Back On Track Podcast

Cargo trains and their impact on various aspects such as supply chain, production, market structure, labor, and capital issues are discussed in this podcast episode. The majority of global trade is done by sea, with containers being transported by short-distance trucks to rail yards. The cargo is then loaded onto trains and transported to different locations. The freight industry is facing challenges such as labor shortages and infrastructure maintenance issues, leading to inadequate upkeep and safety concerns. Freight companies prioritize saving costs over safety and are reluctant to upgrade their trains to electric brakes. Trucks used for transporting cargo put immense pressure on tires, causing damage to roads and highways. Trains are cleaner and more efficient than trucks, but the freight industry lacks incentives to modernize and electrify the rail system. With the government's support and public pressure, change is possible. Okay, welcome to the Back on Track podcast. In today's episode, we will be talking about cargo trains and their effect on basically everything. Today, we'll dive into the effects of the supply chain, production, market structure, and labor and capital issues, and how all of them affect each other, and see how everything is intertwined. We will also see their effect on society, on mobility, and environment. We should start with a basic overview, right? I suppose that would be a good idea, Ty. First, we need to understand how the entire system operates. So to understand the entire system, we need to understand the big picture that is bulk trading through international trading. This is done by sea because trains can't swim. In fact, 90% of the world's trade is done by sea. These boats, these container ships will roll up to the docks, and their containers, or whatever have you, are taken off by cranes. This cargo is loaded onto short-distance trucks. This is called drainage. These short-distance trucks will take these containers, or cargo, to a rail yard very close to the harbor, and then the cargo is loaded off the trucks onto trains. At these rail facilities, most notably known as intermodal yards, the containers are stacked on chassis, which is the regular cargo truck that is on a train, that's connected to a train, and these are usually stacked two containers high. This will be a very minute detail that we will cover later in the podcast. Remember, two containers high. These trains will then travel from intermodal yard to intermodal yard, and they will be unloaded onto drays, or trucks, and then loaded onto different trucks. This is because freight trains and freight companies have different jurisdictions in the country, and this is important why. This is important, though, as the freight trail across the country is broken up between seven companies. These are Pacific, BNSF, CSX, Norfolk Southern, Canadian National, Canadian Pacific, and Kansas City Southern. This will also be important later. Back to the rail yards. The trucks will either take the containers to the other trains to be transported elsewhere, or to the stores or warehouses where the goods belong. This process is relatively cheap, and it only costs around four cents per mile to move freight only on train, meaning going from LA to New York City will only cost $100, which is not that expensive. Compare this to moving a freight on airplane, it will cost 121 cents per mile, which is way higher. Such a vast and complicated system requires labor, but more on that, this video is sponsored by ACDC Econ. This video wouldn't be possible without the help of the GOAT, Jacob Clifford, who is, I'm so glad that he sponsors this video, and you need to check out his video, his YouTube channel, which is called ACDC Econ, and to get back to our regularly scheduled program. Okay, this operation is necessary for this to happen, our train engineers. The train engineers, dispatcher, and train yard managers. All these people that make the system, like the freight trains move, they're really essential to the process, and one of these jobs are the freight conductors, and to be a freight conductor, you need to obtain federal certification from the Federal Railroad Administration, or the FRA. The certification process includes meeting educational qualifications and completing training programs provided by railroad companies or vocational schools. Railroad companies have implemented furloughs, which is temporary layoffs as cost-saving measures, and you'll see that become a pattern. They love saving costs. These furloughs have resulted in shortage of available workers in the industry. The pandemic has further exasperated these labor shortages within the railroad industry. The labor shortages has led to a decline in railroad infrastructure maintenance. With fewer workers available, there's a lack of manpower to address necessary repairs and upkeep. As we know, the lack of workers can lead to inadequate upkeep and disasters. This can be seen with the Ohio chemical spill. Two major railroad labor unions are considering going on strike due to frustration with corporate manipulation and labor conditions. Workers have faced challenges such as limited sick days, absence flexibility, no absence flexibility, and the potential for termination if they take time off. President Biden is actively involved in negotiations with railroad companies to prevent an estimated $2 billion loss to resolve labor disputes. The aim is to find a resolution that both benefits the workers and the companies. A little bit more about the operations and the people that actually work in these companies. Another essential part is the rail yard operations are overseen by dispatchers who control the movement of trains by switching tracks, and dispatchers' job is to ensure the safe and efficient routing of trains within the yard. The switchers, also known as yard switchers, is responsible for uncoupling and breaking down the train, as well as assembling new ones. The shutting engine driver operates the locomotive that moves the freight train within the yard. Rail yards consist of multiple railroad tracks, each serving a specific purpose. The main line is the primary track used by trains to travel between different destinations. Switching tracks connect one side of the railroad to the other, facilitating the movement of trains within the yard. Slide lanes are additional tracks where railroad vehicles or freight cars can be temporarily parked or left. Rail yards are vital hubs where trains are organized. Freight cars are sorted and trains are assembled for various destinations. You might have cargo mixed here, you might have oil with containers, whatever have you. It depends on where it's going, and that is what is decided at rail yards, using what you talked about before, side, with like sidings and stuff, right? With the dispatchers, it's job is essentially to make sure that everything is an oil process. It needs to work smoothly. And these are dynamic and very complex environments, as you can imagine. With dispatchers managing track switching and various personnel handling shunting and freight car movement, the cargo management is actually very interesting. Rail yard and cargo management systems employ advanced technologies to track and manage cargo throughout its journey. These systems utilize GPS, RFID, or other tracking methods to monitor the location and status of each cargo container or car in real time. This is important because they can often, rail yards themselves can span miles of just straight track, and without these, it wouldn't be possible. Cargo train management systems optimize the loading and unloading process by utilizing automated systems or specialized equipment. Cargo train management systems often integrate with inventory management systems. In the world of freight trains, they are facing significant challenges, including labor shortages and infrastructure maintenance issues, as we said before, and this is causing a lot of friction within the system. Since there is so much work to be done, and they surely give the labor workers fair labor rights, such as paid leave and vacation days, right, because this is such an expansive system, right? You'd expect that, right? Yeah, but I mean, you have so much work to do. Surely there would be like sick days, and like, time off, right? Yeah. Well, you would be absolutely incorrect. Wow. These greedy companies, they work under terrible conditions. Workers work around 12 hours a day, me personally. I can't do 12 hours a day. I can't. I can't do 6 hours, 8 hours of school. I can't do 7 hours of school. And the greedy companies make the workers work on top of zero sick days, off in general. So you're sick? Well, too bad. You're sick. How many weeks of work? So you're not surprised when there's a labor shortage in the industry. They're really causing it. And also, no time off, either. So, let's say, old grandpappy dies, can't go see his funeral, you know, you're going across the country on a train. You know, it's insane. I can't do that. This is one of the many efficient, these are one of the many effects of labor has on the freight industry. Within the thin labor force, it creates super-complex schedules for passengers, companies, and workers alike, as we were talking before. This is why freight trains have right-of-way than passenger trains. And I don't know if you've ever taken the metro, but it sucks. So it also helps that, it's because they have really, since freight trains make the money, they get rights over everybody. So you're probably thinking that the government wants to do something about this, right? Well, you're absolutely incorrect. In fact, the government has cut down on restrictions and safety controls due to some good old money from the rail companies. Well, cutting down some safety measures causes what? The East Palestine accident in Ohio. It causes a massive national disaster. I believe I saw somewhere, I read an article that said that it was one of the biggest national disasters in United States history. Within that same week, there were, I'm pretty sure there was another derailment in South Carolina, or South Carolina, and another one, but it's kind of crazy that they can get away with it. Yeah. Taxes. You know what I'm saying? Okay. Freight rail is such a moneymaker that, because these cut down in prices for labor, having access to rail whenever they please, and the rapidly reducing cost for regulation and safe freight travel is just like such a big issue that needs to be addressed by the government. Yeah, but it's kind of hard when these six or seven companies have a chokehold on the industry and they control everything, they control passenger rail with Amtrak, and because they have no labor force, you know, they're forcing trains to be like almost three miles long because they can't have multiple trains to break it up, they just got to stack everything on one because the labor force is so thin. But you think that the government is trying to fix the problem and you would be incorrect, or the companies are trying to fix the problem, incorrect. Amtrak's railroad tracks are poorly maintained because of the labor force. Companies also won't fix them unless they physically can't use them anymore. This, ignoring repairs, helps them save money. They won't upgrade their brakes on trains from air brakes to electric because it would save them money. Are you sensing a theme here, Cy? I am. I think it looks like they really like saving money. Yeah. There's more where that came from. It jeopardizes, not changing the brakes, jeopardizes their safety, but who cares? Yep. They save money. And one of the reasons why is because they can't upgrade one train at a time from air brakes to electric brakes because the going between air and electric is too complicated for such a thin labor force, and also not really possible, so they'd have to upgrade all their trains at once to electrical, and if this happens, that's a lot of money. And if the government forces them to do that, these freight rail companies are going to force all their freight onto trucks, and this will bring their own externalities that we will cover very soon. Just going a little bit off topic, so as we were talking about labor unions and stuff before, I just wanted to say that there's also examples of trains and labor strikes. When I was in Paris, or when I was in London, I remember there was talks about all these workers going on strike. They would just not go. They would just quit because they weren't getting paid enough. Their hours were absolutely crazy, so I think we'll probably see that sometime soon because these people definitely are going to get fed up. When I went to London, trains shut down because people were on strike because the pays weren't. The issue is they're just willing to do that because they have so many other companies there, and they're the only six that control it. It's not a modern day monopoly that's not getting addressed over there. Going back on track, actionality. As you said previously, about forcing the cargo on the trucks. These trucks destroy our roads, highways, and interstates. These freights on these trucks have an average of 35,000 pounds of cargo. Wait on them. I can bench that. You know what I'm saying? I don't believe that. You're a big guy. I'm a big guy, yeah. This is immense pressure on these tires. Tires have something called friction coefficient. Regular sedans or SUVs average around 0.2, and freight trucks average around 0.7. Like to jump there. Yeah. It doesn't seem like a lot, but it actually is a lot. This is a sharp increase, and this increase in friction can be the main source of blame for the deterioration of interstate highways. This deterioration not only costs millions of dollars each year to fix, but this pollution caused by producing the asphalt and the concrete is insane. Not to mention the pollution created by the trucks themselves. You know when you sit behind a stoplight and you see the truck pounding the accelerator and you see all that black powder coming out? Yeah, yeah, yeah. That's what would happen if we tried holding these companies accountable because they have so much power. You can't really break it up. On the topic of air pollution, trains run cleaner than trucks. According to the AAR, Association of American Railroads, freight trains run three to four times cleaner than their trucking counterparts. Not only that, but they move hundreds of shipping containers. As before, they're too high so they have the ability to do that. Rather than the truck being limited to one singular container, that's what a regular trailer is. However, their efficiency can be cleaned up because a majority of the trains are diesel. Although these diesel trains only account for half a percent of all American air pollution also provided by the AAR, electrolyzing the system would modernize and clean up the look of rail in America. If you look at Europe, almost all of their freight trains are electrolyzed. Not to mention their passenger rail. They have high-speed trains. You said you're in London, right? Yeah. You know the trains are cool? Yeah, the trains are actually nice trains. They get you to the location. They're on time most of the time. When I went to France, when I went to England to France, I took a train that was only like an hour or two. If I was here, it would take ages. Because, like we said, the freight companies are playing with the time that our passenger rail has because they don't have jurisdiction over the rail. Exactly. Even if we look at East Asian countries like Japan and China, they have the Shinkansen, they have Maglev trains, and it's like, wow, they are so modern. If you look back at our rail, we have 30 smoggy diesel engines rather than that of the high-speed electric trains. Electrolyzing the system would not only revitalize rail in America, it would also kind of clean up a little bit. Not much, but half a percent is something in the grand scheme of things. But why won't these companies electrolyze? Well, I'm glad you asked. Rail won't electrolyze because freight companies just don't want to. They really have no incentives to. We previously went over that private freight companies own a majority of the track, as we were talking before, and they decide what they want to do with it because it's theirs. They don't really have to listen to the government. What we can do is by utilizing government officials and Twitter, users like to electrolyze. There is no excuse. If we want to, and if everybody decides to put their mind to it, we can change. You hear that, Mr. Fury? Twitter. Twitter. Twitter users. A lot of these Twitter users actually have a good following, and we're kind of waking up to the kind of things that these kind of companies are doing. I think you highlighted that two high containers is being important earlier in this podcast. Can you go a little bit more into that? These two high containers, right? If you look at European countries and other electrolyte systems, maybe even the Acela, the Amtrak high-speed trains, they can't really go up to speed. They don't win the track. Tracks in America are actually mostly built in the 1830s. They still work, I guess, but this is just a poop sandwich, you know what I'm saying? If you look at these European countries, you see how they'll have, in between the tracks, they'll have a pole, and then they'll have electrical lines running so they can be electric. The freight companies, as we've seen, excuses, excuses, excuses, using the pandemic, they're using the two high containers as an excuse to not electrolyze because the two high containers will interfere with possible electrical lines if they were to be present. That's one of the reasons why they're saying, oh, we can't electrolyze. It's kind of embarrassing if you think about it. America is known as obviously a first world country. We have so much in taxes, we have so much government spending, and there's third world countries that are already starting to electrolyze, and they're starting to get on track with what society actually wants. And there's America here who has government spending, has money, and just can't do it because of these monopolies nowadays. Those are the main reasons we're falling behind almost every European country and East Asian country. It's a topic not covered, but where it really should be. Trains, as we've discussed, are one if not the most efficient way to travel and transfer goods, and it's a shame that it's overlooked. Let's get this industry back on track. How long was that, 90 minutes? 19.