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Eastern Railroad Discussion > Have railroads lost (more of) their advantage over trucks?


Date: 08/13/19 09:02
Have railroads lost (more of) their advantage over trucks?
Author: Lackawanna484

IHS Markit, an information service, offers the view that shippers increasingly stay with trucks for an entire trip, rather than truck to rail to truck.

2,000 miles seems to be the point at which rail becomes more competitive, shippers say. 

https://seekingalpha.com/pr/17602085-railroads-continue-lose-price-advantage-trucking-new-ihs-markit-index-shows



Date: 08/13/19 09:22
Re: Have railroads lost (more of) their advantage over trucks?
Author: brc600

Even UP and BNSF have some short hauls, so that makes money apparently. Iowa Interstate has several short hauls, with one being from one side of Wilton, Iowa hauling scrap to a steel mill on the other side of town. The locals are happy about getting scrap trucks off of the local roads through town.



Date: 08/13/19 11:14
Re: Have railroads lost (more of) their advantage over trucks?
Author: markyk

Business Insider had a report today that many smaller trucking companies are unable to pay off their gas debt's which may mean imminent bankruptcies.....despite recent increased trucking capacities, many of my suppliers are concerned about trucking as we head toward October......

Will be interesting to see what happens



Date: 08/13/19 11:38
Re: Have railroads lost (more of) their advantage over trucks?
Author: Lackawanna484

markyk Wrote:
-------------------------------------------------------
> Business Insider had a report today that many
> smaller trucking companies are unable to pay off
> their gas debt's which may mean imminent
> bankruptcies.....despite recent increased trucking
> capacities, many of my suppliers are concerned
> about trucking as we head toward October......
>
> Will be interesting to see what happens

The trucking company multiple employer trust pension plan arrangements are in deep trouble.  Here's a July 2019 summary of plan modification / reduction requests.

There's a reason why UPS and the UPS Teamsters withdrew from the union plan and set up their own. Even paid a huge exit fee to make it possible.

http://www.pensionrights.org/publications/fact-sheet/pension-plans-have-applied-cut-benefits-under-multiemployer-pension-reform-a



Date: 08/13/19 12:54
Re: Have railroads lost (more of) their advantage over trucks?
Author: Wurli1938

> The trucking company multiple employer trust
> pension plan arrangements are in deep trouble. 
> Here's a July 2019 summary of plan modification /
> reduction requests.
>
> There's a reason why UPS and the UPS Teamsters
> withdrew from the union plan and set up their own.
> Even paid a huge exit fee to make it possible.
>
> http://www.pensionrights.org/publications/fact-she
> et/pension-plans-have-applied-cut-benefits-under-m
> ultiemployer-pension-reform-a


Most of the trucking companies that you see on the road are all Truckload carriers, and not union and are not in multi employer pehsion plans, if they even have a pension plan.



Date: 08/13/19 17:12
Re: Have railroads lost (more of) their advantage over trucks?
Author: Lackawanna484

Wurli1938 Wrote:
-------------------------------------------------------
SNIP
>
> Most of the trucking companies that you see on the
> road are all Truckload carriers, and not union and
> are not in multi employer pehsion plans, if they
> even have a pension plan.

Yes.  The list from the pension rights center lists many Teamster plans.  I don't think any Teamster represented companies are major trucking players other than UPS anymore.

Many companies have already closed their defined benefit pension plans.  If they replaced the plans, versions of the 401K are often used.



Date: 08/13/19 18:20
Re: Have railroads lost (more of) their advantage over trucks?
Author: Greyhounds

OK, nobody panic.

We've got a temporary situation that will work itself out.  In 2018 there was a freight "Boom" and orders for new highway tractors went through the roof.  The manufacturers were backloged and the new tractors have either just been recently delivered or are just now being delivered.  The freight "Boom" went away and now the truckers are desperately seeking any freight revenue they can get to pay for their orders. 

That means they're cutting thier rates to unsustainable levels.  Some of them will manage their way through this.  Some of them will go bankrupt.  It's temporary and will work itself out.



Date: 08/14/19 19:00
Re: Have railroads lost (more of) their advantage over trucks?
Author: alco244

railroads in their haste and greed, did not loose their advantage over trucks, they gave it away



Edited 1 time(s). Last edit at 08/14/19 19:02 by alco244.



Date: 08/14/19 20:50
Re: Have railroads lost (more of) their advantage over trucks?
Author: brc600

Exactly, plenty of shippers want to use rail. But the railroads want suicide, like much of corporate America seems to. Giving service is too much of a hassle.

alco244 Wrote:
-------------------------------------------------------
> railroads in their haste and greed, did not loose
> their advantage over trucks, they gave it away



Date: 08/14/19 22:33
Re: Have railroads lost (more of) their advantage over trucks?
Author: alco244

i grew up in northern NY, the town i grew up in has a paper mill, in the early 70's, the railroad switched the mill 3 times a day, bringing in logs and  chemicals, they made their own pulp, they shipped out 20-30 car loads of paper daily. flash ahead to today, i worked for that railroad, about 2 cars of pulp into the mill daily, if they can get service, talked to a VIP on the railroad, no marketing staff for over 30 years have called on this mill, last outbound car of toilet paper was shipped 20 years ago, but about 50+ trucks a day depart. i myself picked up a tractor trailer load in 1990, drove 600 miles overnight in a snow storm to deliver to a factory turned into a large warehouse, i backed down a tore up siding into the building. they stored toilet paper and anti freeze, 500,000 cases each, time has evolved its now JIT, paper is produced to order and loaded per appointment off the production lines, as times evolved the RR cut back service, the mill evolved too, more dependence on trucks, yes they gave it away, keep blaming the union wages, its getting old, look at management bonus's for cutting their own throats



Date: 08/15/19 08:22
Re: Have railroads lost (more of) their advantage over trucks?
Author: wmbrakeman

we all need to reach out to our representives , the trucking lobby or transportation lobby wanting to loosen up hours on truck and bus drivers , 

believe me as a retired bus driver , i loved what i did , but the hours at times unbelievable , and because once i start i was not under a clock that runs all the time , 

if i was parked and group off the bus logged off duty , those 18-20 hour day consider legal , 

   no matter if truck or bus they should be on same rules as pilot or train crew 



Date: 08/16/19 08:16
Re: Have railroads lost (more of) their advantage over trucks?
Author: TAW

brc600 Wrote:
-------------------------------------------------------
> Exactly, plenty of shippers want to use rail. But
> the railroads want suicide, like much of corporate
> America seems to. Giving service is too much of a
> hassle.
>
> alco244 Wrote:
> --------------------------------------------------
> -----
> > railroads in their haste and greed, did not
> loose
> > their advantage over trucks, they gave it away

15ish years ago, a JB Hunt representative was a speaker aat a conference I attended. He told the told the assembled railroad folks (who came to talk about capacity, schedules, and reliability...and left with no conclusions or ideas) that the trucking industry would like to give the railroads a lot more business than they do, but the generally total failure of reliability would ruin their business.

Nothing has changed. (...except maybe it has beocme worse?)

TAW



Date: 08/16/19 11:31
Re: Have railroads lost (more of) their advantage over trucks?
Author: mpe383

IMHO- this is cyclical.  Depending on the cost of diesel, highway taxes, hours of service regulations, traffic congestion etc either truck or rail may be less expensive for a given route.  My wife works for a small business and handles their shipping- from single pallet or tote shipments to multiple truckloads of product.  They make their decision simply based on what the least expensive rate is to get the load from point A to point B.  Fir the most part, the shipper could care less how the load gets there or who carries it- just that it be delivered as contracted.



Date: 08/16/19 12:14
Re: Have railroads lost (more of) their advantage over trucks?
Author: Lackawanna484

mpe383 Wrote:
-------------------------------------------------------
> IMHO- this is cyclical.  Depending on the cost of
> diesel, highway taxes, hours of service
> regulations, traffic congestion etc either truck
> or rail may be less expensive for a given route.
>  My wife works for a small business and handles
> their shipping- from single pallet or tote
> shipments to multiple truckloads of product.
>  They make their decision simply based on what
> the least expensive rate is to get the load from
> point A to point B.  Fir the most part, the
> shipper could care less how the load gets there or
> who carries it- just that it be delivered as
> contracted
.

Right.  That's the reliability aspect.  If you save a buck, and the load sits in East Podunk for a week, you may take rail off your desired alternatives.



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