Cowford wrote:I'm looking at costs not revenue. My goal is and always has been to make a lean, mean, efficient transportation system when I go into projects. The accounting, sales and marketing people can worry about the pricing, I just tell them how much it costs to make the thing work. It would be foolish to price something without understanding what it takes to run it. Also, it is foolish to consider your system as a whole and not segmented. The one size fits all is an antiquated model, and CMQ knows this. So if you tell me a $1,000 per car coming from Sarnia, ON to Hermon, I'm going to figure out how much it costs me to move that car from my interchange to Brownville over my bridgeline. Then I'm going to figure out how much it costs me to move it from Brownville to Hermon. Then I'm going to try to find a way to reduce the cost of the one which was more (or both if needed)... in this case I'm sure you can figure out which one that is. In terms of reducing cost per carload over certain lanes, theres a lot of things you can do but for the most part you can either tweak your train operations to match service requirements that will sustain and promote growth of your corridors, or you can focus on building density on your trains (while reducing risk of single revenue source, everyone should know Porter's 5 forces). For railroads, you want to do both of course. Understanding your cost (RR is a highly fixed cost industry so that isn't hard) to operate and what you need to make that happen isn't rock science. You also know your carrying capacity at those costs and you want to build line density to reduce your cost per carload. Then, you can worry less about every single car making money and more about the train itself making money.I don't think I said anything about big, all or nothing contracts.gpp, my comments were not directed to you, but to CN. What I'm saying, with respect, that I don't get this:
CMQ is essentially three systems, the Quebec portion, the Maine portion from Brownville south, and the Bridgeline inbetween BJ and Farnham. What you want to focus on is revenue per carload subdivided by each commodity within each of the three lanes.Let's take this one step at a time...
So what you're saying is: A car of propane comes in from Sarnia ON over western connection and runs over "bridgeline" to "Brownville south" to a receiver in Hermon... so in analyzing traffic/profitability, etc. one would need to apportion the revenue between the two segments, correct? If so, how would you do it in this case, if the entire CMQ division was, say, $1,000/car.