The Sweetener Users Association, which wrote to the Surface Transportation Board on Wednesday, is the latest trade group to complain about poor rail service as the Class I systems face a shortage of crews and locomotives.It's not just your sugary drinks, either. "In the past few weeks the STB also has received complaints from shippers of ethanol and grain and feed." Perhaps Nancy Bilyeau, Juliet Schor, and Matt Yglesias see in these supply challenges an opportunity to fast and do penance like those medieval peasants did. I see no evidence they're making horses available to help get the commodities to the factories.
“Issues with switching have forced companies to reduce production in key product lines and shut down manufacturing facilities,” Richard Pasco, president of the Sweetener Users Association, wrote in his letter to the board.
Shippers and the nation’s largest food and beverage producers rely on railroads for bulk movements of sugar.
“Intermittent switches at the plants are not only causing it to take twice as long to get the bulk rail cars, but even when companies get them, they are not consistently switching them into the manufacturing plants,” Pasco wrote. “For example, a manufacturer may have 50 rail cars of sugar close to their facilities and still run out because the railroad is not switching them into the plants due to a lack of labor.”
The group also told the board its members are experiencing delayed shipments, increased dwell times, and bunched deliveries of carloads.
“Actual and threatened embargoes at customer destinations routinely hinder shipping cars,” Pasco wrote.
20.4.22
HITCH UP THE HORSES LIKE IT'S 1825.
Food and beverage producers forced to curtail production due to delayed rail shipments.
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4 comments:
Any thoughts as to why Union Pacific is putting particular limits on private cars, specifically those for fertilizer?...why would these be more problematic that RR-owned cars?
Several things at work. First, historically, the railroads have battled the shippers over freight car utilization. Shippers will hang onto freight cars as cheap storage, to the extent that the demurrage charges for not promptly releasing a car are less than the cost of hiring or building fixed storage. That's gotten more testy in recent years, with precision scheduled railroading. On one hand, railroads start fining shippers for not releasing cars quickly (flexible demurrage charges?) but on the other hand they make fewer switches of the plant in a week, all in the interest of having balanced trip plans for their cars. Second, precision scheduling is a smokescreen for reducing the physical plant, which means the railroads have fewer varieties of fewer cars for hire, and that might contribute to the use of the private fleet cars. There are almost no railroad owned tank cars, and a substantial share of the covered hopper cars configured either for plastic haulage or grain haulage are in those private fleets.
Taken together, the railroads want to handle fewer cars, they want the shippers to unload the cars and make them available, but they're less willing to switch the plants on schedules the shippers prefer. All of that induces switching to trucks, if truckers are available. That's another complication.
But these are cars *owned by the fertilizer company*, isn't that correct? So they're not tying up any RR capital. And doesn't the railroad get the same price for hauling them as it would from hauling its own equivalent cars?
It's unlikely the fertilizer company owns the cars. I know the power companies own the unit train coal gondolas. The ethanol tank cars, as well as several varieties of covered hoppers for haulage of bulk commodities belong to a variety of fleet owners, there's General American Transportation (GATX) for one and a few others whose reporting marks I always have to look up. I forget what the car-hire rules are for per diem payments on leasers like those.
Although the rate is based on the weight or volume of the commodity, and the railroad gets the same payment (net of any car hire considerations) for the same size consignment in the same class of car (these used to be tariffs filed in Washington, now it's contracts in the legal department) the expense of the haul is different depending on how much switching is done. Move all the cars under one trip plan with one switch at the consignor or consignee, that pays off better than moving the same total number of cars under several trip plans with more than one switch. What is play value for a model railroad, e.g. switching five cars at the fish packing plant and one car at the scrap yard, is a more expensive proposition compared with flood loading a hundred cars at one elevator. Much of the implementation of precision scheduled railroading is the railroads using methods fair or foul to encourage shippers to request preferably large blocks of cars that get released for pickup more expeditiously.
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