Eastern Railroad Discussion > Rails prevent coal producers from booming market

Mining Weekly had a nice article on how the problems in the US rail industry are primarily to blame for American coal producers missing out on the booming export market, and will keep doing so for the forseeable future. It looks like other nations will have to fill the huge coming void.

Partial quote: "The National Mining Association industry group said the supply chain problems with rail, the primary means of transporting coal, is costing companies both in lost shipments and extra labor."  Read more here:

https://www.miningweekly.com/article/us-coal-companies-struggle-to-cash-in-on-europe-crunch-2022-05-17

Wasn't PSR supposed to make rail transportation more consistent and reliable, and then clear the mainlines and create more capacity for increased business? I mean, with fewer trains and double-sized coal trains shouldn't the rails be able to quickly respond to their biggest market and help everyone, including themselves, make lots more money? Are shareholders savvy enough to know their demands for PSR are causing and will result in lost profits across the board, or are they getting ready to bail out after the PSR looting spree? Feel free to pile on...

JG
 



Edited 2 time(s). Last edit at 05/19/22 21:33 by jgilmore.

Thank you for the invite! The cultists in the EHH(PBUH) PSR church of the imploding industry don’t give a rats a$$ about anything but short term pats on the head from Wall Street. And it’s all of American Industry really; show me a nickel today and to hell with a dollar next year.

These people have no shame, or sense of decency, just greed.

Regards.

Posted from iPhone

No real surprise. As I've said before, the Carriers can't handle the business they have now. Certainly not a particular Carrier in the east...

I guess IF this country would have another "record crop year", they would all be moved by truck??!! Yeah, picture that one....:</

Posted from Android



Edited 1 time(s). Last edit at 05/20/22 02:32 by ns1000.

https://www.freightwaves.com/news/csx-rejects-blame-from-tampa-electric-for-low-coal-supplies?fbclid=IwAR1yyZsgndbJG1Lo5Mmxmc_peW3Eb42jMHqUmHkx9pRGS5WqH8HVX7Y2nLI


I just love that the CSX blames the mine for lack of coal delivery but at the same time refuses to service the mine due to lack of crews and congestion.

Posted from iPhone

Drknow Wrote:
-------------------------------------------------------
> Thank you for the invite! The cultists in the
> EHH(PBUH) PSR church of the imploding industry
> don’t give a rats a$$ about anything but short
> term pats on the head from Wall Street. And it’s
> all of American Industry really; show me a nickel
> today and to hell with a dollar next year.
>
> These people have no shame, or sense of decency,
> just greed.
>
> Regards.
>
> Posted from iPhone

That is correct . You know the skinny about this. It's very greedy people on Wall Street and corporate board rooms spoiling our country . 

And what is not mentioned that we T&E are working ourselves to death...and I do mean they are killing us...I would not be surprised if my grave is already dug and my casket is nice and shiney!

Time for open access rail transportation?  We already have it in truck, air, water and car transportation.  And in electricity distribution.  Time for the public, or some other neutral body, to administer the infrastructure?

Myself, for one, is probably one of the most vocal opponents of PSR and just how absolutely horrible the service is on the Class One railroads these days, but in the case of the subject of this thread, I have to side more with the railroads.  The railroads could ask the coal mines/companies why they haven't been shipping coal out for the past few years in preparation for this big new bump up in the market demand for coal now!?!?  The coal mining business has been in a downward spiral for years (more like collapse), the coal traffic has almost disappeared over many former coal heavy rail lines - yet the railroads are supposed to have locomotives, cars, crews, etc sitting there waiting for a call that know one knew was coming???

This same problem happens in the grain transportation business; farmers sit on their products when the prices are low, then when the prices go up and they all want to ship as much of their product as they can, all at the same time to reap the wealth of high prices, they get all upset at the railroads for not having the cars, engines, crews, track capacity build outs not available right at the time of their call.  No railroad could financially survive at those whims.

One option, and I think this is being done with the BNSF grain business; customer pays a fee to have guaranteed transportation available for when they are ready to ship (at least for car supply).  I can't imagine though, that these grain and coal shippers will be willing to pay for extra train crews to sit on a paid extraboard so that they will be there when these shippers need them.



Edited 1 time(s). Last edit at 05/20/22 10:24 by wyeth.

Back in the old days of PennCentral, several mining and electric companies bought their own power for their trains.

Wouldn't be a big step to hire crews, put them in IBEW UMW, qualify them and pay CSX etc for the use of track.

Posted from Android

Yes, many coal mines/rail lines have evaporated on NS, CSX, and others due to the downward spiral of coal. But, with today's attitude of "plan for today" (barely), it still would be difficult to move regardless.

And yes, we ARE being worked to death........

Posted from Android

wyeth Wrote:
-------------------------------------------------------
> Myself, for one, is probably one of the most vocal
> opponents of PSR and just how absolutely horrible
> the service is on the Class One railroads these
> days, but in the case of the subject of this
> thread, I have to side more with the railroads. 
> The railroads could ask the coal mines/companies
> why they haven't been shipping coal out for the
> past few years in preparation for this big new
> bump up in the market demand for coal now!?!? 
> The coal mining business has been in a downward
> spiral for years (more like collapse), the coal
> traffic has almost disappeared over many former
> coal heavy rail lines - yet the railroads are
> supposed to have locomotives, cars, crews, etc
> sitting there waiting for a call that know one
> knew was coming???
>
> This same problem happens in the grain
> transportation business; farmers sit on their
> products when the prices are low, then when the
> prices go up and they all want to ship as much of
> their product as they can, all at the same time to
> reap the wealth of high prices, they get all upset
> at the railroads for not having the cars, engines,
> crews, track capacity build outs not available
> right at the time of their call.  No railroad
> could financially survive at those whims.
>
> One option, and I think this is being done with
> the BNSF grain business; customer pays a fee to
> have guaranteed transportation available for when
> they are ready to ship (at least for car
> supply).  I can't imagine though, that these
> grain and coal shippers will be willing to pay for
> extra train crews to sit on a paid extraboard so
> that they will be there when these shippers need
> them.

One those dirty little secrets of the transportation business. Sometimes you are going to have too many employees and too much equipment, but you have to have some extra resources in place to capitalize when opportunity knocks. As I keep saying, if you can’t grasp this concept, then investing in railroads is NOT for you. You have to put on your big boy pants to get this stuff. Not ALL lines of business are just like any other business, and talent, knowledge and strategies are not fully interchangeable .

Posted from iPhone

The idea of "guaranteed transportation" shows up in special premium pricing for UPS, but rarely elsewhere. Introducing guaranteed service pricing for grain, coal, auto parts etc would undoubtedly send shippers straight to Congress. We will deliver you 200 empty grain cars to spec before Thursday of each week. You will deliver us 200 loaded grain cars on the following Thursday. We will have them at the export terminal in Seattle by the Thursday after that. You will pay us whatever. If we fail, we will pay you X.

Back in the "old days" ATSF occasionally sent one or two car special moves when a UPS Z had to set off cars. Train went on, and the repaired cars went on later. That was back when they actually had crews available, power available, car department available, etc... Now they just charge for premium service and hope for the best.
 

jgilmore Wrote:
-------------------------------------------------------
> Mining Weekly had a nice article on how the
> problems in the US rail industry are primarily to
> blame for American coal producers missing out on
> the booming export market, and will keep doing so
> for the forseeable future. It looks like other
> nations will have to fill the huge coming void.
>
> Partial quote: "The National Mining Association
> industry group said the supply chain problems
> with rail, the primary means of transporting coal,
> is costing companies both in lost shipments and
> extra labor."  Read more here:
>
> https://www.miningweekly.com/article/us-coal-compa
> nies-struggle-to-cash-in-on-europe-crunch-2022-05-
> 17
>
> Wasn't PSR supposed to make rail transportation
> more consistent and reliable, and then clear the
> mainlines and create more capacity for increased
> business? I mean, with fewer trains and
> double-sized coal trains shouldn't the rails be
> able to quickly respond to their biggest market
> and help everyone, including themselves, make lots
> more money? Are shareholders savvy enough to know
> their demands for PSR are causing and will result
> in lost profits across the board, or are they
> getting ready to bail out after the PSR looting
> spree? Feel free to pile on...
>
> JG
>  


The coal companies are trying to use the railroads as a scapegoat for not wanting to make what is really a long-term investment for short term volume output.
They know that the newfound demand for coal will vanish as soon as other energy sources are available providing insufficient time to recoup their investments.
The railroads have the same issue as the mines; the investments they would have to make would take longer to pay out than the business would last.
Businesses are not going to make investments that do not appear to result in a profitable outcome.
If the coal companies have a real complaint about the railroads, they can take it to the STB.

ALLEN
:)

 

The railroads took the same approach with the Bakken oil rush in 2013+.  The spread between the US market price of crude oil and the discount for Bakken made paying $13 for a rail haul to the east coast profitable for the shippers. But the railroads wouldn't buy oil tanker cars for the oil.

So the shippers turned to leasing companies, who did take the risk, figured out costs,  and bought thousands of oil tanker cars. When oil prices collapsed (from $110 to $25 and briefly below $0), most of those oil tanker cars were laid up in storage, Costing the investors lots of money. That's the way capitalism works. Somebody takes a risk, and either makes money, or loses a barrel of it.

(Unless you're connected, in which case the taxpayers take the loss for you.  You keep any profits.)

I’m thinking if they can move coal they will. So much more profit in coal verses other commodities.

krm152 wrote:
---------------------------------------------------------------------------------------------------------------------------
The coal companies are trying to use the railroads as a scapegoat for not wanting to make what is really a long-term investment for short term volume output.
They know that the newfound demand for coal will vanish as soon as other energy sources are available providing insufficient time to recoup their investments.
The railroads have the same issue as the mines; the investments they would have to make would take longer to pay out than the business would last.

Normally this might be true, but we all know the rails have lots of idled assets in the form of locos and coal cars that could quickly be put into service for any coal boom. Only they don't have the personnel assets to do this because PSR and covid resulted in cutting too deep into the bone, so to speak, trying to operate too lean and also not making the railroad a place that furloughed people or even new people want to work at. This is well documented and attested to here on TO, the labor force didn't cut itself, the roads did it to themselves and could be more easily taking advantage even of a temporary boom than they are. Years ago there was more slack in the system but that isn't allowed now, and they can't handle the declining business they currently have. True, the coal companies haven't invested much lately in new production, but they do have some additional production that could be sent to the market if the rails weren't in a self-inflicted mess...

JG



Edited 1 time(s). Last edit at 05/20/22 18:41 by jgilmore.

jgilmore Wrote:
-------------------------------------------------------
> krm152 wrote:
> --------------------------------------------------
> --------------------------------------------------
> -----------------------
> The coal companies are trying to use the railroads
> as a scapegoat for not wanting to make what is
> really a long-term investment for short term
> volume output.
> They know that the newfound demand for coal will
> vanish as soon as other energy sources are
> available providing insufficient time to recoup
> their investments.
> The railroads have the same issue as the mines;
> the investments they would have to make would take
> longer to pay out than the business would last.
>
> Normally this might be true, but we all know the
> rails have lots of idled assets in the form of
> locos and coal cars that could quickly be put into
> service for any coal boom. Only they don't have
> the personnel assets to do this because PSR and
> covid resulted in cutting too deep into the bone,
> so to speak, trying to operate too lean and also
> not making the railroad a place that furloughed
> people or even new people want to work at. This is
> well documented and attested to here on TO, the
> labor force didn't cut itself, the roads did it to
> themselves and could be more easily taking
> advantage even of a temporary boom than they are.
> Years ago there was more slack in the system but
> that isn't allowed now, and they can't handle the
> declining business they currently have. True, the
> coal companies haven't invested much lately in new
> production, but they do have some additional
> production that could be sent to the market if the
> rails weren't in a self-inflicted mess...
>
> JG

The source of the article you referenced only mentioned comments from coal industry executives.
No comments of rail executives were included. References to problems with rail service are vague and unsubstantiated by factual data.
This one-sided biased article was nothing more than a cheap attempt to lay the blame for coal industry problems on the railroads.
However, since the article fits with your narrative about railroad operations being a "mess", you jumped on board.
The fact is that railroads are in business to make a profit by providing rail freight transportation.
Your approach to railroading, running trains for the sake of running trains, has been tried and ends in bankruptcy.
ALLEN
:)



 

krm152 wrote:
----------------------------------------
"The source of the article you referenced only mentioned comments from coal industry executives.
No comments of rail executives were included."

The whole post was not offered as a in-depth study of the topic, only a reference to what some railroad customers feel is preventing their business from expanding, and that is the railroad. Take it for what it is, they would know best how their business is being constrained and why, not you or I. When businesses want to know the real truth about the quality of their service, they survey their customers NOT their own management...

krm152:
-------------------------------------------
"This one-sided biased article was nothing more than a cheap attempt to lay the blame for coal industry problems on the railroads.
However, since the article fits with your narrative about railroad operations being a "mess", you jumped on board."

No one spoke of "problems" with the coal industry, just missed opportunities where they BOTH could share in record coal prices but will not likely be able to because primarily the railroads cannot deliver. Obviously the coal companies feel the railroads aren't doing enough even though they've lived through boom-and-bust cycles before. Coal is about the easiest and most profitable stuff the rails could haul and they can't even get current traffic levels delivered properly. This narrative was not created by me but is clearly out there, where does it come from? Why does the government have to set up special committees to investigate, because I told them? Because there are no customer complaints at all, or shortages of goods because everything is being delivered on time? The National Mining Association called me? Get real and get your head out of the sand...

krm152:
-----------------------------------------------
"The fact is that railroads are in business to make a profit by providing rail freight transportation.
Your approach to railroading, running trains for the sake of running trains, has been tried and ends in bankruptcy."

Your assumptions about me clearly reveal you have no real rebuttal, nor do you know anything about me and thus blather some nonsense about "my approach to railroading," which I never commented on. Focusing on the messenger and not the message is an old tactic. I don't work for a railroad and could ultimately care less if they don't deliver, or how many trains they run or don't run or how. Except as an interested observer like most of us here that want to see the industry succeed. And if the absolute whole purpose of a railroad was to only make the most money possible, they are still falling down on the job with billions of dollars in assets sitting idle while easy and profitable business is knocking on the door that they are turning away, due to problems that are largely self-created and something that cannot easily be explained away. I did not create the crew shortage or park the locos/cars nor did the coal companies, but if you have some insider knowledge or logical explanations how this is not the railroads' fault I would be glad to entertain them...

JG

 



Edited 3 time(s). Last edit at 05/20/22 23:16 by jgilmore.

jgilmore Wrote:
-------------------------------------------------------
> krm152 wrote:
> ----------------------------------------
> "The source of the article you referenced only
> mentioned comments from coal industry executives.
> No comments of rail executives were included."
>
> The whole post was not offered as a in-depth study
> of the topic, only a reference to what some
> railroad customers feel is preventing their
> business from expanding, and that is the railroad.
> Take it for what it is, they would know best how
> their business is being constrained and why, not
> you or I. When businesses want to know the real
> truth about the quality of their service, they
> survey their customers NOT their own
> management...
>
> krm152:
> -------------------------------------------
> "This one-sided biased article was nothing more
> than a cheap attempt to lay the blame for coal
> industry problems on the railroads.
> However, since the article fits with your
> narrative about railroad operations being a
> "mess", you jumped on board."
>
> No one spoke of "problems" with the coal industry,
> just missed opportunities where they BOTH could
> share in record coal prices but will not likely be
> able to because primarily the railroads cannot
> deliver. Obviously the coal companies feel the
> railroads aren't doing enough even though they've
> lived through boom-and-bust cycles before. Coal is
> about the easiest and most profitable stuff the
> rails could haul and they can't even get current
> traffic levels delivered properly. This narrative
> was not created by me but is clearly out there,
> where does it come from? Why does the government
> have to set up special committees to investigate,
> because I told them? Because there are no customer
> complaints at all, or shortages of goods because
> everything is being delivered on time? The
> National Mining Association called me? Get real
> and get your head out of the sand...
>
> krm152:
> -----------------------------------------------
> "The fact is that railroads are in business to
> make a profit by providing rail freight
> transportation.
> Your approach to railroading, running trains for
> the sake of running trains, has been tried and
> ends in bankruptcy."
>
> Your assumptions about me clearly reveal you have
> no real rebuttal, nor do you know anything about
> me and thus blather some nonsense about "my
> approach to railroading," which I never commented
> on. Focusing on the messenger and not the message
> is an old tactic. I don't work for a railroad and
> could ultimately care less if they don't deliver,
> or how many trains they run or don't run or how.
> Except as an interested observer like most of us
> here that want to see the industry succeed. And if
> the absolute whole purpose of a railroad was to
> only make the most money possible, they are still
> falling down on the job with billions of dollars
> in assets sitting idle while easy and profitable
> business is knocking on the door that they are
> turning away, due to problems that are largely
> self-created and something that cannot easily be
> explained away. I did not create the crew shortage
> or park the locos/cars nor did the coal companies,
> but if you have some insider knowledge or logical
> explanations how this is not the railroads' fault
> I would be glad to entertain them...
>
> JG
>

 Your very own comments about railroading revealed your approach; I did not have to make any assumptions.
That article is propaganda: 1) writer is not identified, 2) only represents the coal industry position, 3) accuses railroads of not responding to coal industry needs, and 4) provides no facts to support that railroads have turned away coal business.   
It is a fact that railroads have every reason to maximize their profits.  Running trains just to run trains does not maximize profits.
If you want to believe in propaganda and hearsay, that is your right.   
ALLEN


 

krm152 Wrote:

> The fact is that railroads are in business to make
> a profit by providing rail freight
> transportation.


Really???!!!! Yeah, that's why there were STB hearings recently....because the Carriers are doing such a great job at this (EYEROLL)??!?

Posted from Android