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Old 11.13.2009
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Railroads, But Freight Eventually Will Move Back to Truck

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Summary

How solid is the case for intermodal rail? Is it merely the flavor of the month, or can be be an honest-to-goodness, legitimate alternative to all-truck movements of surface freight? Analysts are touting intermodal rail, but how important and encompassing can rail transport be to U.S. shippers?

Analysis

Intermodalism--in this case trucks and containers and rail--is all the rage what with Warren Buffett's investment of $26 billion to buy the Burlington Northern Santa Fe Railway. Major trucking companies such as J.B. Hunt, Schneider National and, to a lesser extent, Knight Transportation and Werner Enterprises also are sticking their toes in the intermodal waters.
But how much freight, really, is going to be moved out of reliable, 53-foot dry van trailers and onto intermodal rail?
The dirty dark little secret: not much.
Because of rail's limited scope--and, most importantly, shoddy service--intermodal rail is not that much of an option for a vast majority of today's all-truck shippers. I estimate as many as 90 percent of all-truck shippers today have no viable rail alternative.
Sure, rail is fine on 1,500-mile lengths of haul from, say, Chicago to Los Angeles or Chicago to Portland. Chicago to Dallas is another good route.
But suppose one wants to go from a company's distribution center in Central Pennsylvania--say, York, Pa.--to Cleveland. Is that going to go by rail? No way. Nor is a lot of the other all-truck freight being hauled today by the likes of UPS Freight, FedEx Freight, Con-way and other LTL providers.
Intermodal rail accounts for less than 1 percent of the nation's $680 billion freight bill. True, it is a growing sector, but not by much. During the recent recession, when fuel prices ticked below $2 a gallon once again, intermodal shippers fled the space like there were locusts on those locomotives.
According to the Association of American Railroads, the rails' own trade association, U.S. rail intermodal traffic was off 14.6 percent year-over-year in September, on top of the 16.4 percent y-o-y decline in August
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http://www.glgroup.com/News/Flavor-o...uck-44788.html
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Old 11.14.2009
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I disagree with this article. I haul intermodal, so yes I have a dog in the fight, but some of their examples are off base. We get a ton of loads that originate out of the Chicago intermodal yards coming into Denver. Many of them come from Wisconsin.

We do 3 loads of Kikkoman per year to the Sysco Foods in Billings, Mt. It's cheaper for them to ship it on truck to Chicago, out the domestic container on a train, ship it to Denver, then have us truck the container to Billings. Mileage wise, it's closer for them to do it via truck direct, but it's not cheaper. We also get a lot of stuff that comes from K.C., Dallas, SLC, and Houston as well.

Also, the LTL's rely heavily on rail, both railroads run what is called a Z-train, it's priority train, used mostly by UPS, YRC, and USPS, but they will throw some other stuff on there as well. During most of the year, the z-train runs about 30 to 40 cars, this time of year, it's not uncommon to see a 100 car z-train. The BNSF runs two per day through Denver, once in the middle of the night, the other in mid afternoon, the UPRR runs one per day through Denver, they are hot trains, the ramp has two hours to turn the train and if it's in town, everything else on the ramp stops while that train is being worked.

Where the article has it correct is with the current cheap fuel prices, but if fuel starts going back up, you'll see more freight switch to intermodal. The downside to that is that while the truckign companies can all compete with FSC prices, the railroads don't compete and can raise the FSC whenever they want and you have no recourse.
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Old 11.14.2009
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Don't forget to factor in moving freight by barges and cargo ships on inland waterways and along the coasts . While this link shows the fuel savings and lower emissions using inland waterways , savings by larger ships for coastl shipping would be greater . [LINK POSTED BY MEMBER] Only Members Can View This Truck Forum Link.
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Old 11.16.2009
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Allot of the problem with switching more to inter model has to do with how company's are set up at the moment.
They went more and more to JIT freight over the last 15 years. This will need to change allot before rail can really make a big dent in truckload.
It takes more time for anything to be shipped on a train.
I think that there will be more products going by rail in the future, but there are also more and more people in this country to buy the products. So thus there will be more volume of freight.
These 2 will lvl out allot.
More and more company's are going to regional operations. They will be using this area of operations base to move the freight coast to coast using several trucks much more often than in the past.
Coast to coast truckload will become a team thing.
Solo drivers will become shuttle drivers. Bringing freight from shippers to drop lots, so that another driver can bring to the next lot or to receivers.
Overseas dry goods will go from port to rail. Then to regional hubs for transport to receivers. (also regional)

This move can be good or bad for trucking, depending on how the company is set up.
If they have a good grid of terminals set up in there area of operations I think the company's will see higher profit margins, as the trucks will be sitting less and having better utilization of there equipment and drivers.
It can also be better for the drivers. Since they will get more home time working in a region, and can thus get better utilization of there hours of service.
Sure, on many goods the rail will move the major miles. But the regional guys will be hauling the freight in an area of 600 miles or less. Thus with proper planning can move one or more load a day in that area.

I looked at all of this before I started looking for a company again. I had to leave my last one due to the downturn.
I wanted to find a company that I believed was set up well for future operations.
The company I went with is set up very well for regional ops. They operate primarily east of the rockys, and have a very good grid of terminals for productive regional operations.
Once people are buying again, the freight should be at a higher volume than any time in the past. In a few years it will take all the trucks and trains we can get to move the freight.
Just at the moment we have over capacity for the volume. But with company's closing and drivers leaving the industry this will change.
I do not worry too much about all the new trainees. In the short term they are hurting my miles, but the vast majority will not be here in a year. So I am not too worried about them.
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Old 11.16.2009
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Quote:
Originally Posted by striker View Post
Where the article has it correct is with the current cheap fuel prices, but if fuel starts going back up, you'll see more freight switch to intermodal. The downside to that is that while the truckign companies can all compete with FSC prices, the railroads don't compete and can raise the FSC whenever they want and you have no recourse.
I agree with a lot of your post. But the RR's do impose FSC's. And they have been sued for the way they use it.

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Old 12.10.2009
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Yeah intermodal is hot right now,but tonage numbers are no where neare,truck tonage. I run into the Chicago ramps,from Wi., a little Iowa. It,s harder work than otr,which I think is to messedup right now. I never wait for a load, might run 5 in a row Milwaukee to South side Chicago, where most of the rail yards are. It,s all about staying busy right now,and wait it out until the freight and rates blow up. Then get your authority,truck,trailer and make that fat cash. haha I,m getting 20 for d-h and 30 for bumping a dock, I have not been payed for that in over 3 years so that feels good to get pay for the work I do.
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