Sunday, May 18, 2008

The second rise of the railroads

I was talking to a logistics guy on a plane the other day and he said the only thing keeping the railroads from coming back is that cargo has a tendency to disappear into limbo for a couple days before moving on. This means what is a 3 day trip by truck can be a 7 to 10 trip by rail. However, the price of shipping something by rail is a tiny fraction of what it costs by truck, so if companies can build into the logistics model the extra time they can save a bundle. They now even have “express” cargo trains which go from like LA to Chicago in 5 days, but they are closer to the price of trucks, and still take a couple of extra days.

What the railroad system needs to do is reinvent its self, and revamp the cargo handling, to match that of container ships and ports. Yes, certain items like heavy machinery aren’t easy to modularize, but most of the non-bulk goods are already in standard sized shipping containers. With a little redesign even some of the bulk goods like tanks could be modularized. Then each train is treated like a ship with cargo containers, to be loaded and off loaded in various “ports” (train yards) along the way. The cars are not removed or moved, large overhead gantry cranes move over the top of the trains taking containers off or putting them back on, or moving them to storage, or trucks for delivery. So a train becomes like a container ship that plies the country’s rails.

Trains would be for the most part made up of a single kind of car, that accepts standard modular container, and each container has redundant RFID systems that allow it to be recognized and tracked. This way cargo doesn’t get “lost” in a yard while the workers wait for the cars in front of it move. If the cargo needs to be moved to another train a crane moves it, and the whole operation takes a couple of minutes. This means that trains get in and out of the yards faster, and cargo gets to its destination faster as well.

With this system trains could pull right up to the dock sides in ports, take the cargo to be offloaded, and move it to an area away from the valuable dock side property, to a large purpose built yard to be sorted and put on other trains to get the cargo to the destination. The cargo could move on trains that would never go anywhere near it’s final destination. Companies could get reduced rates by letting their cargo go via a capacity-based route, like the packets that brought this information to your screen. Cargo from LA to Chicago that is priority would go straight to Chicago. But lower priority cargo might go via Tulsa or Houston, and come into the Chicago area on a less used North West track.

For most customers trucks would still be need for the “last mile” but a great deal more cargo could go by a timely rail system. The saving would help companies increase their margins, giving them a better cushion against rising energy prices, and the revisioning of the America rail system would help reduce the wear on the countries crumbling infrastructure, by more evenly spreading the transport burden between the roads and rails.

To pull this off will require some serious capital investment, billions of dollars would have to go into this and the trucking companies would scream bloody murder since they would lose huge amounts of revenue. Where the money will come from I haven’t a clue, but the depressed towns near major cities would be the obvious place to build the new port model rail yards.

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