It may seem like there is an obvious answer to my question. But, please read on.
I was watching an interesting show about the Panama Canal last night. It was showing ocean liners carrying intermodal containers and it talked about the transit times of these ships.
Think about it:
The time it takes to transport the containers from the factory in China to an intermodal port, the time it takes to load these containers onto the ship, the time it takes for these ships to transport these containers several 1000s of miles at 15 knots, the time the ships spend waiting for a berth to open up in port, the time it takes to unload them, the time it takes to sort them, and then the time it takes to load them on the train.
It seems to me that the time saved by running the train at 60-65 mph instead of 40 mph is so meaningless compared to the overall time it takes to ship the container that the benefit is almost unnoticeable. It is like trying to save $1 by buying the small beer at a NFL football game after you have already spent $300 on the tickets and $200 on the other over-priced amenities.
Furthermore, running trains at significantly different speeds makes for greater dispatching problems and cuts into line capacity. I understand why some purely domestic trains, roadrailers, and UPS trains are run faster than normal, but Maserik intermodal containers? I don’t get it.
Hope to have an excellent discussion with everyone to make up for that other topic that the evil genius out smarted us all with . . . again.
What you say is true, Gabe, but I think the perceived notion of speed probably helps sales out a bit. With Merchandise, I think faster is always better. 60 mph probably looks a lot better than 40 mph to business people trying to sell their stuff.
Besides, the domestic stuff does have to move fast. If its logistically possible, why not extend that service to all intermodal customers? Here again, if nothing else, I think its a big selling point for shippers.
I kind of like the folks that were taking Acela instead of the Metroliners. Was the difference that big? Not really. Were there some people that could use the extra speed? Probably. Were there lots of others that bought Acela tickets because it was perceived to be the best despite what reality might dictate? I’m sure of it.
The only thing I want to know is what stadium you are buying $1 beers at! I usually pay about 5-6 times that at any venue I go to!
I meant $1 extra for a beer–i.e. buying the 16oz beer for $5 instead of the 24oz beer for $6.
Thanks for your contribution. I think perception is a likely culprit. Too bad, as there is so little difference in the actual time, I think the mere slowing of intermodal trains would add capacity to routes for less than free–as it would also save fuel costs.
Say a fast intermodal or truck’s speed of 60 mph makes the 1000 mile transit in 17 hours. Whereas the train’s speed of 45 mph makes the trip in 22 hours. Why on earth would the 5 hours amount to a drop in the bucket when compared to the WEEKS that is took to get the container on the train.
So what if trucks or a fast train gets it there 5-7 hours faster? It is still a 5-7 hour difference on a container that would take at least a week to get from the factory in China to the train. At best, you are looking at a 32/33rds difference in time, and I think that is being very generous.
Once again, I can understand the difference in a domestic, priority freight world (although I still think speed is over rated in that context too–from a percentage point of view), but when you are talking a bout a 1/33rd difference–at best–in time, you think it woudn’t be worth the cost of extra fuel and extra capacity to provide for that speed.
Perhaps, if you knew to whom I was sarcastically referring, you wouldn’t think I was losing my verticle hold on reality. But:
(1) Were Santa Fe’s experments done on containers that took weeks just to get to the train? My understanding is they were largely UPS and other domestic type freight. My whole point is why on earth would anyone pay for a faster five hours when it takes at least a week to get the container on the train in the first place.
(2) I have often wondered about this, since fuel is still much cheaper than it was in the 80s.
(3) I don’t really know how such contracts are shopped around, but I don’t see how any amount of shopping would make someone willing to spend a dime for a 1/33 improvement–to state the matter generously.
Probably because it takes so darn long to get everything ready at the port, sooner the better for an inbound to get there so they can get all the cards on the table.
If the ports could get more docks and workers to sort out the containers, speedy container trains would make more sense.
Even if they could get the container from the vessel to the train instantaneously, I don’t think my premise would change. The ocean liner does, at best 15 knots, over an incredible vast distance and sometimes have to wait outside the port for a bearth for a very long time. 5-7 hours compared to this time is NOTHING.
Having worked in the steamship industry my entire life I would say you are making some very poor ASSUMPTIONS. I would suggest you contact say a Hanjin/“K” line/APL/Maersk to see how they operate. In the North Atlantic try Maersk/Sealand. Also, no where did I see the words letter of credit mentioned in your post. That is what the consignee has taken out in favor of the shipper before the shipper will produce the goods ordered. Once the consignee takes out the L/C the amoint of that L/C is deducted from the consignee bank account immediately so that $$$$$$ is no longer available to payl bills/employees/etc. The consignee may have to take out a bridge loan which means they are also then paying interest to the bank. That is why consignees put so much pressure on the SS line to get the goods from point A to Point B ASAP. Also most L/C contain a clause that the goods must be shipped by a specific date or the L/C becomes null & void if the shipper gets a bill of lading dated after the L/C shipping date has past.
As has been stated, there are different intermodal market segments. Some require speed, others require less speed. All require good reliability. Reliability is the downfall of carload transport - and not much can be done about it.
On heavy volume intermodal lanes some railroads are able to seperate the segments. BNSF has several different classes of intermodal service and the customer gets what he pays for. Stack trains for international containers get less horsepower per ton because they’re not as time sensative as the UPS Z trains.
On lower volume lanes, such as Chicago-New Orleans, all the cargo must go on one train so segmentatiion is difficult. The railroad has to make a decision as to wether the incremental revenue from the business requiring the premium service covers the incremental cost of running the train at higher speeds.
There is a cost saving from speed. Equipment utilization is a key to intermodal profitability. Getting the flatcars to destination, unloaded and reloaded back out as quickly as possible does reduce the number of cars required and cuts the ownership costs for such equipment. This also applies to the domestic containers/trailers used in IM movements.
Again, this saving must be compared to the added cost of greater speeds.
Why must commuters in large pickup trucks roar down the interstate for 30 miles at 90 mph in the morning knowing they will be stuck in congestion as US 67 meets I40 and I30 for little Rock where everyone else is also going.
1000 miles takes about one day in a 18 wheeler. You forgot it can take a whole day or more to get unloaded and reloaded. So call it 3 days on that 1000 mile run.
Let’s extend your theory a bit further. I dont have the shipping numbers at hand but assume… Portsmouth England to Baltimore and then west to LA has got to be a *** sight faster than Portsmouth to Panama then up to LA.
I used to work the docks with containers to and from ships and noticed that explosive growth of container-on-rail that changed intermodal from the east coast to the west coast back in the early 90’s SeaGirt in Baltimore has a yard now where boxes are taken off ships and thrown onto trains really fast.
That train probably would arrive in LA while the ship is still negotiating the Canal down in central america.
Cape Horn at the tip of South America is a feared passage for Mariners and not really a good option.
Regarding the rest of the time lost … the freight sometimes sits in the warehouse for a few days upon arrival as arrangements are made for final delivery.
I theorize the life that I had when I would be given 10 days to get from Baltimore to California at 20 cents a mile in the early 80’s that allowed plenty of time to do the job right with meals, showers sleeping etc… and following the speed limits etc…(Err sorta)
Is not the life that I finished in 2001 with 4 day Baltimore to LA team runs stopping for nothing but fuel three times for a total of one hour the whole trip for .38 a mile. And emptying that 5th day AM, reloaded by dinner time and passing Flagstaff AZ by the end of the next day.
Life has speeded up alot. Look at the people who dont have time t
It’s a good quesiton. The sorta stupid answer is that it’s a trade-off between cost and value. Actually, the “sunk cost” of the trans-Pacific portion of the trip is irrelevant. What matters is the what’s the value to the customer versus your costs. If you go 40 intstead of 60, maybe you lengthen the time from port to shelves a day or two. What is the inventory carrying cost of that merchandise for another couple of days balanaced against how much you might save in shipping? For the RR, you slow down, now you need more equipment to move the same amount of stuff. That’s big bucks. You would save fuel, but enough to offset the extra equipment costs? And, enough to make up for the lower rates you’d have to charge to cover you customer’s increased costs?
Finally, many intemodal trains server multiple masters. They may carry UPS pkgs as well as empty steamship containers going back to port. While 40 mph might work OK for the empty steamship containers, delaying a sort or two for UPS would result in that taffic going to truck.
In practice, it isn’t too hard to mix 60 mph intermodal with 40 mph bulk traffic most places.
Hehe, I watched that too. I think I caught the late one because it was like 1 A.M. Anyways, did you also notice they called the locomotives there high-powered and able to put up to 35 tons? I don’t consider that too powerful, but thats just me… [:D][;)]
There was two on last night, were you watching the history channel or th
Having worked in the steamship industry my entire life I would say you are making some very poor ASSUMPTIONS. I would suggest you contact say a Hanjin/“K” line/APL/Maersk to see how they operate. In the North Atlantic try Maersk/Sealand. Also, no where did I see the words letter of credit mentioned in your post. That is what the consignee has taken out in favor of the shipper before the shipper will produce the goods ordered. Once the consignee takes out the L/C the amoint of that L/C is deducted from the consignee bank account immediately so that $$$$$$ is no longer available to payl bills/employees/etc. The consignee may have to take out a bridge loan which means they are also then paying interest to the bank. That is why consignees put so much pressure on the SS line to get the goods from point A to Point B ASAP. Also most L/C contain a clause that the goods must be shipped by a specific date or the L/C becomes null & void if the shipper gets a bill of lading dated after the L/C shipping date has past.
Wow, I have to role up my sleeves twice in the same day.
(1) Your comments have to be the biggest non-sequitor that I have ever seen in my entire life. Why didn’t you just say I got it wrong because I don’t like puppy dogs? What heck does a bill of credit—which, as an attorney, I am more than familiar with—have to do with the fact that the time a steamship takes to ship a container is so long that another 5-10 hours that is saved by doing 60 instead of 45 is insignificant?
(2) Hong Kong is 7233 miles from LA, and that is as the crow flies! Now, if I got it wrong, it was because I was WAY too conservative. You say that it can make the voyage in under a week? That is a remarkable claim, as—even if the ship did not have to go around any islands—the ship would have to make 45 knots to do that. I think the SS United States was capable o
They create as much revenue as coal, get them on down the line so we can get another in right behind it, and another, and another, and a coal train, and another, and another…
Thank you for some excellent responses. I think I now understand some of the reasons for what seemed to be an illogical practice. For purposes I will sum them up.
(1) Speed can be for the benefit of the railroad itself, because it minimizes the amount of containers used. This makes a lot of sense, and I am in no way taking issue with your contention. I am just asking for clarification:
Why don’t they do this with all trains then? Box cars, lumber carriers, and auto carriers would seem to cost more than a container. Also, with higer speed trains, wou
Didn’t the pre Conrail Split CSX tried to save fuel through that “Pace 40” program to all to trains ran at a max at 40 MPH. I heard it was big disaster. And Intermodals went back up to a 60 MPH max.
I think they found the biggest cause of delays and biggest place for cost savings was in the yards not on the road.
I believe and correct me if I am wrong that the UP runs loaded coal trains at 60 MPH on its Central Corridor to keep the line fliud with all that Intermodal traffic and expedited merchandise traffic such as that “Express Lane” service they run with CSX .
For only we had a sane transportation policy in this country and the RR would recieve gov’t infastructure funds to reinstall multitrack mainlines on all routes that see at least 20 GMTs a year and maintain them to at least FRA Class 4 standards. Maybe then we will see alot more 70 MPH freights and just on certain BNSF and UP routes.