A Big Step Forward - Trains Magazine
Re: DC location vs. ramp location. BNSF and a few others have done some suburban partnering with developers on logistics parks. In some cases (ie: Stockton CA on BNSF and Salt Lake City on UP) there was enough available land and development underway that it worked. In San Bernardino CA BNSF was had a little-needed manifest yard and shops that were converted into a 600,00+ lift/year ramp; UP had land adjacent to their main but woudn’t spend the money. But in many other markets railroads don’t pursue the “right” locations for new ramps, more so in urban markets (ie: Seattle/Tacoma). The impact on drays out West that isn’t too bad: in the East short hauls make long drays problematic. But as land prices go up there is a trend for large DCs to move further away from development (worst case I can think of is the Walmart DC in Hurricane, Utah, nowhere near any rail). And some large metro/distribution hubs such as Indianapolis have terrible ramps (CSX) or no ramps (NS). Shadow the Cats owner’s points are well taken.
Re: refrigerated shipping: greyhounds’ information on the nature of perishables and shelf-lives is great info. I found the vegetable breakdown illuminating. Fruits are more perishable, with much shorter shelf lives. Also, note that a refrigerated TL carrier is going to haul vegetables on one haul, fruit on another, and – sometimes – proteins on another. You want that flexibility. Regardless, I would argue the ability for railroads to penetrate those markets is mainly about service rather than equipment per se. And backhauls/empty moves. Once those get into the hundreds of miles, they eliminate the short- and medium-haul markets for railroads.
I don’t dispute the economics of moving goods in double-stack vs. conventional trailers. But remember that costs have to include convenience, cubing, delays from chassis, conversion from trailers to containers, and that ever-present handicap for railroads: the supply chain costs of poor reliability and limited schedules. Service needs to come first, THEN conversion can be on the table for discussion. That’s my opinion, and I could be wrong, but it seems consistent with what I see/hear from my clients
Trucking is nimble, goes everywhere, and fits its offerings to what businesses want. Railroads generally don’t. Trucks offer a complete matrix of service to everywhere; railroads don’t.
That trucking has this figured out is a blessing in disguise for railroads. Because instead of having to deal with thousands of businesses with different requirements, they can deal with a fractional number of that with a much smaller range of requirements. LTL trucking is a great example. It demands high levels of service. But on the retail side, it is the LTL trucker who has to deal with thousands of shippers. A railroad can deal with Old Dominion, YRC, Central, Estes, Saia, UPS, FedEx, others and have the vast majority of the LTL market available to it. Go for the 50 largest TL carriers and you probably have 2/3s of the non-gypsy market available to you. Go for the 25 largest refrigerated TL carriers and you likely only have about 15% or 20% available to you: traffic is much more a gypsy operation. That is changing with ELDs and the consolidation of cold chain providers that are accelerating pushing shipping to more financially sound/responsible truckers. The opportunities are huge, as greyhounds started this series with.
Railroads want to run large, long trains on as few schedules as possible between the smallest number of terminals possible. That flies in the face of what shippers want and trucking does. Take a metro area like DFW. BNSF has one ramp in the north Ft. Worth area at Alliance; UP has one domestic ramp east of Dallas at Mesquite and one international ramp south of Dallas. The levels of congestion in DFW mean that on shorter hauls, the time and cost of draying to opposite areas of the metro area become prohibitive. Both roads need two domestic ramps in the DFW metro area if they are to win medium- and shorter-haul traffic. But neither is interested in that. Chicago to DFW is about as short as they want to do, and that is a push. And so truckers get that market. Supply chain decisions are based on trucking proximity and convenience; not so much on railroad ramp location. What are store drays and last mile shipping costs vs. costs into and out of the general market? And when you factor in service, railroading looks even less compelling. Cold chains are even more demanding. Service needs to change first.
One last aside: BNSF is rebuilding and expanding the dormant Barstow CA ramp, focused on long-haul refrigerated truck traffic EB, mostly dry goods WB. For the long-haul, BNSF gets it. Not for the short haul though.
