Because there is little or no profit margin. Even Israel has problems with its freight side due to the fact that its about the size of New Jersey. The cost of trans loading is too much. However specialty unit trains like gravel trains that go from NH to the Port of Boston or certain other unit trains might work. The problem with this is that 60% of truck traffic begins and terminates in the Northeast because factory’s and suppliers are closer together. NS has something called Empire Link for in state shipments in UPstate NY but little info is available as far as how much one could save on freight rates over truck.
This post is a fiction. I will admit that short haul traffic is often not attractive to the railroads for a variety of good reasons specific to each move, BUT when I was marketing VP for a short line the best paying move we had was a captive move of about 40 miles.
The real problem, if it is a problem, is that the carriers do not have any local marketing. That is an entirely different discussion.
Mac
Agree with Mac. I know of a unit train that moves less than 10 miles. Lots and lots of OD pairs of a couple hundred miles - all depends on what you’re moving.
I believe NS has a short unit train movement of coal in Southern Illinois/Indiana that is less than 30 miles…perhaps less.
NS also has “bottle train” movements from East Chicago to South Chicago which is about 20 miles.
I also know that NS and CSX moved quite a bit of grain short distances in the Decatur, Il. area for a major grain processor.
Ed
OP may be right on single car railroading.
The Class 1 carriers have been working themselves out of single car railroading since the enactment of Staggers in 1980. Give the carriers enough repetitive volume (ie. unit train quantity) and it doesn’t make any difference if the haul is 10 miles or 1000 miles. My carrier has a 5 day a week movement that is less than 100 miles round trip.
LION ships by truck. Him ships truck load of Wine from LA to Richardton.
What will railroad charge me for that I wonders? I dont have a loading dock, and I’ll bet that thewinery does not have one either.
For shipping Altar Wine to churches out here, the price on the shipping is the same for one case as it is for four of five cases. Sure, I’ll ship one case, but the shipping will cost more than the wine. OUr carrier bills by the “hundredweight” which I have not quite figured out yet since the minimum charge seems to apply up to 150# or so.
I tell the churches , Order six cases, the shipping will be almost the same, and at six, we offer a 10% discount. Still most churches are better off picking the wine up in Richardton, just so long as they do not make a special trip for it, for then the trucking price would indeed be cheaper.
Same, I suppose, for shipping by rail: They will ship whatever, wherever, whenever, and bill accordingly, which may break the deal, but still, the deal is on the table.
ROAR
Pure BS, please provide a link to validate this.
At the tiny shortline I started with they interchange loaded Ethanol by product (dried distilled grain) to the NS and the NS takes them about 2 miles up the river. They are unloaded onto brages and brought down empty the next day. Im sure they make decent money on the move, somehow.
The trouble with short hauls for rail is the cost of drayage to and from the railhead. Take a lane like Charleston, SC to Atlanta, GA, for example. The road miles are 341. You can get a truck for $700.00, door to door. If you use rail then you have drayage at each end… which would come to $375.00 total. So to be competitive with truck, the line haul price for rail can be no higher than $325.00. And that’s probably a best case scenario. In reality rail can’t provide overnight by next morning delivery, so customers would want a discount for the longer transit time.
Rail could be competitive on short hauls for LCL freight, set it up like it used to be done using freight house consolidation and distribution. IMHO the railroads gave up a lot when they got away from retail transportation…do the hard work of consolidating partial loads, stuff them efficiently into boxcars, ship them, and then distribute on the other end. The margins on this traffic are much better than they are for moving containers from point A to point B.
Railroads can make short hauls work on some business. But they have to identify which lanes and what services are most conducive to rail, and market those. That’s what the truckers do. You don’t see truckers trying to compete for the long haul container business because they know that they would be going head to head with rail, and that would be futile. So they focus on long haul traffic that isn’t directly competitive with rail, like shipping steel from Charleston to Dubuque.
One of our Q trains usually has some box car loads of wine. One time when it was a short (about 75 or 80 cars long) train, wine accounted for 10% of the loads.
MEOW
[QUOTE]Waste Line Express
The Waste Line Express is a 10-12 car, custom-built train that hauls solid waste between the Roanoke Valley Resource Authority’s Tinker Creek and Smith Gap stations. Each weekday evening, the train makes its 33-mile journey carrying waste collected from residents and businesses in the County of Roanoke, City of Roanoke, and the Town of Vinton. The Waste Line Express is owned by the Roanoke Valley Resource Authority and operated under contract with Norfolk Southern.
http://www.rvra.net/index.aspx?NID=106
[/QUOTE]
Does anyone seriously believe that Norfolk Southern is not pricing this movement such that they make a profit in this 33 mile (one way) move? [?]
Ulrich,
Great post. You make a lot of important points.
Drayage costs are the death of intermodal profitability. While there is no absolute magic number of miles at which a railroad is not truck competitive, it is a fact that the higher rail terminal/drayage costs generally make rail movement decreasingly competitive with trucking as the distance moved goes down. (However, as already pointed out, there are numerous specific situations where rail can be, and is, competitive for short distance transportation.)
The US railroads did not voluntarily leave the retail market. Or the LCL market. They were basically forced out by inane government economic regulations which prevented them from doing things such as pick up and delivery, containerization, etc. Once you loose the corporate expertise to do something like that, it’s very hard to regain it. I’ve been over this one before and will do so again if anyone is interested.
I fully agree that shorter haul LCL in boxcars could be a good opportunity for rail. (I did write a MS thesis saying that.) But most railroads are not marketing oriented companies (thanks to that inane government regulation which effectively prohibited from actually marketing their services) and I doubt they have the ability to quantify and evaluate the opportunity.
Charleston - Atlanta at 341 miles is a tough one. You’d have to focus on keeping the dray costs down. An on dock intermodal terminal at Charleston would be a start. As would be multiple smaller IM terminals in the Atlanta area. I’d think a 10 hour schedule with a 34 MPH average would do it. It’s certainly possible. Not likely, but possible.
The business rationale appears to be: If track (train) capacity is limited and being fully utilized/ committed - as many lines are, at least in certain critical sections or junctions, etc. - then why use the available ‘slots’ for short-haul traffic, when they can be used instead for long-haul traffic, with much greater revenue and profit potential ? The answer, obviously, is “Don’t” - unless there is a combination for the specific situation that one or more of the following exist:
- The route does have available capacity;
- The short-haul can cover its fully-allocated costs, and then some for a profit;
- There’s more revenue and profit to be made from the short-haul than the long haul it would displace;
- No disincentives such as messing up motive power pools and utilization, crew districts and assignments, etc.
Others may be able to add some additional considerations.
Finally, an article by Tom Murray in the next (October 2013) issue of Trains will be about stone trains on Class I’s, which are mostly short-haul.
- Paul North.
There isn’t a hard-core distance cut-off - it all depends on the amount charged and the cost of that particular move. Most carrier (in all transportation modes) have well-developed costing programs that can have dozens or hundreds of input factors.
The customer matters, too - if, say, DuPont wants to move a tanker load of chemicals once a week from a 200- carload -a-day plant in the Houston area to a small plant in Louisiana located on a short line to which the originating carrier drops a couple of dozen cars a day, UP or BNSF would likely never question the move. Shipper/consignee contract would have a tremendous role in determination.
A two-carload-per-week move originating from an otherwise unserved plant located in a difficult-to-access location (remote in terms of the railroad local service pattern, or on a very busy main line where local switching would severely impact the flow of mainline traffic) probably would have problems buying service for shipments of -any- distance (unless, perhaps the move was going TO DuPont).
Got to disagree with you a bit here.
Why would you insist that short haul moves cover their fully allocated (average) costs? You’ll never maximize financial performance that way. Generally, a shorter haul will mean that trucking is more competitive. You want to cover your fixed charges with mark ups on the less competitive traffic, then price the competitive business above marginal/incremental cost. Doing that will throw money to the bottom line. Not doing that will leave money on the table.
Let’s go back to the Charleston - Atlanta example. If the NS train from Charleston through Atlanta is at capacity with long haul, good
Single boxcar car railroading from team track (If the railroad has one) to warehouse or team track. Cost of transloading labor per hour is too much. Same with intermodal…RRs wont quote a rate for short haul intermodal like Harrisburg PA to Port of NJ. Sure it might make sence to get around the traffic and the bribes that you have in pay in NJ but the haul is too short and the lift fees negate any savings. Now CN had short haul Laser Train service from Windsor to Toronto to Montreal but highway speed on the QE are 80 mph legal or not.
How do you get the wine bottles in one peice?
CN does have its own trucking drayage department…I would post info on it but the hotel is blocking the site here in Neenah WI where CN workers stay at[:(!]
My understanding (corrections from anyone with actual knowledge welcome) is that NS runs containers from Savannah to Atlanta, whichis roughly 250 miles by road; at least 150 miles of that is lightly-used Interstate, and the rest is also Interstate. I believe the rail distance is somewhat greater, another disadvantage. I can’t believe NS is handling this traffic at a loss, so they have figured out a way to make it work.