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  • Freight decline over the last quarter century

  • Pertaining to all railroading subjects, past and present, in New Jersey
Pertaining to all railroading subjects, past and present, in New Jersey

Moderator: David

 #104094  by Jtgshu
 
This has always intreged me, and being that the forum is moving slow, it might be a good time to spark some discussion....

What are the major factors for the incredible decline of local freight service in NJ since roughly the 1970's?

I think its a chicken or egg kind of thing....

Was it the "restructuring" of lines for increased passenger operations, espeically NJT owned lines (i.e. the Coast Line), and Amtrak lines (NEC)??

Following the same idea, was it the increased passenger train schedules, and narrowing windows and flexibility for freight operations?

Increased costs for the use of the lines for freight service (to basically discourage freight ops)?

A reluctance of Conrail to focus on local freight service, and a turning of its back on the few cars a week shippers and instead focusing on unit trains, intramodal, and other like operations....

Cheaper and more flexible truck operations and operators, compared to the bullish "my way or the highway" (pun intended) mentality of Conrail, and railroads in general.

Of course, the move of factories and industries out of the region and away from active raillines has to be considered as well, but i don't think it is as much a factor as people think. There are still LOTS of industries that are lineside to raillines which had service at one time or another, which still operate and ship via truck.

For example, look at the two HUGE warehouse/transfer facilities built in the Perth Amboy/Woodbridge area on the Coast Line, right near the switch for "Cutters", and right on the Coast Line. What do these places do, who are they for, and was rail access even an option for their building there??

Will there be a resurgence in local freight operations on today's "passenger rail corridors"? With NJT (and Amtrak too) in such budget dire straights, I think it should be their responsibilty to drum up whatever revenue they can, and that should be a partnership with freight operators, whomever they may be for that particular line, to try to get more customers and carloads moved on the lines, equaling more revenue.....

Thoughts??????????

 #104110  by pdman
 
I think if a definitive history would be written about it, the following would be strong factors:

* decline of local industries

* decline of industries that receive and ship in large quantities (piggyback, box cars, etc.).

* those industries that remain tend to want less inventories, so they buy (and their customers buy) in smaller quantities in the quest for just-in-time supply chain practices. JIT is a big destroyer of rail demand, and this is seen in the auto industries in Michigan, Ohio, Kentucky, etc. They much prefer many mixed loads by truck to directly feed production lines. The former days were to have big warehouses, receive large quantities by rail, and feed the factories from these big depots. Today, the depots are bypassed.

* Conrail's pricing had to account for the heavy inbound, but no outbound loads. This pushed more freight away from them. A truck was able to more easily get return direction hauls from someone in the area.

* The EPA and other environmental laws pushed many dirty industries offshore to countries more willing to bear it in the tradeoff for employment and hard currency earnings.

* Penn Central, and many Conrail years were fraught with unpredictable service levels. When companies want to work their inventories much closer to just in time, they could not count on the rail carriers.

* For many years the belief among corporate traffic managers was that rail service was terrific from the West Coast to the Midwest. Once the moves had to come east from Chicago or St. Louis, the service died. To be fair, much of this was simply the terminalling that was needed in the handoffs at these two cities to the eastern railroads.

* The west shore of Harrisburg enjoyed some growth with rail service that could get there to feed large distribution centers that then shipped product farther east by truck. The economics of these were lower labor rates west of the Susquehanna River, cheaper land, and less uncertain rail deliveries as far as Enola.

* There are no large coal consuming power plants in North Jersey. To a railroad, if it had large volumes of these types of moves, then it would also push for carload and piggyback traffic as well with fairly economic rates. Take out a large auto assembly plant like in Middle New Jersey, or Tarrytown, or in Massachusetts, and that takes out of lot of the underlying volume economics favoring other moves as well.

* Today, North Jersey is an eastbound loaded destination. Rail cars and containers become empty there and starve for return westbound loads.

These are just some off the top of my head. I teach this stuff in my transportation economics and management courses. North Jersey is not the only place in the world with this phenomenon.

 #104125  by Lackawanna484
 
The collapse of manufacturing in NJ was pretty abrupt. It's an expensive state (electricity, labor, taxes, permits, crime, corruption, garbage, land costs) in which to do business.

I was thinking about that in the context of the Erie's Orange Branch and the DL&W Montclair Branch. Two dozen shippers, all of them out of business, plus Hartz pet foods, which was the last shipper. Tens of thousands of jobs, many of them unskilled, now gone.

 #104162  by BlockLine_4111
 
Very good points so far. Yes Mfg. has been leaving the garden state and JIT (Just in Time) favors trucking in smaller deliveries versus bulk. Any of you remember Panasote in Passaic ? They used to be the last (or next to last) customer on the Dundee branch probably when I began HS.

 #104165  by wis bang
 
Most of the manufacturing is gone. Distribution & re-packaging is the growth industry now. Containerization rules. Of our units jacknifed & slid into a ditch full of snow melt. Had loaded A/C, Micro waves & stuff in Indiana for RV's going out of Chicago by rail to a Red Deer Alberta travel trailer builder.

 #104355  by pdman
 
Completely agree with Lackawanna484 above re costs and hassles of doing business in New Jersey. It is almost as though someone had written a book about how to chase away businesses that produce wages and contribute to the economy.

Too, a rough rule of thumb today is that Canadian labor rates are 70% of those in the U.S., Mexico's are 40%, and China's are 10%. So, many of the long standing manufacturing would have gone in the late 1990s due to these new factors.

New Jersey appears to be largely a terminal, consuming state now. I would venture a bet that other than in-transit container moves that come through Port Elizabeth, the largest state export is now garbage.
 #104612  by henry6
 
Yes the decline of manufacturing all over the northeast as plants moved south and west led to the decline in the here but also the opening of the St. Lawrenc Seaway was the lead as large amounts of natural rescources could move in and out of the midwest negating the need to move it by train east and finished product west. However, larger ships and container ship cannot navigate the Seaway plus go coast to coast, so that rail is a better service for that traffic.
It was easy to attack the "BIG" railroads in the 50s and 60s as managers got to retirement age and didn't care as much. But the real cuplrit was the Seaway followed by the migration of industry out of the New England and Mid-Atlantic areas.
Also, I should add, that anthracite coal traffic fell as it was mined out; another reason for industry to be uneconimical.

 #104638  by JoeG
 
I'd agree that the most important reason is the decline of industry in NJ. However, the Penn Central merger and collapse played an important role in discouraging shippers from using rail. Service in the PC years, and probably in the early Conrail years, was so abysmal that may businesses converted to trucks, and, once having converted, never came back even when service improved.
Railroads still have bad customer service and are usually not seen as customer friendly. They are also not good at delivering consistent service. They may do relatively well for big shippers who have the clout to negotiate good contracts, but the are not interested in "loose car" railroading--that being cars not in dedicated trains. I think that, these days, traffic managers look at rail shipment for anything more time-dependent or fragile than coal as a last resort.

 #104655  by Ken W2KB
 
>>Today, North Jersey is an eastbound loaded destination. Rail cars and containers become empty there and starve for return westbound loads.<<

What happens to the massive amount of goods imported at Ports Newark/Elizabeth? Or is it simply insufficient to balance east bound?

 #104685  by wis bang
 
Ken W2KB wrote:>>Today, North Jersey is an eastbound loaded destination. Rail cars and containers become empty there and starve for return westbound loads.<<

What happens to the massive amount of goods imported at Ports Newark/Elizabeth? Or is it simply insufficient to balance east bound?
The huge walls of containers you see stacked near the port area are those 'sidlined' by the trade imbalance. Since most of the boxes are made in asia, it has become cheaper to stack them and build more! New York was always the destination of a huge amount of shipping. with the advent of the 'post-panamax' ships puts asian to us freight into long beach & on the RR to come east while the traffic thru the canal is fragmented across the gulf & east coast enroute to NY. European, South American and other atlantic freight pours considerable containers into New York the inland shipment of this freight results in trucks over rail.

Odd things do hapen; we do see a random east coast truck shipment for california but it's very rare.
 #104690  by henry6
 
...merger and collapse was a result of the decline of traffic. Management and unions of the rail lines (not just PC) were trying to maintain the status quo while the factorys were closing and moving away. They wanted to continue run train #xx even though there were no cars to put on it! Some of the blame has to go to government regulation, too, which gave railroads a reflexive managements stance rather than being able to make changes when they were perceived to be needed. Going through the ICC with a rate change often took a year or more, too long a time for the change to be effective.

 #104965  by Zeke
 
To add my two cents I worked on the Penn Central New Jersey division from 1970 until Conrail. Tell you the truth most of us(PRR, CNJ ,EL, LV)in train and engine service worked pretty darn hard to maintain decent service. Sometimes we dropped the ball but most of the shippers were satisfied with the service at least the ones I would engage. IMHO most shippers want Rolls Royce service at Volkswagen freight rates, true back then even more so today, playing all competing modes against each other in order to maintain the upper hand ie; rock bottom rates. I agree with all that has been said so far but perhaps there is one piece of the puzzle missing. When Conrail initially came to pass on April 1, 1976 most of us looked forward to the merger for a variety of reasons, the great shock was the LOUSY and I mean LOUSY management that came into power. Almost all of our top notch ex PRR, EL , LV and CNJ bosses were purged and replaced with ex New York Central people whose principal attributes were ignorance, arrogance and incomptence. Once this Green team got it's hooks into Conrail it was the end of any reliable service. Constant non stop harassment of good decent loyal employees ended any sense of morale in fact this approach led to an all out war between the Green team and rank and file labor that lasted until I left ( 1983 ) and went to Amtrak. One top manager told me in 1979 the future CR was going to have the River line and ex NYC main line from Boston to Chicago as the prinicipal mainline, no yards , no branch lines, no Pennsy side just a double track speedway for piggyback, ship containers and autoracks. Senior management was dead set against any form of loose car railroading. I believe they were not capable of running a first class loose car railroad until Stan Crane showed em how its done. I thought then as I do today who the hell could'nt make money with a double track New York - Chicago mainline. Looking at the present Northeast railroad moonscape this has to be one of the underlying factors in the accelerated demise.

 #104984  by pdman
 
I ditto Zeke's comments. Was there on the shipper side as well as knowing some of the former and new people. Saw all of these things. Up to Stan Crane there was a senior management team that was divisive, did not know much about running a carrier, and had cross purposes in daily action. There were dedicated people right underneath them, who operated in a "One Flew Over the Cuckoo's Nest" environment. VPs of Transportation who would have been more effective on a sitcom -- knew how to yell and fire people better than solving problems.

I heard one say once right after a big shipper stopped using rail service, "Good. It makes it easier to move trains with fewer cars, anyway." Until Stan came on board, all that the transportation department wanted was how to cut costs/budgets. There was a pretty good Marketing group that did a fairly good job at bringing in business and retaining what there was. Lots of conflict between the two.

Stan was a class act who knew how to turn things around. Knew that it all started with good, trained, and focused people. He knew that railroads needed adult leadership.

 #105003  by Lackawanna484
 
L. Stanley Crane set an extraordinarily high expectation, and then helped people to reach it. he had a huge job to do, but got people, the feds, the states, etc to cooperate and get it done. He was probably the guy who made people realize there was a light at the end of the tunnel, and we could get there, if we worked hard, and smart. And, were lucky.

The employee body count, though, was horrific. Although abandonments are what many people remember today, layoffs came in enormous waves.

 #105109  by pdman
 
Yeah, he came to speak to one of my classes when I was a logistics/transportation professor at Penn State University. He presented an analysis about how much would be saved by pulling up a fourth track on Horseshoe Curve -- the numbers were in track maintenance costs, signaling and communications, and a number of people (that I don't remember). He then gave a very well articulated technical, financial, and operational talk about the benefits of welded rail versus stick.

The industry lost something when he passed on.