Re: Enduring NWP
Author: Short Line Guy
Date: 08-10-2011 - 07:13

A friend in the marketing end of this business likens the relationship between a shipper and a trucker as a "one night stand" -- and the relationship between a shipper and a railroad to a "marriage".

There's little of no commitment when a shipper calls a motor carrier to arrange a load. On the other hand, the rail option may (and often does) mean major investments in construction or rehabilitation of sidings, leasing freight cars, buying handling equipment, etc. The same kind of investment may be required at the other end of the move.

Railroad cars handle nearly three times what a trucker can handle in single trailer. But that may mean the customer adjusting his operational patterns. In some cases it will require extra storage capacity or changes in the way the commodity is purchased or sold. Rail contract rates often run for two or three years and may involve volume guarantees. In other words, it's not a simple decision for the customer to make.

As in a marriage, there is a period of "romancing" as the railroad and the shipper get to know and trust each other. This can be for an extended period - especially if the shipper felt "jilted" in a past relationship with a railroad. The customer will ask himself, "Do I really want to do this? Is it going to justify the risk I am assuming? In many cases the answer will be no.

Sure rail rates can be much lower than truck rates. Sure, there are customers who are truly, "rail dependent". But the majority won't switch from highway since they now have the rail option. They will study the matter and mull over the decision. The process doesn't happen overnight NWP's new management will have to prove themselves to potential customers. That can take a long time.



Subject Written By Date/Time (PST)
  Enduring NWP KI6WDX 08-09-2011 - 20:42
  Re: Enduring NWP KI6ZQY 08-09-2011 - 23:27
  Re: Enduring NWP Patience 08-09-2011 - 23:52
  Re: Enduring NWP Short Line Guy 08-10-2011 - 07:13
  Re: Enduring NWP joelm 08-10-2011 - 08:41
  Re: Enduring NWP Espee99 08-10-2011 - 08:51
  Re: Enduring NWP 505Alive 08-10-2011 - 19:48
  Re: Enduring NWP Gene Poon 08-11-2011 - 07:47
  Re: Enduring NWP Appendage 08-10-2011 - 21:34


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