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Freight Recession??

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erierail

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They will not reduce m of w on their main lines. Their stated goal is haul more big dollar high value inter modal. Speed and getting over the road is essential. The only issue maybe reducing underutilized double tracks or passing sidings. But I think Amtrak will benefit from the down turn.
 

Acela150

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Yes. There is a recession in freight. My terminal has furloughed about 15 guys with the start being 10. 3 Trainees were basically fired. More furloughs are coming too. I'm going to be one of them..
 

afigg

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Yes. There is a recession in freight. My terminal has furloughed about 15 guys with the start being 10. 3 Trainees were basically fired. More furloughs are coming too. I'm going to be one of them..
Sorry to hear that.

According to the CSX 4th quarters they posted on their website, Coal volume shipments were down 32% in the 4th quarter. I saw the 32% figure in a business news report, so I went to the company website to look up the numbers from the source (4th quarter financial report). Metals volume was down 23%; Intermodal and Automotive shipments were up 4-5% so it is not all down. Looking deeper into the CSX report, the decline in coal exports for both Thermal and Metallurgical coal is greater percentage wise (-37% 4th quarter) than the decline in domestic coal shipments for the 4th quarter (-29%) and the year. So CSX coal shipments are getting hit by both a drop in domestic demand and the strong dollar & problems in China causing a major drop in exports. Which has implications for the Cardinal and for that matter the east coast LD trains in terms of less freight traffic.
 

neroden

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Coal is crashing and will never recover. This is hitting most of the US freight railroads pretty bad, though CN has very little exposure (you can look up percentage of revenue from coal for each railroad).

Some more details on the coal market: China has officially decided to stop importing coal entirely, as soon as possible. They have also declared their intention to reduce the use of domestic coal,. and they've actually shut down a lot of coal power plant production in the last year. Meanwhile, the US is of course shutting down large numbers of obsolete coal plants to comply with the mercury regulations. These are all good things. The railroads will have to get used to not having coal traffic.

(Full disclosure and disclaimers: I own stock in CN. I used to own stock in NS, but I sold it when I saw their coal exposure. I used to own stock in CSX but sold it years back. I also own stock in Berkshire Hathaway which owns BNSF. This is not investment advice and I am not your investment advisor.)

Personally, I hope that intermodal traffic will rise substantially. This will on the whole be good for passenger service because fitting a 79 mph train into a schedule of 50+ mph intermodals is a lot easier than fitting it into a schedule of 20 mph coal drags; the difficulty in scheduling increases with the difference in running speed.
 
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cirdan

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Intermodal traffic is sensitive to both speed and reliability, much more than other types of railroad freight traffic. Much of manufacturing these days relies on just-in-time delivery, with stockpiles being eliminated as far as possible. The production of an entire plant could thus be endangered if some vital parts aren't delivered on time. The costs of such a mishap outspan the differential in delivery costs by far, so in the long run railroads must not just work on being cheaper but on being reliable and on time all of the time. A railroad that thinks more in these terms automatically becomes a better railroad for passenger trains too.
 

Just-Thinking-51

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Fuel price are down.

Trucking freight is questionable levels. Even with the lower fuel cost.

China is slowing down.

Shipping of ore, and coal have dropped of the chart. Cargo vessel (Bulk, Container, and general freight) are begging for work. Only Tankers are making money. Tankers are very aggressive in there pricing. (If you want to be a billionaire that the sector to be in.)
 

abcnews

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This would be an excellent time to try to initiate a daily Cardinal. If the traffic comes back, with ample notice, they could always cut it back to three days a week.
 

Thirdrail7

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Yes. There is a recession in freight. My terminal has furloughed about 15 guys with the start being 10. 3 Trainees were basically fired. More furloughs are coming too. I'm going to be one of them..
Can you bump elsewhere or does there need to be a vacancy to bid?
 

Acela150

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Yes. There is a recession in freight. My terminal has furloughed about 15 guys with the start being 10. 3 Trainees were basically fired. More furloughs are coming too. I'm going to be one of them..
Can you bump elsewhere or does there need to be a vacancy to bid?
Not enough seniority to bid or bump. I only have about 6 months. One guy who was in the initial 10 has been bouncing like a ping pong ball. He has gone basically to almost every terminal in the Harrisburg Div and can't find a solid place.
 

Just-Thinking-51

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Only Tankers are making money. Tankers are very aggressive in there pricing. (If you want to be a billionaire that the sector to be in.)
I'm told the only reason tankers aren't bankrupt is because the vessels are parked off shore as containers for the surplus.
gcaptain.com is my source.

Record level of quarterly profits for tankers, almost record low for bulk freight.

There was a story on parking off shore to hold product, however I did not readily find it. Something about the price spread not been good enough to do this year. Full crew vessels are not cheap. There are stories of unloading delays, and stories of record level of imports of crude at ports.

My point early is China has slowing down the global transportation of goods. This impact the trucking sector, and the freight railroads.

Trucking can operator at a much lower pricing point, due the free use of the roads. When freight slow down more of the intermodal hits the payment. Trucking companies much easier to right size the fleet. Downward is easier than up, but growth "up" just takes longer.

Truck driving is a shake and bake type of school. 4 week is what I hear advertised. There is some on-job training at most company after a noobie show up with a CDL. About a another 4 weeks driving with a coach. If not team driving with a coach sleeping in back. Thats all you need to earn 40k. Of course you only get home once a month for 4 days...
 

neroden

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Trucking standards need to be tightened. There's no way trucking can be cheaper than intermodal for the big LA-Chicago or even Chicago-New Jersey hauls... unless they're cutting corners on safety. Which by all accounts they are.
 

Just-Thinking-51

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Trucking standards need to be tightened. There's no way trucking can be cheaper than intermodal for the big LA-Chicago or even Chicago-New Jersey hauls... unless they're cutting corners on safety. Which by all accounts they are.
Ok that implies Intermodal providers are leaving money on the table. I don't think they are. Trucking biggest issue is truck driver. We like to have a life outside of the truck. So intermodal cover the shortage of drivers, and the need to keep them local. Is it cheaper than a single driver moving a single box? Maybe at first, but I am sure the price point is at or just below what it cost to move that box all the way by truck today. Freight is very fluid depending on price. Certain ocean shippers company have given up on the Panana Canel, while east coast ports, are widen, and deepen shipping ports hoping for those same ocean ships to stop by.
In short to keep your drivers moving you send less freight via intermodal. Operation Rates of 99.9% and the trucking companies still run. Our free use of the roads, is just one of the hand out we get. Ex-Convict, Ex-Military employee bonus. We like the free government money, just for doing what we were going to do anyways. "Hire anyone with a pulse that will stay out for a month at a time."

As for the safety issue. I see a crackdown going on. It does seem a bit off target on some issues, but on others right on the mark.

YMMV
 
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neroden

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Oh, so you think the trucking companies are operating at a *loss* in order to keep the truckers working. So the trucking companies are leaving money on the table. Doesn't sound like their style, given the reputation for cutthroat mistreatment of workers, but I suppose that's a possibility.
 

Just-Thinking-51

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Intermode providers would be the railroads.

Trucking has a shortage of qualified drivers, it's our biggest issue. 110% turnover in driver position is the industry normal.

Do you fight to keep the drivers you have or beg to hire new drivers when freight start to moving again.

Welcome to my galaxy.
 

Medic981

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I have seen a recent decline in coal trains on the rails in Colorado. However, there appears to be an increase in oil and gasoline tankers in recent months.
 

XHRTSP

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I'm still getting a lot of work hauling freight world wide in my 747, I hope that keeps up. Cheap jet fuel is certainly helping.
 

afigg

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Railway Age report on total freight rail traffic in the US: Carload traffic down, intermodal flat. Excerpt:

For the week ending Jan. 16, 2016, total U.S. rail traffic was 506,433 carloads and intermodal units, down 8.2% compared with the same week in 2015, the Association of American Railroads (AAR) reported on Jan. 20. U.S. carloads fell nearly 17%; Canadian carloads dropped nearly 14%; North American (U.S., Canada, Mexico combined) intermodal up nearly 1%.

Total carloads for the week ending Jan. 16 were 242,670 carloads, down 16.6% compared with the same week in 2015, while U.S. weekly intermodal volume was 263,763 containers and trailers, up 1.1% compared to 2015.
Intermodal shipment of containers is up, so it is not that the freight railroad are losing business to truck companies moving containers. It is the shipment of of bulk commodities that is down, especially coal. While it is hurting the bottom line for the freight railroads that moved a lot of coal, it is presumably contributing to the improvement in on-time performance for CSX (and Amtrak).

One of the viewgraphs in the 4th quarter 2015 reports that I found on the CSX website has a bar chart for on-time arrivals of trains arriving at yards (note this are CSX arrival OTP numbers):

4th qtr 2014 = 43%

1st qtr 2015 = 41% (worse OTP in the 2010-2015 period shown on the chart).

2nd qtr 2015 = 48%

3rd qtr 2015 = 54%

4th qtr 2015 = 61%

However this is still down from the 85% OTP achieved in the 1st qtr of 2013.
 

frequentflyer

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Of course Freight is down, have you seen Amtrak's status map this month? Scary how many trains are arriving on time.
 
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