From Progressive Railroading News today – see a couple comments below:
UP picks up coal-train loading pace in PRB, Colorado/Utah
Through March’s first week, Union Pacific Railroad was on pace to exceed Powder River Basin (PRB) mines’ and customers’ coal demand for the month. The Class I loaded 240 coal trains during the first week.
Even in Colorado and Utah — a market that continues to be depressed because of coal production problems — UP officials believe the Class I is on pace to meet demand in March. The railroad loaded 61 coal trains in the states during the month’s first week.
UP’s coal train loadings are starting to pick up after a slow February, when the railroad loaded 914 trains in the PRB vs. 1,091 trains in February 2008, and 233 trains in Colorado/Utah vs. 305 trains in February 2008.
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Two comments:
Most people when they think of western coal think PRB, and might be aware there are some other mines. However, note that Colorado and Utah boost UP’s totals by another fourth, which is not trivial.
Coal loadings are not off that badly considering the recession. In fact, carloadings for the U.S. as a whole for the first week of March are only down about 15% from last year. I don’t think this can be successfully used to claim “there is no recession” or “we’ve turned the corner already!” but rather to show that railways’ share of the transportation market is much stronger relative to other transportation modes than in the recent past, which in turn may indicate that railways are of significantly higher value now than in the recent past. That, I think, is due to structural changes in the economy, what is shipped, and where it’s shipped. S
“1. Most people when they think of western coal think PRB, and mightnotbe aware there are some other mines. However, note that Colorado and Utah boost UP’s totals by another fourth, which is not trivial.”
Interesting - concur. Compare with the concept and business sector that is often designated as “consumer staples” - such as toothpaste and other things (“necessities”) = pretty much non-discretionary items that most people are not likely to postpone buying and will still keep purchasing, even in a recession. I don’t know what to call the industrial equivalent of a consumer staple, but I’d say coal is one. Unless economic things get really, really bad (“Great Depression” levels), the power companies are still going to be generating large quantities of power - almost as much as pre-recession levels - and so the coal loadings will follow along and not be down much, if at all (adjusted for warmer vs. colder weather variations, of course).
I would have expected other rail traffic markets to show more of a decline - except maybe grain (last year’s crop), which pretty much has to move to someplace, regardless of the current price. Autos, of course, would be way down. Intermodal - maybe, depending on how much of that traffic is consumer “discretionary” spending or similar. But the overall volume only declining by 15% says that rail has become an “industrial staple” or essential as well. That makes sense - to most of the ultimate rail consumers, the cost of shipping is a current operating expense, not a postponable (sp ? new word ?) capital expense. I believe that Fed-Ex’s results are due to be reported today - it will be interesting to see how far down they are. I recall that it’s expected to be not much - les
Thanks for the information. Now a couple of questions.
How much of electricity generated is used on consumer consumption vs industrial or commerical? It seems that with all of the electronic gadgets (computers, printers, adaptors, etc …three railroad scanners for me) that consumer consumption has risen the past decade. It would be interesting to see “where the electricity goes” chart breaking down the usage.
Is most of that Colorado/Utah coal off of the Rio Grande? Also is that a higher quality of coal than the PRB coal? Is most of that coal locally or regionally consumed? We see train after train of PRB coal here in Indiana heading east, or at least I assume it is PRB coal. It seems from the tone of other threads discussing the Rio Grande line that coal dominates the traffic moving. Are there manifest or intermodal trains on the line?
What is the long term outlook for coal? The present administration has indicated that coal is persona non grata and is looking for alternative sources. I dont see anything changing the coal consumption for at least 10 years. Any alternative energy growth will be a hiccup in the life of energy…at least for awhile.
I keep seeing commercials and hear discussions for a “smarter grid”. How much is lost thru the “C student grid” now in place? Where are the “smart grids now”? How are these impacting energy consumption, use, and losses.
A fifteen percent reduction in carloadings is pretty major. Obviously with a service based economy we do not rely on heavy transportation services as much as say 50 years ago. We know that lumber and auto is significantly down, but both should have much easier comparisons going forward. RWM, are you saying that shippers are turning more to the railroads? I do know two t
I wrote it the way I wanted it the first time. Think about it. People are aware, but don’t realize the implications. Very different than no knowledge at all. A little bit of knowledge is not necessarily good enough.
Other than Sufco #1 Mine which loads westward coal (but not eastward coal) at Levan (Sharp), Utah, on the LA&SL Provo Subdivision, it is all D&RGW origin stations or Utah Railway origin stations.
There is no intermodal on the D&RGW I know of, and manifest traffic is roughly 2-3 a day each way.
I shouldn’t get in the business of making forward projections.
Depending upon your politics, the Obama Administration can be characterized as “unreasonable and foolish” or “wanting to fully account for externalized costs, and allocate costs to those who create them” or “we’re all going to be saved now.”
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A fifteen percent reduction in carloadings is pretty major. Obviously with a service based economy we do not rely on heavy transportation services as much as say 50 years ago. We know that lumber and auto is significantly down, but both should have much easier comparisons going forward. RWM, are you saying that shippers are turning more to the railroads? I do know two trucking executives that last
The local lumber yard actually had a carload come in Friday afternoon. Good news as it has been about a month since the last one. Going to go watch the local pickup the empty, if I hear it…good day for that since it is 65 degrees!
OK - now I see the nuance you intended. At the recognized considerable risk of “twisting the tiger’s tail”, may I respectfully suggest the following variation instead:
“1. Most people when they think of western coal think PRB, and mightbe awareonly thatthere are some other mines. However, note that Colorado and Utah boost UP’s totals by another fourth, which is not trivial.”
Before you wonder why the heck I’m wasting my time persisting in deviling you with this (or worse) [:-,] , you might need to know that back in the day - well before my time, fortunately - my undergraduate institution had an esteemed chairman of the English literature department who was infamous for spending the first 2 weeks of the fall semester dissecting and parsing something like the first 74 words of one of Shakespeare’s plays. He and the students would then recombine said words in most of the numerous possible permutations of same, and proceed to devote those several classes to rigorously examining each variation to see how it was different with regard to message, meter, etc. So that’s the background I come from. Perhaps needless to say, Lafayette College is not famous for graduating working
That person who wrote about the truck rate of 89 cents per mile needs ther head read. Having spent 28 years in the trucking industry I know of what I speak. First a driver today makes 45 to 55 cents per mile which leaves 44 to 34 cents per mile for the truck. With truck payments, insurance, licensing, fuel and maintenance I don’t see how a profit could be made. It is better to park the trucks and let the banks come and get them then it is to haul freight for less than your costs. I remember when President Jimmy Carter first deregulated the trucking industry and almost immediatly rates dropped dramatically and within about three years trucking company after trucking company closed there doors. But after that first three years rates began to climb to where they had been before deregulation and the trucking companies were once again making money. But even back then 1 dollar per mile was about as low as I saw it go. The Utah Jazz player Carl Malone drove truck in the off season and used it as a tax write off as he hauled Onions for 1 dollar per mile.
Other than Sufco #1 Mine which loads westward coal (but not eastward coal) at Levan (Sharp), Utah, on the LA&SL Provo Subdivision, it is all D&RGW origin stations or Utah Railway origin stations.
There is no intermodal on the D&RGW I know of, and manifest traffic is roughly 2-3 a day each way.
I shouldn’t get in the business of making forward projections.
Depending upon your politics, the Obama Administration can be characterized as “unreasonable and foolish” or “wanting to fully account for externalized costs, and allocate costs to those who create them” or “we’re all going to be saved now.”
[quote]
A fifteen percent reduction in carloadings is pretty major. Obviously with a service based economy we do not rely on heavy transportation services as much as say 50 years ago. We know that lumber and auto is significantly down, but both should have much easier comparisons going forward. RWM, are you saying that shippers are turning more to the rail
Well, that person that wrote about 89 cents per mile was me and the information was given to me from the VP Sales for a truckload carrier. I have every reason to believe her. I also have every reason to believe the CEO of a medium sized midwestern truckload carrier when he tells me the rates are lower than in 1980.
The “logistics” companies are managing freight movements and then letting the carriers carve themselves up competing for cash flow. One of the biggest trends in TL these days is Eastern European drivers…their labor costs and their work expectations are much different.
Regarding the Rio Grande coal movements, one of these days I gotta get out there and enjoy the mountains and the trains. Sounds like the Rio Grande is still active.
With strong loadings out of the valley in California, the challenge is to get back for another load. There is no doubt an inbalance of freight moving from California to SE, so the 89 cents would pay the fuel and some costs to return for a hopefully good paying load.