SCM 4003 CH 6

Major cost element of the railroad

- Operation, maintenance and owner-ship of rights-of-way. - Unit costs decline as traffic increases.

Local carriers earn what percentage of rail revenues?

2.6%

How many mergers in the last year?

28

How many mergers and unifications have happened over the last 30 years?

28 mergers and 50 unifications. end-to-end mergers made to improve competitive position against other railroads, and against other modes (faster service)

Standard track gauge in use measures

4' 8.5"

Number and tyes of railroad carriers

574 Freight rail carriers. 7 Class I Rail carriers

How many Class 1 Companies?

7

Types of railcar

Covered hoppers , tank cars, gondolas, Flatcar

Cost structure

Fixed Cost, variable (labor, fuel), and semi-variable (equipment, structures, maintenance of tracks.

What did the Staggers Rail Act do for the railroad industry?

Improved price and service competitiveness after economic deregulation

What are some of the strengths and constraints of the railroad industry?

Large carrying capacity, almost any type of cargo and they assume liability for loss and damage. Fixed rights-of-way impedes door-to-door service. high percentage of damaged goods.

What are some reasons railroad domination started to wane?

Public funding for roads, waterways and air transport. Changes in economy and shipper service needs Financial plight and economic regulation

What is meant by intermodal competition?

Reduced intramodal competition due to mergers, with selective competition between railroads serving the same geographic region.

Current issues

Substance abuse, energy costs, small railroads, drayage (transportation in short distance) bad

What kind of demand is there for railroad freight?

The demand for freight is a derived demand based on the demand for products Majority of rail movements involve low value, heavy commodities

Intermodal Competition

The major source of competition in the industry, particularly from the motor carrier industry for non-bulk traffic.

Trailer on flatcar

Transports highway trailers on railroad flatcars. Combines line-haul efficiency of rail with the flexibility of motor transport. On-time deliveries, regularly scheduled departures, and fuel efficiency major reasons for growth.

Container on Flatcar

Transports shipping containers on railroad flatcars. Land-bridge operations key component of international trade. Double-stack container trains greatly improves rail equipment and train productivity.

Larges single customer of some railroads?

UPS