Rob:
I’ll be happy to weigh in but; I’ll pre-qualify my comments by noting I am now Juniata “the retired” Guy. 😉
Some railroads - CN, KCS and BNSF have continued to solicit loose car / manifest freight and offer competitive pricing options to win new business; although they definitely tend to look toward larger shippers to provide that additional traffic. NS had been in this “club” until the psr fog descended onto their corporate offices earlier this year. CSX appeared to give up on loose car traffic years before EHH arrived on the scene but; Jim Foote is showing indications he plans to reverse that course. I note several recent changes in sales and marketing management that are encouraging signs Jim is serious about regaining manifest traffic.
I won’t deny that manifest traffic does require a bit more work on the part of the railroad in terms of first and last mile service but; most locals serve multiple shipper sites daily, each of which would be receiving and/or shipping multiple carloads. Tracking or tracing of shipments and waybilling is now handled electronically by the shippers themselves so railroads shouldn’t be incurring a lot of back office costs to support manifest traffic. Likewise; freight invoicing and payment is pretty much automated further reducing the need for railroad clerical employees. Too; most locals (at least those switching my former employer’s rail served sites) now operate with two man crews so crew costs should be improved over the past decade.
The rail to truck transload business is actually very robust and an excellent way for railroads to add manifest freight traffic. Like with large shippers; transloads normally receive and ship a fair number of cars daily. Short line railroads, large terminal operators like Savage Industries as well as a number of large national tank truck carriers such as Superior have been fairly aggressive at opening new transload operations.
From a shipper perspective; I have long been a proponent of these transloads as an ideal way to build new business in an area where trucking long distances might price you out of a prospective market. I used transload facilities extensively for certain chemical products where it made economic sense to use rail over the long distance and trucks from the transload for regional distribution. In short; transloads provide an excellent opportunity for railroads to convert long haul truck business to rail business.
If NS and UP will only take the reduced cost structure achieved through psr and use that to pursue new carload business opportunities in the same manner that CN has done (and CSX is talking about); I don’t see the carload business as being gloom and doom. The thinking in Omaha and Atlanta has to change though; from price discipline / cost reduction / operating ratio to actually growing business for the future. And I am highly doubtful this will occur with the senior management teams currently in place at UP and NS. The fact that CN and CSX are now led by former marketing guys and both are preaching growth is not a coincidence.
Curt
