Western Railroad Discussion > The End is Near for Railroad Intermodal?

Maybe not the end, but certainly a reduction in volume, with the advent of autonomous over-the-road trucks.

https://www.nytimes.com/2017/11/13/business/self-driving-trucks.html

The current level of technology appears to be almost ready for the long stretches to be done autonomously,
with a human driver to take over in cities and for the loading and unloading.

I haven't read anywhere that the RR's are concerned about intermodal volumes dropping and/or pricing power
being diminished. Certainly they must be...

Robert Pierce
Sugar Land, TX
SWRails.com

warren buffet has talked about this i believe, with flat tires, high winds , hail, snow, ice, they going to have to have dog catch crews?



Edited 2 time(s). Last edit at 11/13/17 21:53 by dan.

The technology for autonomous trucks and trains is close, but I think social and legal acceptance will take a while longer. Just think of the trial lawyers salivating over the first time one of them is involved in a fatal accident...
Anyway, once it does get started with trucks, I'd bet one-man crews on trains will be close behind.

TexBob Wrote:
-------------------------------------------------------
> Maybe not the end, but certainly a reduction in
> volume, with the advent of autonomous
> over-the-road trucks.
>
> https://www.nytimes.com/2017/11/13/business/self-d
> riving-trucks.html
>
> The current level of technology appears to be
> almost ready for the long stretches to be done
> autonomously,
> with a human driver to take over in cities and for
> the loading and unloading.
>
> I haven't read anywhere that the RR's are
> concerned about intermodal volumes dropping and/or
> pricing power
> being diminished. Certainly they must be...

The ppl who are concerned shud be truck drivers. This will cut into their work, not the RR's intermodal. A crew of 2 can take 160 boxes several hundred miles. There's not way "autonomous" trucks can compete with that between 2 endpoints. Trucks still us gas and have maintenance costs, and road use taxes. And what about the weather? No one has addressed if any of these self-driving vehicles can deal with weather.

"Black Ice takes caravan of self driving trucks skidding into housing development" I can't wait...

Trucking isn't just trucking. Take Ben (NS2557) for instance, he drives all over the country, rarely on the same route
to the same destination. Until you can program a driverless for every destination you're still going to have both local
and OTR drivers. The other fly in the ointment is going to be fueling, automatic fueling is going to take a while as is
the programming to get the truck to those specific service areas with that level of service. I can see Swift or Werner
on certain routes having use for driverless but all that's going to so do is maybe finally fix the driver shortage issues.

Out

The idea that autonomous trucks are going to single handedly kill off intermodal by rail is an absurd assumption that ignores other economic factors. Yes, automonous trucks will potentially eliminate the fixed cost associated with the driver, assuming all other bugs can be worked out (weather, political hurtles, etc.) Trucks, however still consume far more fuel per container than an intermodal train due to the basic laws of physics. Steel on Steel produces less friction than rubber on asphault. Fuel ranks consistantly higher than crew cost for both rail and trucking and autonomous trucks do absolutely nothing to address this problem. Next, we must consider that our interstate system is crumbling in many parts of the country and long distance trucking is simply becoming less feasable as a long term solution. Trucks have consistantly relied on the fact that they only pay for a portion of the damage they actually do to the roads. Yes, they pay very high taxes, but the tax base does not fully pay for the damage done. Either road taxes are going to have to rise dramatically or we are going to have major problems even maintaining the current system that we have. I absolutely hate this fact, as I hate taxation and find it to be disgusting and immoral. Regardless, basic economics are going to catch up to trucks eventually, even if they are autonomous. Diesel will not remain cheap forever and in the long run, I believe that railroads have the potential to capture an even greater market share of intermodal. First, there are a few major problems with our transportation system that need to be addressed. Railroads need to be rewarded for capital investment through a reduction in tax penalties. Personally, I feel that all new infrastructure/double tracks/ longer sidings need to be incentivized by reduced or eliminated taxation. Railroads pay 100% of their maintenance costs, with the exception of certain passenger corridors where the state shares the burden. Railroads pay property tax on ever inch of rail, spike, tie and frog. Currently it benefits the railroads to rip out tracks as it reduces their tax burden. If trucks were similarly made to bear the full burden of their damage to the highway system, much more of our long distance freight would be on rail, regardless of being autonomous or not. If new rail infrastructure was not taxed, we would most certainly see more of it as railroads added double track to allow for longer trains and faster service without the delay of sidings. More business would be driven away from our highways and trucking would be used for the shorter distance/time sensitive freight that could not be shipped by rail effectively. This subject is complex and I have barely scratched the surface, but on a side note, a repeal of the Jones Act could also cut into the trucking business as more domestic intermodal on our coastlines moved the the most efficient shipping method of all: Ocean. Why do we even have intermodal trucks or trains running from Los Angeles to Seattle hauling domestic loads when the coast line parallels the entire route? The Jones act is an anti-competitive legislation that allows only american built/flagged/crewed ships to haul cargo between US ports. This sounds great, other than the fact that we don't really build ships in America anymore and most large cargo ships are foreign. The consequence is that we haul less than 5 percent of our domestic freight via ocean, instead choosing to tear up our highway infrastructure with trucks. The issue of autonomous trucking and it's affects on the intermodal market is far more complicated than the simple elimination of a crew member and suggesting that the elimination of a driver would drive all business to trucks completely ignores other factors of our transportation system.

Great response, Mike!

Peter Arnold

There's a lot of wishing and hoping on many sides here. The companies, who drive their owner operators into poverty, claim they can't find drivers. And see these autonomous trucks as salvation. That's hogwash.

But the same attitudes that said "tandem trailers will never be allowed" are here, too. As several toll roads (NY Thruway, MassPike, etc) allowed them, other barriers fell within months. And electronic logbooks. Same thing with computer linked closely moving trucks at high speeds.

Hoghead Mike makes several good points. One of the best is that the point to point runs will likely be mapped and run first. End point drivers will board to complete the runs. The high volume end points will fall, the periphery may not be converted for a decade.

Digging in and resisting hasn't been an especially inspired choice over the past 500 years. But, the dock workers union showed how constructive engagement and lifetime employment guarantees can make progress and union work profitable together.

Hack the truck, drop the trailer, bring your own tractor and drive away with the whole trailer of stereos, firearms, TV's or computers, maybe just food. Wait until the driverless truck shows up at the terminal with no trailer.

Yep, high winds or ice and they all pull over to the shoulder and wait for instructions. Guess who will open the doors and rip off whatever they find.

If a 500-mile haul is the point where rail becomes more economical than trucking, then it will jump up to a higher number with driverless trucks (to 700 miles?).  It will certainly give the railroads a reason to reduce crew size to one or none to lower that number.  I could see the federal government saying we will have a liability pool that trucking companies will pay into for accidents on federal highways.  I could see a separate pool for passenger vehicles.  The feds could save a lot of money with driverless vehicles (or start with vehicles that communicate to reduce merging delays).  With less merging delay, less accident lookie-loos, and vehicles following just a few feet apart, capacity would increase so much that in most areas the current interstate lanes would become adequate for traffic.  With that kind of incentive, government will push for driverless and sell the public on the drive time reduction, more free time, gas savings and how "green" it is.


Per callum_out:Trucking isn't just trucking. Take Ben (NS2557) for instance, he drives all over the country, rarely on the same route to the same destination. Until you can program a driverless for every destination you're still going to have both local 
and OTR drivers. The other fly in the ointment is going to be fueling, automatic fueling is going to take a while as is 
the programming to get the truck to those specific service areas with that level of service. I can see Swift or Werner 
on certain routes having use for driverless but all that's going to so do is maybe finally fix the driver shortage issues.  

By the time trucks go driverless, will it be more difficult to program destinations than current directions on GPS?  Until there's automated fueling, couldn't they have the trucks drive to a station spot, then a fuel jockey would take over to fuel'em?  


per pdt:The ppl who are concerned shud be truck drivers. This will cut into their work, not the RR's intermodal. A crew of 2 can take 160 boxes several hundred miles. There's not way "autonomous" trucks can compete with that between 2 endpoints. Trucks still us gas and have maintenance costs, and road use taxes. And what about the weather? No one has addressed if any of these self-driving vehicles can deal with weather. 
"Black Ice takes caravan of self driving trucks skidding into housing development" I can't wait... 

If driverless vehicles communicate in the future (likely), weather-related accidents would be broadcast to them.  Sensors could be designed to park the truck when weather gets bad enough or when they are signaled that road conditions ahead warrant parking the vehicle temporarily.  The feds would require the communication ability and sensors if you were going to be on their highways, in their liability pool (see top paragraph).  I think driverless will be forced on us.  At first you might be forced into the slow lane without a driverless car, eventually you won't be allowed on the interstate.  Future generations might say, "Can you imagine?  Anybody used to be allowed to drive themselves!  How dangerous!" 

mapboy (resists GPS, ask the wife)

mapboy Wrote:
-------------------------------------------------------
> If a 500-mile haul is the point where rail becomes
> more economical than trucking, then it will jump
> up to a higher number with driverless trucks (to
> 700 miles?).


I disagree. I really think that eventually, anything over around 400 miles will be required to be on a train, with the exception of high priority/expedited/specialty loads that need to be on a truck. One day the reality of trucking will come to roost. Trucking is indirectly subsidized, which gives it a competitive advantage against trains. Take this away and trucking hits a brick wall when diesel fuel rises above 5 dollars per gallon, with or without autonomous trucks. Take into consideration that we are headings towards a serious highway infrastructure crisis within 20 years and trucking simply doesn't seem as competitive.

This being said, our railroads are a joke. We invest in highways and tax railroads in this country and at the present, railroads would not be able to handle a major boost to traffic. We subsidize trucking and outlaw use of our oceans. Regardless, our system is unsustainable and long distance trucking is simply unsustainable in the long run. But, who knows, Congress can't even pass a budget, let alone a major overhaul of our transportation system. We might just let our infrastructure crumble and be eclipsed by the rest of the world.

I'm all for letting transportation systems compete on a free and level playing field. Lets eliminate subsidies for Trucking and let the railroads invest in infrastructure without using them as a cash cow for taxes. Neither industry carries the burden of excessive taxation and let the more efficient technology win. Trucking will fall flat on it's face if it has to pay it's own way.



Edited 1 time(s). Last edit at 11/13/17 17:00 by HogheadMike.

As the Times article noted, the vast majority of traffic accidents are caused by human error. Taking the human factor out of the operation will reduce accidents, not increase them.

HogheadMike Wrote:
-------------------------------------------------------
> mapboy Wrote:
> --------------------------------------------------
> -----
> > If a 500-mile haul is the point where rail
> becomes
> > more economical than trucking, then it will
> jump
> > up to a higher number with driverless trucks
> (to
> > 700 miles?).
>
>
> I disagree. I really think that eventually,
> anything over around 400 miles will be required to
> be on a train, with the exception of high
> priority/expedited/specialty loads that need to be
> on a truck. One day the reality of trucking will
> come to roost. Trucking is indirectly subsidized,
> which gives it a competitive advantage against
> trains. Take this away and trucking hits a brick
> wall when diesel fuel rises above 5 dollars per
> gallon, with or without autonomous trucks. Take
> into consideration that we are headings towards a
> serious highway infrastructure crisis within 20
> years and trucking simply doesn't seem as
> competitive.
>
> This being said, our railroads are a joke. We
> invest in highways and tax railroads in this
> country and at the present, railroads would not be
> able to handle a major boost to traffic. We
> subsidize trucking and outlaw use of our oceans.
> Regardless, our system is unsustainable and long
> distance trucking is simply unsustainable in the
> long run. But, who knows, Congress can't even
> pass a budget, let alone a major overhaul of our
> transportation system. We might just let our
> infrastructure crumble and be eclipsed by the rest
> of the world.

I'm pessimistic about the playing field being leveled for railroads vs. trucking.  It would make for a more efficient system, but the trucking lobby is so much bigger, and many railroads are not making friends out of their shippers with price gouging and arbitrary service.

mapboy

> I'm pessimistic about the playing field being
> leveled for railroads vs. trucking.  It would
> make for a more efficient system, but the trucking
> lobby is so much bigger, and many railroads are
> not making friends out of their shippers with
> price gouging and arbitrary service.
>
> mapboy


You make a very good point. The railroads are by no means innocent in their epic greed and unreasonable operating ratio targets despite the customers. Why are railroads essentially a duopoly? We essentially have two major carriers on the east coast and two on the west. Why did this happen? It happened for the same reason that airlines have consolidated to such an extent since 9/11. We used to have dozens of air carriers, yet now over 80% of our passenger airline traffic is controlled by United, Delta, Southwest and American. Very little competition and horrible service that gets worse and worse by the day. It all comes down to excessive regulatory burden. We did it to the railroads and we are doing it to the airlines. The regulatory burden is so great that only the large carriers can exist and the smaller ones are driven out of business. The regulatory barriers to entry are so high for railroads and airlines that no new railroad or airline can enter the market, even with massive financial backing. Did you know that it is even illegal for foreign airlines to fly domestic routes in the USA? That is why we don't have competing flights from foreign carriers from LAX to ATL for example. It's simply not allowed. Railroads are the same way. The big railroads quite literally wrote the interstate commerce act that regulated themselves and by the end of the 20th century, the regulatory burdens had driven out all of the little guys and enriched the large carriers like UP. Again, the blame for poor service lies with our government, which panders to the whims of lobbyists, regardless of whether they have a "D" or an "R" in front of their name.

Hell, maybe the entire situation is unfixable. Either way, autonomous trucks will not fix the fact that trucks are expensive and inefficient to operate and can't exist without subsidized highways and cheap diesel. I love how some congressman love to rant about Amtrak's very real, yet very meager subsidies, while completely ignoring the giant welfare case which is the trucking industry. It's even worse in agricultural states such as Idaho where I live. Farmers are the biggest welfare cases around with excessive weight trucks and tractors tearing up our highways and CRP fields in which the government pays them not to farm.



Edited 2 time(s). Last edit at 11/13/17 17:19 by HogheadMike.

HogheadMike Wrote:
-------------------------------------------------------
> > I'm pessimistic about the playing field being
> > leveled for railroads vs. trucking.  It would
> > make for a more efficient system, but the
> trucking
> > lobby is so much bigger, and many railroads are
> > not making friends out of their shippers with
> > price gouging and arbitrary service.
> >
> > mapboy
>
>
> You make a very good point. The railroads are by
> no means innocent in their epic greed and
> unreasonable operating ratio targets despite the
> customers. Why are railroads essentially a
> duopoly? We essentially have two major carriers
> on the east coast and two on the west. Why did
> this happen? It happened for the same reason that
> airlines have consolidated to such an extent since
> 9/11. We used to have dozens of air carriers,
> yet now over 80% of our passenger airline traffic
> is controlled by United, Delta, Southwest and
> American. Very little competition and horrible
> service that gets worse and worse by the day. It
> all comes down to excessive regulatory burden. We
> did it to the railroads and we are doing it to the
> airlines. The regulatory burden is so great that
> only the large carriers can exist and the smaller
> ones are driven out of business. The regulatory
> barriers to entry are so high for railroads and
> airlines that no new railroad or airline can enter
> the market, even with massive financial backing.
> Did you know that it is even illegal for foreign
> airlines to fly domestic routes in the USA? That
> is why we don't have competing flights from
> foreign carriers from LAX to ATL for example. It's
> simply not allowed. Railroads are the same way.
> The big railroads quite literally wrote the
> interstate commerce act that regulated themselves
> and by the end of the 20th century, the regulatory
> burdens had driven out all of the little guys and
> enriched the large carriers like UP. Again, the
> blame for poor service lies with our government,
> which panders to the whims of lobbyists,
> regardless of whether they have a "D" or an "R" in
> front of their name.
>
> Hell, maybe the entire situation is unfixable.
> Either way, autonomous trucks will not fix the
> fact that trucks are expensive and inefficient to
> operate and can't exist without subsidized
> highways and cheap diesel.

Good points, but the biggest reason for so few rail and air carriers is the pricing power that goes with limited competition.

mapboy

The law restricting foreign ownership of airlines operating between US points (a domestic Jones Act) has often been cited as protecting national security. Most US carriers own / lease some planes with federal assistance conditioned on making their planes and crews available for military use. During the lead up to the 1991 Gulf War, a large number of planes were diverted for troop transport to the mideast.

An airline operating in the US, but controlled by Aeroflot or China Eastern, might relocate its planes before it made them available to the US military. "US companies" like Ford, GM, IBM, MGM, Coca-Cola etc made their facilities and staff available to the Nazi Wehrmacht with varying amounts of resistance.

How many horrible things have been done under the umbrella of "National Security." They really can get away with just about anything using that excuse. The real word we should be calling it is "protectionism," or in plain terms, a peacetime blockade that attempts to do to us what the enemy would do to us during a time of war.

In the article I noted Electrolux was shipping finished product from El Paso to So. Cal by truck. A haul of this length would seem to be very favorable to intermodal. Is the UP service so bad the customer chooses to go all truck?

Yes, I would highly recommend a recent article in trains magazine called "The cult of the operating ratio." Union Pacific is relying on a smaller and smaller customer base while keeping their rates high. Every year they beat BNSF in revenue but BNSF beats the pants of of UP when it comes to business growth. UP seems to have one primary customer, and that is the stock market. BNSF, being a subsidary of Berkshire Hathaway cares less about operating ratio and focuses more on real business growth. When the next market bubble pops and UNP shares dip below 50 dollars per share again it would not suprise me at all if they start to see some serious financial problems that lead to a bankruptcy (as UP has already seen before) or a buyout by another large firm as BNSF saw.

Lackawanna484 Wrote:
-------------------------------------------------------
> The law restricting foreign ownership of airlines
> operating between US points (a domestic Jones Act)
> has often been cited as protecting national
> security. Most US carriers own / lease some planes
> with federal assistance conditioned on making
> their planes and crews available for military use.
> During the lead up to the 1991 Gulf War, a large
> number of planes were diverted for troop transport
> to the mideast.
>
> An airline operating in the US, but controlled by
> Aeroflot or China Eastern, might relocate its
> planes before it made them available to the US
> military. "US companies" like Ford, GM, IBM, MGM,
> Coca-Cola etc made their facilities and staff
> available to the Nazi Wehrmacht with varying
> amounts of resistance.

Those airliners were part of the CRAF, Civil Reserve Air Fleet, the airlines volunteer for this, they are not forced.
The government pays them very well for this. The crews are volunteer too.