Western Railroad Discussion > Continuing Alameda Corridor (LA) Financial Problems

http://www.dailybreeze.com/general-news/20160924/alameda-corridor-dream-becomes-financial-nightmare-for-los-angeles-and-long-beach-ports

Note the "California Zephyr" in the photos (actually Silver Solarium and/or Silver Lariat).  These cars along with Silver Rapids regularly transit the Corridor either on charters or deadhead between LAUS and their base in Wilmington.

Rambling (at best) thoughts:

First, as long as freight railroad projects must be paid for by user fees when OTR trucking fees (fuel, weights, tolls, etc) do not come even close to covering true road use impacts of trucks (primarily related to physical impacts but also for congestion and service facilities), AND public funds for roads are no-risk for OTR while railroads must include risk costs in their funding sources, railroads are at a major disadvantage on infrastructure funding and, thus, speed and service relative to OTR.  Some form of parity in costs for infrastructure must be developed between modes or the disadvantage will never go away.  Having railroads be responsible for paying back all of these costs when modal competitors are not has been a major factor in rail's ability to compete.

Second, from the easy chair of twenty-twenty hindsight, assuming that the import growth would continue at the high levels ad infinitum never seemed quite realistic.  Manufacturing trends, goods movement trends, consumer preferences and an ever-changing world would suggest that the only thing constant is change.  Future corridor improvements (anywhere) might want to look at much shorter payback periods simply to factor in that change most likely will occur.  A conservatie approach to infrastructure spending by railroads has been financially prudent for them: UP seems to have done that with its Sunset Route double-tracking (still quite a ways from being complete, having slowed down during the Recession).  Years ago when attending a meeting with UP for development of a new intermodal ramp, we were told if it didn't have a 5-year payback they would not undertake it (and thus didn't).  Seventeen years later it appears that was a poor long-term vision on their part from a traffic-generation standpoint, yet when viewing UP's financials (especially during the Recesion) that conservatism seems to have worked. 

Bruce

StStephen Wrote:
-------------------------------------------------------
> Second, from the easy chair of twenty-twenty
> hindsight, assuming that the import growth would
> continue at the high levels ad infinitum never
> seemed quite realistic. 

> Bruce

Yes never was realistic.  Additionally some ports have been under tremendous pressure from environmental groups to stop handling (or don't handle) pet coke and coal exports (mostly) and some, like the Port of Oakland, have buckled under to the pressure.  But that is not realistic long term and forces ports to rely on import/export container growth.  Now with so many maritime companies in a world of hurt ports are wringing their hands wondering what the consequences will be.  It's why the Port of Oakland has a very questionable long term future unless they get their butt in gear and quickly.  This is what happens when you put all your "eggs" in one basket.  Not a smart business plan.


Allen



Edited 2 time(s). Last edit at 09/25/16 13:07 by bradleymckay.

In 2001, 45% of the marine boxes imported at San Pedro Bay got on a train to leave the LA Basin. (Back in the early 1990s, it was well over 50%.) Now, 35% do. The ports and their consultants did not see that coming when the Corridor was put in motion.

More importantly, a present, the imports in an additional 41% of the TEUs imported at San Pedro Bay eventually get on a train to leave the LA Basin, but when they do they are housed in a domestic container.

Roughly half those domestic container loads of imported goods are generated close to the ports at 3PL cross-docks and half are generated at OEM distribution centers or consolidation centers in the Inland Empire. The half that are generated close to the ports by and large do not ride the Corridor; instead, they are trucked up to the downtown ramps. That is a huge, missed opportunity for the Corridor folks. In fact, if the half of domestic container loads generated close to the ports were riding the Corridor, I am sure the Corridor folks would have no trouble retiring their bonds. In fact, they could retire them early. 

The railroads see no return for them to make an effort to get the domestic trans-loads onto trains at the bottom of the Corridor instead of at the top. They are right: the benefits from doing that would go to the importers and to the Corridor folks, not to them.

This is a great example of the fundamental problem of supply chains with multiple participants. When each participant acts to optimize its return, the result is typically not what is best for the overall chain. That is only possible with changes in the contractual terms so that when one participant does something that improves the overall chain, enough of the benefits flow to them to make it worth their while.

Best regards,

Rob L.

If it is only at 25% capacity how about extending some Amtrak trains south?  The South Bay is a huge untapped intercity market. 

Todd Clark
Canyon Country, CA
Trainorders.com

Reading all the comments about the financial conditions that exist or will exist, I did not see any mention of the recent opening of the now widened Panama Canal. That in itself seems to me to be the biggest problem with moving Asian containers through any western ports from Washington to California that are targeted for delivery to Eastern destinations. As a matter of fact, Eastern ports from Maine to Florida are gearing for increased volumes of traffic.

Jim
​Hatboro, PA

Chooch Wrote:
-------------------------------------------------------
> Reading all the comments about the financial
> conditions that exist or will exist, I did not see
> any mention of the recent opening of the now
> widened Panama Canal. That in itself seems to me
> to be the biggest problem with moving Asian
> containers through any western ports from
> Washington to California that are targeted for
> delivery to Eastern destinations. As a matter of
> fact, Eastern ports from Maine to Florida are
> gearing for increased volumes of traffic.
>

By itself, the expanded Panama Canal does absolutely nothing to change the equation. Add in all the expansion of the Eastern ports, still does absolutely nothing. In fact, since the expanded Canal opened, there has been zero increase in the share of Far East - Asia imports moving via the Canal.

The distribution of imports between West Coast ports and Gulf + East Coast ports is not decided by the steamship lines. They sell all-water service through the Canal and various services via West Coast ports as separate products. The distribution is decided by the importers based on price (primarily), service (to a lesser extent), and risk mitigation. The only real lever the steamship lines have for shifting the share of imports moving via the Canal is price. It is not at all clear if it is in the steamship lines' best interests to lower the price of all-water services. Given the dire financial condition of the lines, I wouldn't look for that to happen anytime soon.

It is true that over the last decade the Canal has picked up share of Far East - USA imports. (It moved up from 23.2% to 32.7%.) This has largely come at the expense of Oakland, Tacoma and Seattle ports and less at the expense of the San Pedro Bay ports. The reason the San Pedro Bay ports are more insulated from competition is because as imports become more expensive, a larger share of imports are best imported by OEMs through San Pedro Bay instead of by retailers through both West Coast and East Coast ports. For expensive goods, the inventory economies of consolidating imports through a single port outweighs the transportation economies of dsitributing imports across the cheapest transportation channels to various destinations. (If you are not sure yet where you can sell the stuff first, but you have to ship from Asia now, then finding the cheapest routes to various places doesn't help much and in fact may be a big mistake.)

Put another way, the cheap stuff goes through the Canal and through ports like Prince Rupert and Vancouver. The expensive stuff moves through San Pedro Bay. The moderate-value stuff moves through both. As imports get more expensive across the board, guess who wins.

Best regards,

Rob L.

That all assumes that the Canal gets it's issues worked out, and the traverse cost doesn't go up any further
than it already is, time will tell. I think the next head scratcher will be how to get from the port to the desert
on zero emissions as the state comes up with some new regs to cut down on those nasty rail pollutants, not
to mention those coming from those foul ships sitting out there. So the question is, will the state shoot itself
in the foot before all this gets sorted out?

Out

callum_out Wrote:
-------------------------------------------------------
> That all assumes that the Canal gets it's issues
> worked out, and the traverse cost

You mean transit cost.

> doesn't go up
> any further
> than it already is, time will tell. I think the
> next head scratcher will be how to get from the
> port to the desert
> on zero emissions as the state comes up with some
> new regs to cut down on those nasty rail
> pollutants,

A better way to reach the state's goals is to get the domestic boxes on the trains without trips on the freeway. That will reduce emissions far more that another Tier on the locomotives would ever do.

> not
> to mention those coming from those foul ships
> sitting out there.

The fix is well under way. Cold ironing (using shore 480V power) is now in effect at several terminals, with more coming soon. And all vessels are required to slow down and switch to cleaner burning fuel once they are 20 miles out.

> So the question is, will the
> state shoot itself
> in the foot before all this gets sorted out?

The state's regulations have been a huge positive. California is way ahead of the rest of the world. It will be a positive for imports, not a detractor.

Best regards,

Rob L.

 

Rob, we can all hope you're right but I think you're putting too much trust in politicians.

Out

callum_out Wrote:
-------------------------------------------------------
> Rob, we can all hope you're right but I think
> you're putting too much trust in politicians.
>

The current laws are good. The current politicians, not so much.

Best regards,

Rob L.

Todd I like your thinking, I along with many other including Bart Reed have been on board for years with Metro Link or Amtrak coing to the South Bay.  The Harbor Sub would have been a graeat connection to the LAX airport. But with the Crenshaw line they have blocked access through Inglewood.



Edited 1 time(s). Last edit at 09/25/16 17:23 by czuleget.

For actual train counts, the corridor is currently averaging 35 trains a day (according to the Corridor's website).  This is the lowest average since the corridor was opened.

•UP averages about 20 trains
16 stack trains (about 10 from ICTF and the rest from the docks)
2 manifest (MWCLB and MLBWC)
~1-2 unit trains (Wunpost oil or export coal)
~1 baretable train 
Power moves or autorack repo moves are also common.

•BNSF averages about 15 trains
12 stack trains 
2 manifest (H BARWAT and H WATBAR)
~1 ethanol train and or baretable train

Andrew
 



Edited 1 time(s). Last edit at 09/25/16 17:28 by florida581.

florida581 Wrote:
-------------------------------------------------------
> For actual train counts, the corridor is currently
> averaging 35 trains a day (according to the
> Corridor's website).  This is the lowest average
> since the corridor was opened.
>
> •UP averages about 20 trains
> 16 stack trains (about 10 from ICTF and the rest
> from the docks)
> •BNSF averages about 15 trains
> 12 stack trains 

Even if from the Corridor web site, these stack train counts are not right. For the intact-in-marine-box intermodal (AKA IPI), BNSF has about a 65% share and UP has about a 35% share. Considering both roads, in 2015 76% of the IPI boxes were loaded at on-dock terminals, 17% at ICTF and 7% downtown (the latter not using the Corridor). Many of the UP moves starting on-dock stopped at ICTF for a fill or for touch-up switching, so that maybe why the Corridor's web site shows such a silly high count for ICTF.

Best regards,

Rob L.

The new this morning stated that the ports had there highest numbers todate at the ports of LB and LA. 

I got my ATCS updated and logging, so I'll see what it shows for the BNSF vs. UP train count at Redondo.  Without a webcam to visually check the trains, we'll have to keep in mind the non-intermodal trains mentioned by Andrew above.  I will be able to count how many trains come off the corridor and head for Watson Yard.  I plan to run it over several days, so check back in a few days for results.

mapboy

In the 24 hours from 1100 Tu 9/27/16 to 1100 We 9/28/16 (part of the holiday peak season), at West Redondo, where UP and BNSF lines merge into the Alameda Corridor, there were:
BNSF 10 west + 12 east= 22 trains
UP       7 west + 10 east= 17 trains
Total  17 west + 22 east= 39 trains 

The above count included 4 manifests- BNSF HWATBAR1 and HBARWAT1; UP MLBWC and MWCLB. 

There were 6 moves into/out of BNSF's Watson Yard via BNSF Xing (AC 157), 2 were the above manifests, the other four could have been ethanol or empty intermodal equipment.  Loaded intermodal trains make infrequent use of this route.  I would estimate at West Redondo BNSF ran 16 loaded intermodal trains and 6 other trains. 

The ODOWP empty oil train reportedly left Main St. near downtown L.A. at 11:50 on Tuesday.  I will verify tomorrow by playing back the log to see if there was a train after 1100 that went up the East Bank Line from Ninth St. EDIT: It was not included in the UP train count.

For comparison, BNSF at Hobart Yard (LAC) in the same 24 hours had:13 west + 11 east= 24 intermodal trains, compared to an estimated 16 intermodal trains to/from the harbor. 

UP uses LATC (LC) and L A Yard (LA) for their non-harbor intermodal trains, with many stopping at both yards, and so it's harder to narrow down how many trains ran out of those two terminals.  

I plan to log for several days, so I don't want to spend too much time following train moves until after the logging is done.  I can't log while I'm playing back a log, counting and following trains.  After logging is done, I will spend more time determining which trains were unit trains, intermodal empties, etc. to get a more accurate count of loaded intermodal trains.

mapboy


Here's the next set of train counts, for the 24 hours from 1100 We 9/28/16 to 1100 Th 9/29/16, at West Redondo:
BNSF  8 west + 10 east= 18 trains   Loaded intermodal trains 5 west + 9 east= 14 trains
UP    12 west + 11 east= 23 trains   Loaded intermodal trains 10 west + 10 east= 20 trains
Total 20 west + 21 east= 41 trains   Total loaded intermodal trains 15 west + 19 east= 34 trains 

The above count included BNSF manifests HWATBAR1 and HBARWAT1, and two empty intermodal trains.  The last four trains were seen on the Cajon webcam during daylight, so there could be others that went by after dark.  There could also be empty intermodal trains included in the count from places west of the webcam, but this is the best estimate I can get.  The UP count includes manifests MLBWC and MWCLB and a wbd. UP coal load.


24 hour train count from 1100 Th 9/29/16 to 1100 Fr 9/30/16, at West Redondo:
BNSF 11 west + 9 east= 20 trains   Loaded intermodal trains 8 west + 7 east= 15 trains
UP     10 west + 8 east= 18 trains   Loaded intermodal trains 6 west + 5 east= 11 trains
Total  21 west + 17 east= 38 trains Total loaded intermodal trains 14 west + 12 east= 26 trains on Alameda Corridor

The above count included BNSF manifests HWATBAR1 and HBARWAT1, a loaded and an empty ethanol unit train and an empty intermodal train.  The UP count includes manifests MLBWC and MWCLB and an ebd. lite-power move, an empty auto rack repo from Mira Loma AMLDOR, an empty coal train, and two empty intermodal trains.

BNSF LAC (Hobart Yard) 8 west + 13 east= 21 intermodal trains
BNSF SBD (San Berdo.)  5 west + 6 east= 11 intermodal trains
BNSF West Redondo       8 west + 7 east= 15 intermodal trains
BNSF total                   21 west + 26 east= 47 loaded intermodal trains


24-hour train count from 1100 Fr 9/30/16 to 1100 Sa 10/1/16, at West Redondo:
BNSF West Redondo 11 west + 10 east= 21 trains
UP West Redondo     14 west + 12 east= 26 trains  
Total                       25 west + 22 east= 47 trains


24-hour train count from 1100 Sa 10/1/16 to 1100 Su 10/2/16, at West Redondo:
BNSF West Redondo 13 west + 13 east= 26 trains
UP West Redondo     12 west + 9 east= 21 trains
Total                       25 west + 22 east= 47 trains


24-hour train count from 1100 Su 10/2/16 to 1100 Mo 10/3/16, at West Redondo:
BNSF West Redondo  6 west + 6 east= 12 trains
UP West Redondo    10 west + 8 east= 18 trains
Total                      16 west + 14 east= 30 trains



24-hour train count from 1100 Mo 10/3/16 to 1100 Tu 10/4/16, at West Redondo:
BNSF West Redondo 10 west + 8 east= 18 trains
UP West Redondo     10 west + 8 east= 18 trains
Total                       20 west + 16 east= 36 trains


Totals for the week-
BNSF  69 west + 68 east= 137 trains     Daily average BNSF   9.9/day west + 9.7/day east= 19.6/day
UP      75 west + 66 east= 141 trains     Daily average UP     10.7/day west + 9.4/day east= 20.1/day
Total 144 west + 134 east= 278 trains   Daily average         20.6/day west + 19.1/day east= 39.7/day

Now I need to do go back and take out the moves that were not loaded intermodal trains.

mapboy



Edited 5 time(s). Last edit at 10/05/16 13:03 by mapboy.