Fast Lane Ground

[beentheredonethat]

Re: Cost of over the road (OTR) versus, trailer on flat car (TOFC)

Cost of over the road (OTR) versus, trailer on flat car (TOFC)

Let's use the example of Altlanta, GA to Los Angelas, Ca of costing approx. $2k per a trailer and a distance of 2216 miles. Currently the average US national diesel cost is $2.545 per/gal. OTR average fuel economy of 5.5 mi/gal 2216/5.5*$2.545=$1025.40 point to point, but if using meet points (more than one) the cost needs to be doubled $1025.40*2=$2050.80. So the approx fuel needed to relay two trailers form Atlanta to L.A. and two from L.A. to Atlanta would be $2050.80. Total of those four trailers sent on the rail appox. $2k*4=$8k, plus at the average diesel cost the rail is charging either a 16% fuel surcharge on total cost or $0.118 per/mi. ($8k*1.16=$9280 or 2216* .118*2 =$522.98 +$8k= $8522.98)

TOFC approx $8522.98 for 4 trailers (2 from Atlanta to L.A.) and
(2 from L.A. to Atlanta).

OTR approx $2050.80 for fuel, leaving $8522.98-$2050.80=$6472.18,
estimated drive time from Rand Mcnalley is 33 hrs. 45 mi.
approx 68 hrs on road time total for all drivers combined, so
unless drivers are getting paid
$6472.18/68 hrs.= $95.18 per/hr. OTR road cost less.

Which would explain why all the big OTR trucking companies (Schneider, J.B. Hunt, U.S. Express just to name a few) did not start putting trailers on the train until they could not get enough drivers to pull them.

There's a couple pieces of the equation not listed in your analysis, which makes it not a cheap alternative. It sounds like you are comparing moving a set of pups from LA to Atl and another set from Atl to LA. Which is 4 trailers but only 2 tractors are involved. Since you only gave enough fuel for 2 total tractors in the equation. Next the rails charge a different price for a 28' trailer then a 45' trailer. (almost double). Reread your analysis you showed the miles for one trip and the associated costs. You doubled it but somehow there are now 4 trailers moved. That would only be valid if the rails charge the same price for a pup as a long, but they charge more for a long (a lot more). For the rail cost you quadrupled the cost. Also, in many cases we need sleeper teams to get there for some of the enhanced lanes. For the sleeper teams, we need to pay 2 people not just one. Also, your analysis exlcudes all the outlays of captial to buy additional tractors. Also think of how many additional miles being driven will drive up the need for more mechanics to keep the tractors runing. There's tolls to consider, there's also highway mileage tax (yes UPS pays each state money for all the miles driven in their state). There's a lot of additional costs involved. UPS did this to try to match and in some areas beat the competition. One of the reasons FDX had the advantage is that they used non union drivers to carry the loads which costs significantly less then what we have to pay.

 

[mattwtrs]

The Fast Lane Campaign has really clogged up the lot at our center. This week the more mileage drivers started turning on our lot just as the package drivers are leaving in the AM. Talk about a traffic jam. Feeders needs more drivers and there is always a feeder school going on too. There are preloaders that will be driving delivery with less than 5 months of company seniority. Maybe the long wait time to go full time for anyone who wants it won't be heard any more.

 

[Anonymous Brown Clown]

Cost of over the road (OTR) versus, trailer on flat car (TOFC)

The comparison was for a set from ATLGA to LANCA a set back done by swapping loads. As for the rail charging almost double to send a 45' rather than a 28' trailer is not always true, due to a large number of the rails spine cars designed to carry 48' trailers. So in the case where they run out of slots on the triple 28' spine cars they have to load the 28' on 48' slots. Wasting a spot they could have loaded a 48' trailer which would result in lost revenue, therefore if you do a little investigating you will find certain high demand rail companies (most these days) have only two rates for intermodal freight 48' max length and 53' max length trailers. In addition by pulling loads off the train it increases the slight chance the train will arrive on time to its destination and they will not have to keep having contractors pull loads either because the train filled up or they were running too far behind. And when they use contractors a increased fee is charge to Brown and in our case 75% of them make it on time to make service. Plus when the train is late think of all the employees getting paid waiting for work (zero productivity,OUCH!!!), with increase chance of service failures double OUCH!!!. As for sleeper teams, they are paid milage which the two split so they technically are not getting paid unless they are driving, or waiting for loads which they get paid hourly for. True additional tractors may be needed, however if scheduling is done efficiently more present unshared tractors may be shared. Getting more of their money's worth, since the tractors only have a estimated life expectancy of 12 yrs. or 2 million km (taken from a press release about the new tractors ordered) after 12 yrs. they are literally rusting into pieces. And yes more mechanics may be needed. As for all the other cost, it does close the gap between difference in cost. But the cost saved by having a more reliable inbound of volume will save alot by itself. (REAL EXAMPLE) Two hubs in a metro area one closer to the rail yard therefore getting most of its volume from the train, the other further, thus getting most its volume from OTR. The further one is considered a gold mine, posting better: on time inbounds, productivity (cost per piece), and on time departures resulting in less O.T. pay and less chance of service failures. While the other is plagued with inconsistent inbounds due to the frequent late train, resulting in poor productivity more (O.T.). Plus a increase in service failures and damages since the departure times can not be changed, or the same could result on the preload end, plus drivers can only work so many hours.