Western Railroad Discussion > UP, BNSF and the fight for UPS

UP would like a larger share of UPS business, but UP is not inclined to operate the network of intermodal terminals to support the business like BNSF. Case in point.....

I live near Boise, ID. Boise in recent years has been the fastest growing population center in the US. Boise is in the Treasure Valley a highly productive agricultural region and adjacent to the Magic Valley of south central Idaho, also a highly productive agricultural area. The nearest UP intermodal terminal for domestic shipments is Salt Lake City, 340 miles away. So it's no surprise that over the road truckers are far more common locally than those that rely on intermodal transportation. The lack of a local intermodal ramp has also impeded UPS ability to serve the local market, and on I-84 you often see FedEx Ground triple trailers running one after another, enough to fill a train it seems. So when UPS has a shipment coming to the Boise area, it takes a odd route via BNSF.
I recently purchased a BN SD40-2 from ScaleTrains based near Nashville, TN. Looking at the tracking history I can see it was trucked from Nashville to Chicago then put on a BNSF Z train and shipped to Spokane where BNSF has a intermodal terminal. It went to the UPS distribution terminal a few blocks away and sorted into a trailer bound for Boise. It will come to Boise to be sorted again today and be at my place soon.
Since BNSF is more willing to operate intermodal ramps in smaller population centers to create a network with more coverage, that is more appealing to a trucking company like UPS and FedEx. The UP Z trains that pass by here only have a handful of UPS trailers on a Chicago-Portland route I believe. Ironically I often saw more UPS trailers on the BNSF's Z-PTLCHC's St Paul setout block.
While UP may want the business, they probably won't make the investments needed to get the business.

Ted Curphey
Ontario, OR

---

RR's, especially UP, seem to want the business to COME to them, vs. their railroad GOING AFTER the business.  It's lazy and short sighted, and does not lead to growth, but rather, stagnation.

While the U.S. freight market continues to grow, the RR's haul less and less (down 10% last year) of the overall freight volume.  

RR's have to be willing to hustle, accept a higher O.R. to get things done, and really understand what the customer wants and needs.

Looking back, I miss the days when WP, SP, Santa Fe, D&RGW, etc. all ran fast trains, and had to hustle to get business.  It was vibrant, not perfect, but vibrant and busy.

                You are correct pn the railroads being lazy about getting the business but there are many other companies just as lazy.. Most will hold their noses high in the air of arrogance until umtil the bean counters run into the meeting to announce there is a terrible cash problem ( lack of it ) and they must hirre people to sell ( NOW !!! ). Same story over and over.

UP has initiated "pop up" ramps at Phoenix, West Colton and Minneaspolis in the last 2 years.  They have small ramps at El Paso, Reno, Las Vegas, Council Bluffs, and Rio Grande Valley.   I don't think UP is reluctant to go after this business.  Maybe it's just a matter of where to put a small ramp, since they don't directly serve Boise anymore.  Maybe Pocatello?  Or maybe that's too close to Salt Lake to make money. 

funnelfan Wrote:
-------------------------------------------------------
> Since BNSF is more willing to operate intermodal
> ramps in smaller population centers to create a
> network with more coverage, that is more appealing
> to a trucking company like UPS and FedEx.

With Katie pushing an insufferable attendance policy for BNSF and to lower the OR...not sure you're going to be able to count on rural intermodal ramps. By the way the closest BNSF ramp to me is 300 miles away and I live directly along a BNSF route, so lets not brag that much about BNSF and "smaller population" ramps.


https://www.trainorders.com/discussion/read.php?1,5849443

i think taking "priority business" away from another railroad should be based on this:

you have the track capacity to reliably move this "priority business" WITHOUT negatively impacting your current operations (i.e. delays to other trains, recrews, etc.)........

66 

 

While Boise is growing rapidly, it is not the fastest growing metro in the country.  The Boise-Mountain Home-Ontario Combined Statistical Area increased by 64,000 from 2020 to 2023, but 17 other CSA's added more in the same time period.  For perspective, Dallas-Fort Worth increased by 496,000.

https://en.wikipedia.org/wiki/Combined_statistical_area 

Take away bulk moves of ag products, energy products and earth minerals and rail’s share of the freight market is even more sobering.
 
Looking at Boise: are loads in and loads out balanced? Or close to balanced? Or is it a very imbalanced market? Are agricultural loads that work for intermodal close by? A lot of large population centers are good for trucking, but not necessarily for intermodal IF the miles to get to a load are too short to make sense for intermodal, because the imbalance equates to triangulation of equipment to minimize empty miles. So whether UP decides to invest in a ramp in Boise depends on the dynamics of all of the moves in/out. Boise may have a large amount of consumption of consumer goods, and use of industrial products, how much does it ship out? Or are trucks going shorter distances to pick up loads (ie: Seattle/Tacoma and Portland/Willamette Valley areas)? If that is the case, then it won’t be nearly the opportunity for intermodal that the population itself would indicate. Or maybe there could be inbound dry loads, then outbound ag bulk in trucks/containers to the ports in WA and OR like is being done out of Pocatello?
 
In talking about smaller ramps, specifically on UP, one example is Las Vegas, where they have a VERY small ramp in spite of 2.4 million residents (edit: Boise area is about 750,000 residents), plus very large visitors placing even more consumption needs on local business. The vast majority of goods consumed and food is from the Los Angeles Basin and produce from the primary growing areas in the San Joaquin Valley, Central Valley, Central Coast and the handful of smaller remaining Southern CA growing areas. Truck runs are in the 220-mile to 260-mile range to/from the primary dry goods RDCs and NDCs in the LA Basin, around 350 miles to the growing DC areas around Visalia, and 450 miles to the Tracy/Lathrop/Stockton/Modesto DCs. For produce, most are in the 350-mile to 550-mile range. None of these are price, and certainly not service, competitive for intermodal. Longer hauls to the north and east and other places are a lot more attractive for intermodal. Yet UP’s ramp gets minimal business, and UP only offers one service into LV – from Chicago Global 2. And it only offers one destination out of LV – the ICTF in Long Beach (which is now both international and domestic) which is almost entirely an empty repo move that only makes sense with the long haul from Global 2. I don’t know current counts: pre-pandemic it was +/- 50 lifts per day, meaning 25 in, 25 out per day. Truck traffic for LV was, pre-pandemic, +/- 3,000 trucks per day, meaning 1,500 in, 1,500 out per day. A ramp of 12,500 lifts/year is not a money-maker any way you look at it. The amount of freight moving out of the Las Vegas area is small. That is changing now (and perhaps it already has in the Boise area), but it will take years to grow the DC and manufacturing base in the Las Vegas area. So most trucks coming from the east (ie: Chicago, protein areas of the Midwest, Texas, etc) will not return direct to where they originated, but instead will go to the RDCs and NDCs in California, then head east. Trying to capture some of that market and be strategically located for that triangulation is a part of BNSF’s strategy at BIG, but the long drays only make it work for hauls that are in the 1,500-mile to 2,200 mile and longer range. But these are the dynamics that railroads are faced with in many smaller markets, and with the current Wall Street pressures on management, they are very reluctant to take any chances.
 
Many businesses/industries are leaving California now, and maybe the same is happening in the coastal areas of Washington and Oregon (that’s an assumption on my part, open to corrections). Clark County is picking up a lot. There are already major industrial developments in North Las Vegas and more in the pipeline, and entitlements are in progress for a major industrial development near Primm, just north of the California border. My personal experience in CA has been indicative of that: we had a new quarter-million sf DC (not large by today’s standards) project in Fresno, surrounded by other DCs and zoned for industrial use, a mile away from residential. Our project was stopped by social justice groups and it took us 20 months to get our approvals (and quite a few dollars) to make the opposition happy. Construction is almost done, but what a pain (and the time cost us). In North Las Vegas on another project we were welcomed with open arms. Same for projects in the Phoenix area. So eventually it is likely you will see industrial development in Boise that generates outbound loads to justify a ramp. But how soon?
 
Bruce
 



Edited 1 time(s). Last edit at 04/19/24 09:00 by StStephen.

https://savageco.com/press-release/savage-union-pacific-intermodal-rail-terminal-pocatello-idaho/

This opened a while ago for grain, Savage is looking to expand.



Edited 1 time(s). Last edit at 04/19/24 10:56 by portlander.

And frankly that's the future of regional/local IM freight (IM including boxcars). Look at Savage planning a terminal in
Cedar City UT, 30 miles from the mainline. Will they lift at some point? Well the facility that was state sponsered is
already lifting cargo (steel) off flats and onto trucks, containers wouldn't be a stretch.

Out 

UP used to have a ramp operating at the Nampa terminal near the yard office back in the late 1980s. I know that because I was living there at the time and would see the UPS (and other) trailers being loaded/unloaded. The Nampa ramp was closed sometime in the early '90s if I remember right. Seems like there would demand for such a service these days, but maybe PSR/Wall Street beg to differ with me.

I read all of this, and it makes me think that holding onto, and building, carload business will become even more cirtical for profits.  Weight pays the bills, and RR's still have that advantage.  MAXIMIZE it.  Every customer on every rusty spur deserves a re-look.  Lots of them exist, in many states.

Pirtleville Wrote:
-------------------------------------------------------
> UP used to have a ramp operating at the Nampa
> terminal near the yard office back in the late
> 1980s. I know that because I was living there at
> the time and would see the UPS (and other)
> trailers being loaded/unloaded. The Nampa ramp was
> closed sometime in the early '90s if I remember
> right. Seems like there would demand for such a
> service these days, but maybe PSR/Wall Street beg
> to differ with me.

UP moved the Nampa ramp to the old PFE shop site in the mid 90's. After big fanfare on the expansion, UP then closed it during their huge meltdown after buying the SP. The "packer" sat there for many years afterwards unused. All that area is still there and could be used again, but I highly doubt it will ever happen.

Ticeska Wrote:
-------------------------------------------------------
> Pirtleville Wrote:
> --------------------------------------------------
> -----
> > UP used to have a ramp operating at the Nampa
> > terminal near the yard office back in the late
> > 1980s. I know that because I was living there
> at
> > the time and would see the UPS (and other)
> > trailers being loaded/unloaded. The Nampa ramp
> was
> > closed sometime in the early '90s if I remember
> > right. Seems like there would demand for such a
> > service these days, but maybe PSR/Wall Street
> beg
> > to differ with me.
>
> UP moved the Nampa ramp to the old PFE shop site
> in the mid 90's. After big fanfare on the
> expansion, UP then closed it during their huge
> meltdown after buying the SP. The "packer" sat
> there for many years afterwards unused. All that
> area is still there and could be used again, but I
> highly doubt it will ever happen.

Looking at old aerial imagery, the intermodal ramp by the Nampa Yard terminal was a true circus style loading ramp. The new intermodal terminal west of the Northside Blvd overpass wasn't yet in operation in 1992, but 2004 imagery shows intermodal trailers parked there. But nothing by 2009. Those tracks have since been taken over by Watco's Boise Valley RR to sort the traffic to and from their various jobs working the ex-UP branchlines in the region..

Ted Curphey
Ontario, OR