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Re: American Farms are in Jeopardy—Because of Inefficient Rail Service
Author: Bluesman
Date: 09-11-2014 - 20:11
SPOT ON!
SP5103 Wrote:
-------------------------------------------------------
> A friend of mine and former RR boss recently
> moderated an oil and transportation industry panel
> discussing rail traffic in the North. Some of the
> important points that came out:
>
> 1. Most industrial customers have no clue how
> railroads work or what their operating and
> capacity limitations are.
>
> 2. A barge operator stated that a substantial
> portion of their capacity is now being used for
> frac sand instead of grain due to the lack of rail
> capacity. The barges are dependent on river
> conditions, and a long cold winter, spring
> flooding creating sandbars or low water levels
> will impact their capacity.
>
> 3. Most attendees were unaware that that when
> temperatures drop below zero and stay there
> railroads are forced to limit train speeds and cut
> trains in half. Online delays due to the cold and
> doubling the number of trains quickly deplete the
> available crews.
>
> 4. Many power plants have only 30 days of coal in
> reserve due to general train delays over the last
> year.
>
> 5. Any available hopper car capable of carrying
> frac sand is being leased, often at 3 times the
> going rate and for 5 years.
>
> This winter might be a "perfect storm" for BNSF
> across the HiLine, the Dakotas and for CP/Soo.
> Follow the money - and the oil companies are
> willing to spend it due to the demand for their
> product. If demand is 110% of your capacity, what
> traffic do you give priority to? Intermodal, coal,
> grain or oil? Too many times, I have seen
> railroads lose sight of operating the entire
> system and it has resulted in a complete meltdown.
> The railroads have to maintain velocity and limit
> car/yard inventories or they will quickly run out
> of track, engines and crews. With the
> rationalization of the physical plant due to
> mergers, reduced crew size and additional safety
> rules, regulations, and training requirements,
> railroads do not have the capability to quickly
> respond to the substantial increase in traffic
> that has happened.
>
> Remember also that the trucking industry has a
> chronic driver shortage and is dealing with their
> own reliability issues with mandated diesel
> emissions systems, which has created additional
> intermodal traffic demand.
>
> We have a dysfunctional political system, and
> other than a few tweaks to create better shortline
> access and competition, I don't see any advantage
> of any more government intervention. But - let the
> lights go out, fuel prices skyrocket (we're
> already passed the moon trying for Mars) or face
> empty store shelves and the citizenry will demand
> political intervention. Be prepared -I think the
> railroad industry will soon be facing a "new
> normal" on several fronts.
SP5103 Wrote:
-------------------------------------------------------
> A friend of mine and former RR boss recently
> moderated an oil and transportation industry panel
> discussing rail traffic in the North. Some of the
> important points that came out:
>
> 1. Most industrial customers have no clue how
> railroads work or what their operating and
> capacity limitations are.
>
> 2. A barge operator stated that a substantial
> portion of their capacity is now being used for
> frac sand instead of grain due to the lack of rail
> capacity. The barges are dependent on river
> conditions, and a long cold winter, spring
> flooding creating sandbars or low water levels
> will impact their capacity.
>
> 3. Most attendees were unaware that that when
> temperatures drop below zero and stay there
> railroads are forced to limit train speeds and cut
> trains in half. Online delays due to the cold and
> doubling the number of trains quickly deplete the
> available crews.
>
> 4. Many power plants have only 30 days of coal in
> reserve due to general train delays over the last
> year.
>
> 5. Any available hopper car capable of carrying
> frac sand is being leased, often at 3 times the
> going rate and for 5 years.
>
> This winter might be a "perfect storm" for BNSF
> across the HiLine, the Dakotas and for CP/Soo.
> Follow the money - and the oil companies are
> willing to spend it due to the demand for their
> product. If demand is 110% of your capacity, what
> traffic do you give priority to? Intermodal, coal,
> grain or oil? Too many times, I have seen
> railroads lose sight of operating the entire
> system and it has resulted in a complete meltdown.
> The railroads have to maintain velocity and limit
> car/yard inventories or they will quickly run out
> of track, engines and crews. With the
> rationalization of the physical plant due to
> mergers, reduced crew size and additional safety
> rules, regulations, and training requirements,
> railroads do not have the capability to quickly
> respond to the substantial increase in traffic
> that has happened.
>
> Remember also that the trucking industry has a
> chronic driver shortage and is dealing with their
> own reliability issues with mandated diesel
> emissions systems, which has created additional
> intermodal traffic demand.
>
> We have a dysfunctional political system, and
> other than a few tweaks to create better shortline
> access and competition, I don't see any advantage
> of any more government intervention. But - let the
> lights go out, fuel prices skyrocket (we're
> already passed the moon trying for Mars) or face
> empty store shelves and the citizenry will demand
> political intervention. Be prepared -I think the
> railroad industry will soon be facing a "new
> normal" on several fronts.
