The Chinese government and several states have been subsidizing rail service from China to Europe. A phase-out is planned for 2023 now. Subsidies were supposed to end in 2022 but an extension was made for COVID.
There are various claims of inflating the amount of traffic.
Rates from Europe to China, the return trip, have been low, so that empty containers get returned to China. In fact, they are set at less than cost; around $100 per container, while the real cost is around $3000 to move an empty container.
But with container rates sky-high now and so many blank sailings from Asia by container liners, the rail service rates have been very high to Europe. Perhaps a subsidy is no longer needed. We’ll see.
Quality of service will be the main determinant of the success of this route in the long run. And we will see if the various countries on the route can figure out how to cooperate over the long run to get total rail shipment times down.
This interactive page shows key information about Class I railroads in the US. It displays the average speed of trains while moving, average dwell time in a yard waiting to be switched or unloaded, and the number of cars in service. You can select the figures for each Class I rail, and the time shown on the graphs, start and end.
The data comes from the Surface Transportation Board compilation of data provided by the railroads themselves, and is probably a bit late due to the deadlines for submitting figures.
The graph of speed for BNSF is especially interesting. It shows a recent spectacular jump, from under 25 mph to over 26 mph. Clearly the message is getting through to rails that they’d better move cargo.
Dwell time, spent sitting in yards waiting to be switched on, has for BNSF been rising recently, pointing to a new bottleneck. It had better start working on these problems.
We also don’t see which particular sites or segments of the rail line are contributing to the changes in the figures. That’s for each rail to figure out and make corrections. But seeing an overview of what’s going on will provide motivation for rails to do their part to keep congestion down. And a rail does not want to be perceived as slow-moving, for sure.
I hope we can count on the authors to keep updating this page, so the visibility will provide an incentive for rails to improve.
On the heels of a letter to CSX rail seeking explanations for poor service, the chair of the STB wants explanations from NSR. Why have rails in the East been letting their service level decline?
One explanation that’s been offered is a shortage of labor. While it’s true that rail labor is skilled and highly paid work, in the current situation there are plenty of people looking for better jobs. Rail offers those. And with unions to help, training should be available. So some effort should produce more workers, well trained. It doesn’t seem like a good explanation to me.
Perhaps the rail managements are thinking, “If everything else is congested, no one will notice if we have a little congestion too.” Another way to put it: lack of attention, and no desire to take action.
One interesting item in the article is the possibility of reciprocal switching in the US. Canada has had it for years, but the number of rails in Canada is smaller. The generic name for the practice is open switching.
The idea is that a shipper could take advantage of competition between rails if it were allowed to transfer shipments from one rail to another at specific locations where the rails met. There would be charges for the interchange to be sure, but the result might be a lower total cost of shipment.
There are significant hurdles to implement open switching. Workers have to be trained, and there would be multiple inspections required for safety and compatibility. And equipment would be needed to support interchange. Who would pay for it? These are bigger concerns in the US where there are six Class I rails, any pair of whom might be candidates for open switching practice at certain locations.
It’s not clear that allowing open switching or reciprocal switching as the STB calls it would really foster much competitive increase. However, there could be times, such as when there is severe congestion at an origin or destination, that open switching capability would save the day for many shippers.
It’s an example of meeting the need for resilience in our rail-using supply chains. I think the competitiveness aspect is fine, but the overall resilience is a much greater factor. It would put rails in a position to challenge trucking if switching could be done smoothly, even with charges.
Another view of reciprocal switching is presented in the final article below. It’s from the American Association of Railroads President, via Logistics Management magazine. He gives a positive view of rails’ contributions to the great supply chain jam-up of 2021, and talks more extensively about the ongoing discussion about reciprocal switching. It seems rails are not enthused about it.
Supply Chain and Logistics 