Western Railroad Discussion > PSR is hitting the fan with shippers

A hearing with the feds and shippers has had to be extended from one day to two as shippers line up to raise hell about PSR and excessive charges and demands from railroads.  From what they say shippers probably will get the feds attention.  It is a very interesting read.
http://trn.trains.com/news/news-wire/2019/05/10-shippers-complain-to-regulators-about-psr-related-charges?utm_source=Yesmail&utm_medium=email&utm_campaign=News0_TIN_190517_00000

“Customers can make decisions to decrease their demurrage charges by configuring their facilities to increase track capacity, improving loading or unloading times, or operating seven days a week,” Derek Taylor, vice president of CN’s Southern Region, wrote to the STB.

What a bunch of crap. A shipper sends cars a few at a time to accommodate the receiver's plant layout, the railroad delivers them all on the same day, and then blames the customer for congestion and unloading problems and suggests they can rebuild their sidings' layout or call workers in on extra days to cover for their lousy service? No wonder railroad shippers hate the railroads.
 

Some customers can make the decision to change their choice of shipping methods, too..

Satisfying customers and growing business is a lost art in some places.

Posted from Android



Edited 1 time(s). Last edit at 05/17/19 11:15 by Lackawanna484.

True. If I were a shipper, I'd be looking at alternatives and I'm sure that those are not completely captive shippers already are.

Lackawanna484 Wrote:
-------------------------------------------------------
> C
> Some customers can make the decision to change
> their choice of shipping methods, too..
>
> Satisfying customers and growing business is a
> lost art in some places.
>
> Posted from Android

Yep! Streamlining operations to get a better operating ratio, thereby increasing return to stockholders is all well and good...until you overdo it and have chased away your customers and the revenue stream is no longer there to support your infrastructure. Then your profitability and return to investors is shot to hell. 
Look at how hard the rr's had to work in the late 60's to get back customers they pissed away! 

KC - Profit is not a dirty word...obscene profits is...

toledopatch Wrote:
-------------------------------------------------------
> “Customers can make decisions to decrease their
> demurrage charges by configuring their facilities
> to increase track capacity, improving loading or
> unloading times, or operating seven days a
> week,” Derek Taylor, vice president of CN’s
> Southern Region, wrote to the STB.

I get it - the railroads' customers are to increase their costs, pass them on to their customers, all to benefit the railroads' shareholders. But what if just one big road says "nuts" to this and continues to serve their custormers without compromise, and get more customers, and then start expanding through aquisitions, keeping their customer-first philosophy. We can only hope and dream.

p.s. I just saw a train through Kearney, NE on VR. It was a merchandiser with an empty coal unit train tacked on. I'm trying to figure out the savings when factoring the loaded train returning with a separate crew or are they combining loaded coal trains as well? If not wouldn't there be an imbalance of crews out of position?

BB



Edited 1 time(s). Last edit at 05/17/19 10:49 by bmarti7.

Enhanced shareholder value uber alles. One surefire way to cut your OR all the way to zero is to make sure that the last guy to leave turns the lights out before he locks the door for the last time.

Chico43 Wrote:
-------------------------------------------------------
> Enhanced shareholder value uber alles. One
> surefire way to cut your OR all the way to zero is
> to make sure that the last guy to leave turns the
> lights out before he locks the door for the last
> time.

Yes. That's one way, of course.

Back in the 1950s, when the O&W and others went belly up, the scrap value of the property exceeded the value of the shares.  The profit and loss statement was all red ink.  You could make more money selling the rails for scrap than actually hauling stuff. 

There's a reason why scrap dealers like Sam Pinsly and Irving Maidman got into the railroad business.

bmarti7 Wrote:
-------------------------------------------------------
> p.s. I just saw a train through Kearney, NE on VR.
> It was a merchandiser with an empty coal unit
> train tacked on. I'm trying to figure out the
> savings when factoring the loaded train returning
> with a separate crew or are they combining loaded
> coal trains as well? If not wouldn't there be an
> imbalance of crews out of position?

Other way around.  It was an empty coal train with manifest put on the head end.  The manifest was picked up in Coffeyville, KS and is to be set out at North Platte.  This particular example is where PSR can be ok, in my book.  Coffeyville doesn’t originate any road trains.  It’s mostly a block swap yard.  Instead of running an extra train, the empty coal train (minimum tonnage and going in the same direction) picked up the manifest block and will set it out at North Platte.  Plus, the coal train will have to stop at North Platte anyways to be inspected and fueled, so why not?

Andrew

florida581 Wrote:
-------------------------------------------------------
> Instead of running an
> extra train, the empty coal train (minimum tonnage
> and going in the same direction) picked up the
> manifest block and will set it out at North
> Platte.  Plus, the coal train will have to stop
> at North Platte anyways to be inspected and
> fueled, so why not?

That used to be stuff the Chief automatically did as the occasion arose, but we didn't call it PSR, just doing our job of managing the district. Now, it probably takes a layer or two of new management.

TAW

SP did this in the 1980's and 1990's. It became rather common for non-expedited eastbound intermodal trains (trains with no UPS loads),out of LATC in Los Angeles,to stop and pick up a manifest block of loads and empties at West Colton Yard before heading east to Yuma. Back then it was deemed smart because SP was pinching pennies. Now it's considered, by some, as dumb and called PSR.

Allen

Posted from Android



Edited 2 time(s). Last edit at 05/17/19 12:48 by bradleymckay.

But what if just one big road says "nuts" to this and continues to serve their custormers without compromise, and get more customers, and then start expanding through aquisitions, keeping their customer-first philosophy. We can only hope and dream.

YES! Let's HOPE Warren Buffet has enough common sense to keep BNSF out of that PSR crap! Unlike the idiots at U.P and the rest that think it's the greatest damn thing since sliced bread!

florida581 Wrote:
-------------------------------------------------------
> Other way around.  It was an empty coal train
> with manifest put on the head end.  The manifest
> was picked up in Coffeyville, KS and is to be set
> out at North Platte.  This particular example is
> where PSR can be ok, in my book.  Coffeyville
> doesn’t originate any road trains.  It’s
> mostly a block swap yard.  Instead of running an
> extra train, the empty coal train (minimum tonnage
> and going in the same direction) picked up the
> manifest block and will set it out at North
> Platte.  Plus, the coal train will have to stop
> at North Platte anyways to be inspected and
> fueled, so why not?

Coffeyville was filling empty coal trains with a large block of NP manifest traffic several years before PSR came along.

Txtrainman60 Wrote:
-------------------------------------------------------
> But what if just one big road says "nuts" to this
> and continues to serve their custormers without
> compromise, and get more customers, and then start
> expanding through aquisitions, keeping their
> customer-first philosophy. We can only hope and
> dream.
>
> YES! Let's HOPE Warren Buffet has enough common
> sense to keep BNSF out of that PSR crap! Unlike
> the idiots at U.P and the rest that think it's the
> greatest damn thing since sliced bread!

The problem with your comment is we don't know for sure if there are customers pushing for lower shipping rates. However rumors abound that the maritime shippers and coal companies, both troubled industries, are pushing for lower rates and have been for awhile. So the railroads are going to respond with cost saving measures. BNSF's double coal train test in Colorado is very telling IMHO...

Allen

Posted from Android

We just spent 4 days driving from Portland across Idaho/Utah to Winter Park, CO.  The lack of trains on the UP was dismal at best.  I know we could have missed trains at spots, but this didn't seem like all our previous trips.  Saw nothing in the Blue mountains until La Grande where one freight with pure CP power was about to leave.  Soldier Summit we saw a ten car local.  Found a BNSF sand train at Wash/Wellington.  Nothing to Grand Junction.  Next day, Amtrak both ways on the Dotsero Cutoff.  Missed a BNSF oil empty about Gore Canyon.  I hear it had two KCS units including Employee Appreciation unit.

thanks to a friend, I know that Grand Junction sent out a 150 plus car train set up 2x3x2x0 with two cuts of coal and one cut of general merchandise.  More PSR?

Rob

bradleymckay Wrote:
-------------------------------------------------------
> Txtrainman60 Wrote:
> --------------------------------------------------
> -----
> > But what if just one big road says "nuts" to
> this
> > and continues to serve their custormers without
> > compromise, and get more customers, and then
> start
> > expanding through aquisitions, keeping their
> > customer-first philosophy. We can only hope and
> > dream.
> >
> > YES! Let's HOPE Warren Buffet has enough common
> > sense to keep BNSF out of that PSR crap! Unlike
> > the idiots at U.P and the rest that think it's
> the
> > greatest damn thing since sliced bread!
>
> The problem with your comment is we don't know for
> sure if there are customers pushing for lower
> shipping rates. However rumors abound that the
> maritime shippers and coal companies, both
> troubled industries, are pushing for lower rates
> and have been for awhile. So the railroads are
> going to respond with cost saving measures.
> BNSF's double coal train test in Colorado is very
> telling IMHO...
>
> Allen
>
> Posted from Android

The consolidation of the martime container companies is likely to be a big problem for the rails. Fewer terminals within a port, fewer port calls, bigger ships.

Some observers believe the Costco (not COSCO) effect may come into play soon. The giant retailer often limits shelf space to just one product in each category, and rarely has competing products at the same price point. Give us your best price for one million units.  One of you will get an order for one million units, the others will get nothing.  Telling BNSF and UP to give even lower prices and higher penalty terms for various shipping lanes could create a lot of pain.

Chico43 Wrote:
-------------------------------------------------------
> Enhanced shareholder value uber alles. One
> surefire way to cut your OR all the way to zero is
> to make sure that the last guy to leave turns the
> lights out before he locks the door for the last
> time.

How often has it happened, that a transportation provider drags their feet by endlessly debating and analyzing the cost of providing new equipment or services to fulfill a shipper's requirement, until finally the shipper gives up and simply goes away....and the folks who dragged their their feet conratulate themselves for having saved capital by not having to do the project.....

Bob

When CP went to psr, they changed their local service from in town to Milwaukee.  They also increased our service to 7 days a week.  The issue with loosing "The Patrol" as the local was called was that they would provide in plant switching in the past.  We have a contract switch company on site now for in plant moves.  The system started out pretty good, but has gone down in recent years.  We were recently reduced from 7 to 4 service days.  Then they dropped us to 3 days even though we objected.  Even with the 3 days, there are several times that cars that are staged in Milwaukee and should be delivered overnight are not placed.  We have to allow for more room in our inventory due to the fact that the cars are not getting spotted when they are delivered.  If we have to wait another 3 days for the next switch, then we need more inventory on site to cover for the delay.  This all adds to our cost and to the number of cars that are not moving.  This is in direct conflict to the "Keep the cars moving" mantra of PSR.

 

SteveC Wrote:
-------------------------------------------------------
> When CP went to psr, they changed their local
> service from in town to Milwaukee.  They also
> increased our service to 7 days a week.  The
> issue with loosing "The Patrol" as the local was
> called was that they would provide in plant
> switching in the past.  We have a contract switch
> company on site now for in plant moves.  The
> system started out pretty good, but has gone down
> in recent years.  We were recently reduced from 7
> to 4 service days.  Then they dropped us to 3
> days even though we objected.  Even with the 3
> days, there are several times that cars that are
> staged in Milwaukee and should be delivered
> overnight are not placed.  We have to allow for
> more room in our inventory due to the fact that
> the cars are not getting spotted when they are
> delivered.  If we have to wait another 3 days for
> the next switch, then we need more inventory on
> site to cover for the delay.  This all adds to
> our cost and to the number of cars that are not
> moving.  This is in direct conflict to the "Keep
> the cars moving" mantra of PSR.
>
>  

Yikes.  And, they charge you for holding onto these cars, as well?

Lackawanna484 Wrote:
-------------------------------------------------------
> SteveC Wrote:
> --------------------------------------------------
> -----
> > When CP went to psr, they changed their local
> > service from in town to Milwaukee.  They also
> > increased our service to 7 days a week.  The
> > issue with loosing "The Patrol" as the local
> was
> > called was that they would provide in plant
> > switching in the past.  We have a contract
> switch
> > company on site now for in plant moves.  The
> > system started out pretty good, but has gone
> down
> > in recent years.  We were recently reduced from
> 7
> > to 4 service days.  Then they dropped us to 3
> > days even though we objected.  Even with the 3
> > days, there are several times that cars that
> are
> > staged in Milwaukee and should be delivered
> > overnight are not placed.  We have to allow
> for
> > more room in our inventory due to the fact that
> > the cars are not getting spotted when they are
> > delivered.  If we have to wait another 3 days
> for
> > the next switch, then we need more inventory on
> > site to cover for the delay.  This all adds to
> > our cost and to the number of cars that are not
> > moving.  This is in direct conflict to the
> "Keep
> > the cars moving" mantra of PSR.
> >
> >  
>
> Yikes.  And, they charge you for holding onto
> these cars, as well?

We are the destination of these loads, so the charges for demurrrage are usually levied on us by the shipper.  They allow so many days for the car to be unloaded and returned to them.  As for the railroad charging us. They have been fairly resonable.  They do charge us if they come on site to pick up a car that is not available for what ever reason, (their empty car may be blocked by another car and they don't move the other car out of the way or perhaps UP placed their inbounds on the wrong track, etc.)   but then they don't refund to us when they fail to deliver a load either.  The issue is that we were not able to change our service days, or get them to continue with at least 4 days a week. 
 



Edited 1 time(s). Last edit at 05/18/19 20:25 by SteveC.