June 2002


Making the interchange work better will help simplify the carload network by taking out inconsistency and random events

"We will only consider e-compliant short-line operators for additional BNSF outsource opportunities. I challenge the ASLRRA to compel all its members to close completely this black hole." BNSF President and CEO Matt Rose

The basic individual carload continues to be the mainstay of the railroad industry -- not unit coal trains, not container trains. Consider: For the year ending 12/31/2001 carload business (defined as total revenues less coal and intermodal) accounted for nearly $3.00 of every $5.00 in North American Class I railroad revenue.

Every single carload not in a unit train goes from a local train to a through train and to another local for delivery, either to the customer or to a shortline. Interchange occurs when one railroad hands off a car to another. For Class Is, itís most often in a yard. For shortlines, itís frequently at a remote spot along a Class I branch or main line. It doesnít work as well as it could. Here are some thoughts on how to make it work better.

In a word, the carload business is rather messy compared to the point-to-point operation of intermodal and unit trains. How messy? BNSF, for example, found that in one month it had individual cars moving between more than 13,000 city pairs averaging a mere 11 cars per pair and about 80% on-time to destination dock.

Compare that to the relatively un-messy intermodal network. Says Rose, "In that same month, shipments moved between only 630 city pairs, but the average number of shipments between each pair was almost 380, or more than 12 a day, and on-time performance was over 90%." The difference is the degree of complexity, and to make the carload network work more like the intermodal network itís got to be made less so.

Yards were the obvious place to begin. As youíve read here before, making a yard work starts with making sure every train gets out of the yard on schedule. Yard dwell time measures how well itís done, and the trend is toward shorter dwell times. The next logical step is measuring dwell times at interchange.

On one shortline over a 12-month period we found the more than 21,000 cars interchanged ran up more than 300,000 cars hours in late interchange Ė more than ten hours per car. Worse, since every inbound is also an outbound at some point, the per-car delay doubles if you take both sides of the interchange Ė twenty hours per car.

Now consider the poor private car user. A friend who runs a tank car fleet for a large chemical company has to cover 30,000 moves a year. He says if he can get a 24-day turn he can handle his requirements with a fleet of 2,000 cars based on 15 trips per car per year. However, if service degrades to a 35-day cycle he needs to go out and lease another thousand cars. Adding a day per interchange event over a yearís time can do it, adding an extra $500,000 a year to this customerís car lease cost for worse service.

Thus the stakes are high. But the costs of process improvement need not be. If all shortlines were "e-compliant" they would not only know whatís coming at them when but would be able to tell the serving Class I whatís on the outbound track. Whatís more, regular guaranteed interchange times mean customers will know when their cars will show up, almost to the hour. And trip plans can be written to include the time between shortline interchange and the customer.

Thus itís safe to say that making the interchange work better will help simplify the carload network by taking out inconsistency and random events. However, thereís one more step. Unit trains are easy because they can come off the shortline interchange and go directly to destination. So an essential element of simplifying the carload network is to make it look like a unit train network.

Preblocking and directional blocking are a start. Take the shortline with an interchange on a main east-west line. Half the cars come from or go to the west, half look east. The connecting Class 1 takes everything west 100 miles to a service yard there to be added to the through trains. Dwell times are often a day or more.

Yet the shortline owner would be happy to work two interchanges a day, one eastbound and one westbound. The directional cars become in effect unit trains blocked for the distant yards, eliminating an intermediate sorting step and simplifying the network in the bargain. The interchange works to the carriersí and customersí advantage.

Isnít that what itís all about?


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