1. Rail Freight Transportation Author: Dr. Alan Erera

2. North American Mode Share, 1996 water air rail truck % of total ton-miles

3. U.S. Freight Movements, 1996

4. Railroad Freight Flows

5. U.S. Freight Railroad Economics In 1998... Market share: 40% of intercity tons Large share markets: –70% of finished automobiles –64% of coal (generating 36% of electricity) –40% of grain (domestic and export)

6. U.S. Railroad Economics II Movement statistics –Freight volume: 1.38 trillion ton-miles –Carload volume: 26 million carloads 8.8 million intermodal trailers and containers Fleet statistics –1.3 million railcars –127 million ton capacity Costs 26% less (57% IA) than 1981

7. Railroads are capital-intensive

8. Primary Commodities Rail Only –Coal 572 MM tons –Farm Products 158 –Non-metallic minerals131 –Petroleum 123 –Chemicals118 Intermodal –Transportation equipment6.9 MM tons –Chemicals, food, lumber, pulp & paper

9. Georgia Rail Freight

10. Growth in Intermodal

11. 17% of revenues –second only to coal: 23% COFC 62%, TOFC 38% Why? –Labor efficiency –Fuel efficiency (50% savings over truck) –Door-to-door service Downsides –speed, reliability

12. Container land bridge Asia - Europe market Double-stack N.A. network Why? –Hub-and-spoke efficiencies –Panama canal costs, queuing delays Long BeachElizabeth

13. NAFTA freight flows for UP

14. Freight Railroad Classification Class One –Operating revenue > $250 MM (1991$) –91% of total revenue, 71% of track –CSX, NS, UP, BNSF, Kansas City Southern Regionals –Revenue $40-250 MM, more than 350 miles –Wisconsin Central, Bangor & Aroostook, Alaska Local/Short Lines

15. CSX Miles: 23,000 Carloads: 5.1 MM Locos: 4,000 Railcars: 100,000 Revenues: $5.6 B –coal: $1.6 B –chem: $0.91 B –auto: $0.76 B

16. Norfolk Southern Miles: 21,800 Carloads: 5.1 MM Locos: 3,500 Railcars: 117,000 Revenues: $5.2 B –coal: $1.3 B –intermodal: $0.83 B –auto: $0.73 B –chem: $0.73 B

17. Union Pacific Miles: 38,600 Carloads: 8.5 MM Locos: 6,847 Railcars: 157,000 Revenues: $10.2 B –coal: $2.2 B –intermodal: $1.7 B –chem: $1.6 B –auto: $1.0 B

18. BNSF Miles: 33,500 Locos: 5,000 Railcars: 90,000 Revenues: $9.1 B –carload: $2.6 B –intermodal: $2.5 B –coal: $2.2 B –agri: $1.3 B

19. Kansas City Southern Miles: 6,400 NAFTA railroad –Gateway Western –KCS –TexMex –TFM –Panama Canal RR

20. Canadian National Miles: 16,000 Carloads: 3.5 MM Locos: 5,000 Railcars: 90,000 Revenues: $5.1 B –grain: $1.0 B –forest: $0.97 B –chem: $0.84 B –intermodal: $0.80 B

21. Locomotive Equipment They are mobile power plants –Diesel generators –DC and AC traction motors Road vs. switching Multiple units –consist –DPUs and helpers for heavy trains, grades

22. Pre-diesel UP locomotives

23. UP Road Locomotive AC traction (6000 HP)

24. CSX Roads in Two-engine consist

25. Yard switcher Often “retired” road locomotives Low HP (1500)

26. Boxcars Weather-protection Insulation, refrigeration, cushioning Auto parts, building materials, food products, bagged products

27. Automobile Racks (autoracks) Bi-level or tri-level Damage/vandalism protection Finished autos, trucks, vans, minivans

28. Load/unload operations: autoracks a type of “roll-on, roll-off” system

29. Open hoppers Hopper openings or rotary couplers Coal, coke, stone, sand, ores, gravel

30. Load operations: coal conveyors

31. Unload operations: coal

32. Covered hoppers load: round or trough hatch unload: hoppers (gravity, airslide) grains, corn, soybeans, flour, salt, sugar, clay, phosphates, cement, fertilizers, plastics

33. Tank cars Private (non-railroad) fleets Chemicals, molasses, water, diesel fuel

34. Gondolas Open or covered Scrap metal, aggregates, woodchips, logs, poles, steel beams, steel coils

35. Load/unload: Lumber on flatcars

36. TOFC Trailer-on-flatcar Highway trailers –LTL trucking growth in intermodal

37. TOFC train

38. COFC Container-on-flatcar ocean shipping containers, trucking containers

39. Double-stack COFC (1979) Articulated cars Clearances –bridge/tunnel investments

40. Load/unload: Double-stack COFC

41. Intermodal flatcar types Two-hitch flatcar –two trailers, each up to 40 ft length Articulated well flatcar –containers sit low for double-stacking –articulation: no conflict with rail wheels (trucks) –3 to 5 permanently joined units Roadrailer –truck trailers mounted on railroad wheel assemblies

42. EOT Device End-of-train device Caboose replacement –warns following trains Crew size reduction –brakemen, fireman gone –2-4 person crews –labor cost reduction

43. Rail shipping Shipment types –Unit train (bulk commodities) –Carload (FCL) –Less-than-carload (LCL) Train types –Unit train (through service) –Hot shot (intermodal; expedited service) –Bulk train (single bulk commodity) –Manifest (mixed freight)

44. Unit train routing Direct, through trains –From shipper to consignee Coal train example –Powder River Basin, WY to Dallas area power plant Petrochemical example –Elizabeth, NJ refinery to Houston processing plant –Interline

45. Intermodal train routing Expedited service –But, set-outs or pick-ups at consolidation points Load/unload intermodal yards –Portside (e.g. Long Beach) –Port adjacent (e.g. Oakland) –Inland Enroute yards –“hubs” –cross-towns (rubber tire transfers)

46. Manifest (mixed freight) train routing Load/unload facilities –Shipper sidings, public facilities (e.g. grain elevators) –Switching service to terminal railyard Hump yards –Classification sorting by destination –Receiving, bowl, departing –Hub-and-spoke concept

49. North Platte Hump Yard (UP)

50. US Deregulation: Staggers (1980) Market-driven pricing –only for route/services with competition Confidential service agreements, rates Abandonment and sale streamlined Impact –Costs down: 57% from 1981 to 1998 –Return on net investment: from 2 to 7% –Consolidation –Regionals and shortlines: 50,000 miles

51. Post-deregulation performance

52. Railroad misconceptions Not technologically advanced … –$247 billion investment since 1980 –Advanced signaling, communication, control Rolling stock outdated … –7,500 new locomotives since 1990 (37.5%) –Freight cars lighter, stronger, more reliable

53. BN Operating center

54. Freight railroads: no subsidies! Track privately-owned and operated –construction and maintenance Amtrak –pays “usage fees” to freight railroads Trucking uses public infrastructure –C&M funding via $0.55/gallon fuel tax but … –Estimate: covers only 2/3 of costs