This time, he noted that the regulatory risk from PSR railroads’ tendency to “rationalize” (or stop serving) some intermodal lines threatens the railroad’s intermodal business in two ways.
“One is that right now, the [Surface Transportation Board] doesn’t even regulate intermodal. I think if we all of sudden start saying to public policy makers … we’re going to de-market all these lanes, [they will say] well, wait a minute; we want the STB to be involved in these businesses,” he says.
“And the second thing is … all this stuff about pushing back on truck size and weight, that a lot of people in this room would like to see? We’ve given up the opening door to say, ‘Well, if the railroads aren’t going to handle it, then, yeah, the trucks ought to be able to haul triples, or 130,000 pounds, or this, or that.”
Rose also questioned Precision Scheduled Railroading’s goals of scheduled trains and “balanced movements” — the ideas that trains run at the same time every day, and that every train in one direction must have a corresponding train in the other direction.
“For some of our businesses, we can do that,” he said, addressing the first point. “When coal comes out of the [Powder River] Basin, we get a call three hours in advance when a train’s loaded. We’ve got to put a crew in there. If we say, well, we’re not going to haul that load of coal until 1800, because that’s the scheduled time, they won’t be able to put the next empty under the spigot. We won’t get the next load. With intermodal, with international, when these big steamships come in, 15,000 TEUs [20-foot equivalent units, the measure of intermodal volume using 20-foot containers], it is a mad dash to get these trains loaded and get them out.
“When you hear this balance issue, this argument, look at the trade differences in our society today. It’s about 65-35 [the split of incoming versus outgoing volume]. We’re never going to be balanced at our railroad. Now, maybe every other railroad can be balanced. Best wishes. … This idea of balancing, it’s not going to work on our network.
“So I think you have to really be careful with what is PSR, and what is going to impact the customers. Is it going to make a better cost, and a better service for customers? If it is, count me in, I’m all for it.”
See Trains’ earlier story on Matt Rose’s comments on rail automation.
Customer service should be the number one focus of railroad managers. Matt Rose and BNSF have proven the validity of that argument. Cost cutting strategies that lose focus on the customer may give shark investors a great short term return but bet your life they will bail out of the stock before the long term consequences hit. Will PSR lead to a future PC/Conrail like bailout, nationalization or bankruptcy or will the PSR railroads focus first on the customer?
BNSF got a sugar daddy in Warren Buffett so they are able to run a railroad. CSX got leeches in EHH & Mental Ridge so they can only run a strip mining operation
The aggregated cost efficiency of rail works for empty hauls too. So do what the truckers do. Triangulate-move the empty boxes from the inbound black hole to the closest outbound load generator. Which might be Amarillo, Shreveport or Savannah. Means you need to serve a lane originating at those points, but each is on an important intermodal train route.
Whilst perfect balance is never going to achieve, I don’t think that’s a reason to dismiss trying to balance traffic at all. I presume he means 65 % Eastbound intermodal from Asia , vs 35% westbound to Asia, will the way round that is to mox international and national intermodal .
As for black holes , they are opportunities to find backhauls , given the back service is runnng anyway , costs are low.
There’s several major as there called black hole cities out west. They’re cities that take in more loads than they ship out. Denver Las Vegas Reno Phoenix and most of Montana come to mind. You know going into there with certain equipment your deadheaded out and charge for your deadhead miles out.