to 1703 thousand cars 2011-2014. Total revenue carloads down very modestly over same period. All page 26 Gross ton miles down from 978 billion to 959, to 949. Mac
With the various reasons for the locomotive shortages one has to wonder if there will be a loco parts shortage ? Might not be now but some time in the future ? Does anyone know how parts are ordered and if just in time is used ? the older units of the RRs might find parts tight ? The one of a kind type loco of a RR might also be a problem if unit on another RR ?? How do RRs allocate parts installed on foreign units ?
UP announced record 1Q 2014 earnings recently. Revenue carloads up 5% vw. 2013. Ag products was largest segment gainer at 16% increase. They did not day but I suspect this is due to strong grain movement.
The April 2014 Railway Age has a nice chart of weekly carloadings 2009-2014. The average average is 280,000 loads per week over that five year period. In every year there is a sharp rise, at least 10,000 loads per week, from July to August followed by slow declines through November with a sharp fall off in December, followed by a sharp rise to about normal in January.
Two years deviated substantially from that pattern. The first was 2009 which was consistently below all the others from March to the end of the year. The other was 2011 which had a March peak of 300,000 followed by a continual decline to the typical June low of just under 280,000, followed by a uniquely strong second half with a peak of over 300,000 cars in October.
So far this year US carloads are tracking right on last year. For the five weeks ending March 1 carloads are down 1% vs. last year. Canadian carloads are down 10%. The Canadian numbers were probably due to weather and yes that would inhibit the movement of grain off the prairie. Both US and Canadian intermodal was up in March, 1.1% US and 2.3% Canadian.
My conclusion is that capacity is probably tight, but there is some reserve still in the system. Specific lines and lanes are a separate issue.
MAC: good conclusion. For the first time in years we are having an all automobile carrier train each way near mid day. The Wall Street Journal ran an article today saying auto manufacturers are complaining that there is not enough RR capacity to carry autos. That may be because each auto line is only built at one place ? That would cause longer runs without increasing car loads of auto ? One reason ton miles also needs to be observed ?
EDIT: As a note – CSX just recently upgraded tracks here and the auto trains are going fast.
Streak, As the complaining auto guys, grain guys, and everything else guys bring up if you read between the lines, not all ton miles are created equal. Consider auto and intermodal, which some marketing departments call premium service. They both involve relatively low ton miles per car mile, but demand premium service. Coal, grain, and oil unit trains load heavy and need to move as planned, but can run slower than the premium traffic and do not use terminal capacity. Carload traffic also needs to move to plan and consumes lots of terminal space, time, and crews. Three different services, three different types of demand, three different types and levels of terminal cost. As to your point about ton miles, they will track fairly closely with carloads. I would not put a lot of effort into digging up whichever figures I did not have. I think you could get a better feel for operating impacts by tracking volumes as between the three segments. Your report of fast auto trains tends to support the idea that carriers are making the investments necessary to handle both more traffic or handle what they have at a lower cost. Mac
Back when I was responsible for the overall operation of a small network of computers that handled the data reporting requirements for a number of terminals on my system I had the need to gauge the computers efficiency from two viewpoints - from satisfying the users requests in a timely fashion and from a computer operating viewpoint.
What I observed was, when the computer was stressed to over 50% of it’s nominal capacity the users response times for their request began to grow in an exponential fashion. When the computer was over 50% busy, each users request began to get queued for their shot at the available computer resources - memory, computation, storage, buss capacity etc.
The same kinds of principles apply to the operation of the railroad itself. The more traffic that is handled the more competition there is for the available resources - crews, locomotives, terminal track capacity, line of road track capacity. When traffic is queued waiting on a required resource, it isn’t moving and it is using a resource that is also needed by other traffic; further digging the entire operation deeper in the hole.
MAC: Good points. Was thinking more about ton miles in each category. Maybe car miles for especially auto and car miles and container miles for intermodal. The other comedy’s that are now short of cars might be also considered. We know that the Lake Superior shipping season has been delayed forcing longer grain routes to unloading facilities. If car miles increase then the turn times are naturally be
Balt: Your computer example is a very appropriate example for network theory
If any of you watched the STB service conference on the STB website or live, you would see BNSF’s problem, every bit of the traffic increase since 3Q 2013 is happening on the Northern Trancon, everywhere else on the BNSF system is showing a slight decrease in traffic. Of course that isn’t a big surprise, other than the the absolute difference. “The” Transcon even is showing a slight decrease.