Western Railroad Discussion > How can anyone be shocked at this?

https://www.railwayage.com/freight/class-i/aar-45-straight-weeks-of-u-s-traffic-downturn/?utm_source=&utm_medium=email&utm_campaign=11514

Precision Stock Manipulation and the line of complaining customers at STB out the door and around the block, what do they expect.

Ultimately, the number of "money trains" (particularly coal and oil) will decline to less than sustainable for various reasons. The customers that are left will be the captive customers that have no alternative. US railroads will be even emptier than they already are, but will still, after everything "redundant" is eliminated, cost a lot to maintain, particularly compared to the limited number of "money trians" that remain.

The most depressing aspect of the railroad industry is that it is essential, no matter how hard it tries to not be.

TAW

It begs the question of, why is it so ingrained in their DNA that cutting is their only path to increased profitability?  They seem very loathe to go after new business (the Class 1s, anyway) and the reasons why are not clear to me.  (Though they may be to those of you who've spent time in the industry.)

I don't think the boilerplate answer of "Blame Wall Street" is applicable here either, since Wall Street is a factor in every industry I can think of.

US trucking industry is also suffering revenue declines:
https://www.joc.com/trucking-logistics/truckload-freight/us-truckload-carriers-slam-revenue-brakes_20191029.html

Posted from iPhone

pennsy3750 Wrote:
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> I don't think the boilerplate answer of "Blame
> Wall Street" is applicable here either, since Wall
> Street is a factor in every industry I can think of.

I think the problem is cultural. Wall St. is a factor, but I agree with your insinuation that the problem is much bigger and widespread.

I've been reading off topic stuff about "fight or fright" response of people. Clamoring for new business (real growth) is fight. Cut/slash/burn is fright. It seems modern culture is more fright (fear, oppression) than fight, hence the seemingly widespread practice of reckless cost cutting, which preserves the wimpy senior managers up top, but destroys the rank and file. As with you, I've seen this happen in many of the industries I've worked for the past 2 decades or so, Wall St. or not. Organizations that were the exceptions are still around, no surprise there.

In the passenger discussions, Graham Claytor is often mentioned as the best Amtrak CEO. Richard Anderson (current Amtrak CEO) supporters have made ridiculous comparisons to Mr. Claytor. It's ridiculous because Anderson is definitely fright, not fight which Claytor was. Amtrak is not part of Wall St., but Anderson was molded by the culture of fright that has existed in Wall St. for generations.

Personally, I see no end to the fright and the eventual dismantling of our culture, even if unintended. Belated Happy Halloween. :-)

There was a recent post on the Eastern board of a kitty litter plant wanting to open up on the NS.  They needed a switch and spur, and were talking about shipping about 50 cars per day (in and out).  NS said "no."  That's right, basically a train per day, with plans to grow that volume.  But NS said "no."

No?????!!  What is wrong with these people?????

coach Wrote:
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> There was a recent post on the Eastern board of a
> kitty litter plant wanting to open up on the NS.
>  They needed a switch and spur, and were talking
> about shipping about 50 cars per day (in and out).
>  NS said "no."  That's right, basically a train
> per day, with plans to grow that volume.  But NS
> said "no."

And unlike coal, kitty litter is a growing business.

coach Wrote:
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> There was a recent post on the Eastern board of a
> kitty litter plant wanting to open up on the NS.
>  They needed a switch and spur, and were talking
> about shipping about 50 cars per day (in and out).
>  NS said "no."  That's right, basically a train
> per day, with plans to grow that volume.  But NS
> said "no."
>
> No?????!!  What is wrong with these people?????

it seems to me the intitial investment for for the installation of the switch/spur and possibly an extra crew to serve this industry sure would have soon been very profitable..........

66

TAW Wrote:
-------------------------------------------------------
> Ultimately, the number of "money trains"
> (particularly coal and oil) will decline to less
> than sustainable for various reasons. The
> customers that are left will be the captive
> customers that have no alternative. US railroads
> will be even emptier than they already are, but
> will still, after everything "redundant" is
> eliminated, cost a lot to maintain, particularly
> compared to the limited number of "money trians"
> that remain.

Oh, I have a real good idea what will happen.  The carriers will decimate the "rank and file" employment and then go to the government for more "corporate welfare" to help them keep their infrastructure up (since they'll have run off much of the business and what's left won't cover the huge fixed costs of operating and maintaining a railroad).  Of course, the stupid, horrible upper management will keep their jobs and get rewarded for an ever decreasing Operating Ratio (hell, if one doesn't maintain the railroad and run many trains (with low paid operators), one can have one hell of an Operating Ratio!).  My mental picture of this is the old KCS back in the early 70's, when they would run one big train in each direction a day (with remote locomotives in the middle (today called DPU)), over decrepit track.  For the near future, this massive train will haul all what's left of business on the railroad.

Of course, this will also affect the shortlines and regionals too (who do drum for new business and often know how to treat their customers) as they rely on outside connections with the class ones. The slash and burn to the bone has been done for years but it is often a last resort in a declining industry like the textile or steel industry, not something you do instead of, or at the same time as finding new business. Often execs try to get a feather in their cap when they come on board to make an organizaton more efficient or less costly but not to the point of cutting off the limbs to save the body.

Victor A. Baird
http://www.erstwhilepublications.com



Edited 2 time(s). Last edit at 11/17/19 16:03 by wabash2800.

wabash2800 Wrote:
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> Of course, this will also affect the shortlines
> and regionals too (who do drum for new business
> and often know how to treat their customers) as
> they rely on outside connections with the class
> ones. The slash and burn to the bone has been done
> for years but it is often a last resort in a
> declining industry like the textile or steel
> industry, not something you do instead of at the
> same time as finding new business. Often execs try
> to get a feather in their cap when they come on
> board to make an organizaton more efficient or
> less costly but not to the point of cutting off
> the limbs to save the body.
>
> Victor A. Baird
> http://www.erstwhilepublications.com

Your last sentence brings to mind PanAm (the airline).  This was well under way even before Lockerbie.

I've been told the intermodal customers (UPS, etc) are even more upset than the carload shippers. Bad management is the problem, and bad managers in any industry hire their cronies and other yes men and yes women. I read an article awhile back regarding how career women are leaving the Fortune 500 becuase of the stress and related negativities.

I tried searching the Eastern Board for the post about NS and the kitty litter company, but couldn’t find it.  How far back was it?

Thanks!
Oliver Barrett

JPB Wrote:
-------------------------------------------------------
> US trucking industry is also suffering revenue
> declines:
> https://www.joc.com/trucking-logistics/truckload-f
> reight/us-truckload-carriers-slam-revenue-brakes_2
> 0191029.html
>
> Posted from iPhone

Interesting as my company ships by truck only and many times, as of late, we can't find trucks.  Several of our shipments have been late to the customer due to lack of trucks.

ShoreLineRoute Wrote:
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> I tried searching the Eastern Board for the post
> about NS and the kitty litter company....

I had that problem too.  Try cat litter [ exact phrase ] and 90 days.

SZ



Edited 1 time(s). Last edit at 11/17/19 13:15 by Steinzeit2.

Growing your business is expensive and takes a lot of resources and time.  It is a long term investment.  Cutting is easy and can be done quickly.  But then what?????

DLM Wrote:
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> Growing your business is expensive and takes a lot
> of resources and time.

...and in the case of the railroad industry, institutional knowledge it no longer has.



>  It is a long term
> investment. 

Which they ignored way back when they disdained then jettisoned the knowledge that they need now.


Cutting is easy and can be done
> quickly.  But then what?????

We're looking at the beginning of the what.

TAW

Over the longer term (20-50 years) we are looking at depletion of oil reserves and a move toward ever-more-expensive sources of liquid fuels (e.g. tar sands).  I expect that to tip the balance in favor of railroads over trucks, as per-mile fuel efficiency is much higher. 

Given that railroads no longer serve most industries or their customers directly, I predict that such growth will primarily be a transition from long-haul trucks to intermodal (vs. an increase in carload traffic), with construction of intermodal transload facilities every 100-200 miles or so along major lines.  In my neighborhood, a new intermodal terminal is scheduled to open in Albany, OR in 2021.

Of course mismanagement could put a damper on that trend...

dendroica Wrote:
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> ... In my neighborhood, a new intermodal terminal is
> scheduled to open in Albany, OR in 2021.
>
> Of course mismanagement could put a damper on that
> trend...


Millersburg??? I knew there was talk, didn't know it had advanced that far. I really hope it comes about but how much UP will be committed to serving it remains to be seen.

Posted from Android

dendroica Wrote:
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>  I expect that to tip the balance in
> favor of railroads over trucks, as per-mile fuel
> efficiency is much higher. 

...except for the customers who want the shipment to arrive at a specific time, or at least on the right day.

Railroads are banking on that concept of they will get the business by default.


>
> Given that railroads no longer serve most
> industries or their customers directly, I predict
> that such growth will primarily be a transition
> from long-haul trucks to intermodal (vs. an
> increase in carload traffic), with construction of
> intermodal transload facilities every 100-200
> miles or so along major lines.

www.flexiwaggon.com

www.tinyurl/central-wa

www.tinyurl.com/Railroad-GND

TAW

 

it would be very interesting to see what a company like UPS could do if it were to take over a railroad such as the UP.