Category Archives: Rail

Posts about railroads and railroading, including intermodal rail.

Auto Truck Aid to Railroads

When railroad-truck competition began to heat up in the early 1920s, trucks were seen as a means of getting unprofitable short-haul “less-than-carload” freight off the rails, freeing rail capacity for more profitable long-haul business. Today, shippers and truckers are increasingly shifting over-the-road freight to intermodal rail, which allows truckers to get less-profitable long-haul shipments out of their trailers. The following article from 1922 looks at rail-truck competition in the post-war (World War I) economy.

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The Traffic World, Saturday, Jan. 21, 1922

THE MOTOR TRUCK has already become a necessary supplement to the railroad and will undoubtedly become more and more important to them as times go on, said Mr. [Alfred Joseph] Brosseau, president of the International Motor Co. [later Mack Trucks, edit.] and secretary of the National Automobile Chamber of Commerce, in answer to the question, “Is Highway Transportation an Aid to the Railroads?” before a meeting of the Shippers’ Conference of Greater New York, held in the rooms of the Merchants’ Association, last week. Mr. Brosseau outlined the value of the motor truck as a method of helping the railroads get rid of some of their expensive and unremunerative short haul traffic, and went so far as to predict that in the coming business revival the motor truck would be the means of saving the railroads from government ownership.

“If it saves us from government ownership of the railroads, the motor truck will again have justified itself.” — Alfred Joseph Brosseau.

Touching upon the question of taxes, the speaker said that the motor truck had paid its share and that, in the opinion of men who were supposed to be familiar with the problem, the truck ought not to be taxed any more than the freight car. He said in part:

“If you ask the question, ‘Did motor truck transportation over the highways help the railroads during the busy war years?’ I am sure the answer will be ‘Yes.’ Without the motor truck, transportation would have broken down utterly. Many industries would have been seriously embarrassed, and the country would have faced the possibility of hunger.

No one who is at all well informed regarding traffic conditions during 1917-1920 will deny this. On the contrary, they will agree that the motor truck was a great help to the railroads during this period. It goes without saying it served the public also.

As you all know, business has been poor for the last year and the railroads can now handle all the traffic that is offered. We are asked if the railroads are now helped by the motor truck. My answer is ‘yes,’ for business is going to be good in the near future, and when it is the railroads will again be unable to handle the traffic. We shall then have delayed shipments, embargoes, blockades and the truck will again save the situation for the railroads and for the public. It may also save the railroads from the fate they so narrowly escaped during the last traffic jam — permanent government ownership.

If the motor truck is eliminated now and is not available when the next boom is upon us, the railroads will fall down so hard that government ownership advocates will have an excellent argument to prove that the government should take over the railroads. If it saves us from government ownership of the railroads, the motor truck will again have justified itself.

I do not know the exact proportion of the existing terminal facilities needed to handle l.c.l [less-than-carload shipments by rail car, edit.] package freight moving less than 50 miles, but we are all sure that it is a very considerable part of the whole. It may be one-half, or one-quarter, but whatever it is, it should not be devoted to the handling of the non-profitable l.c.l package freight that can best be moved by motor trucks. And again, if the railroads were relieved of this n0n-profitable l.c.l. package freight, the terminals would then be ample to handle the long-distance freight. The railroads would not need $1,000,000,000 a year for additional terminal facilities and would have enough equipment to move all long distance freight, even during boom times. That is the answer to the question, “Is highway transport an aid to the railroads?’

— 30 —

Alfred Joseph Brosseau was the president of Mack Trucks for 17 years in the 1920s and ’30s and notably said, “The forgotten man in transportation is the man who pays the freight.”

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1915: Beer, Whisky & Brandeis

CapdomeTopicsWashIn 1915, two years before the U.S. entered the First World War, the brewing industry and railroads “battled” over the freight classification for beer. A change in classification would affect the rates pegged to that class. The Brandeis mentioned in this Traffic World article, chosen mostly for its subject matter and style, I’ll admit, is none other than future U.S. Supreme Court Justice Louis Dembitz Brandeis, whose progressive stance on social issues and fight against industrial monopolies, including railroads, apparently didn’t endear him to the editors of The Traffic World (see note below).

The Traffic World, July 3, 1915.

Beer and the Brandeis Theories. — “The Charge of the Teutonic Allies Against the Brandeis Salient of the Official Classification Labyrinth” is the unofficial title of the case made by the brewing interests the early part of this week against the proposed change of beer rating from fifth to fourth class, led by Luther M. Walter, with Warren Burkhart, Richard Muehlbuerg, William Pister, Louis Feickert, Charles Bertachy and “Cupid” Zielke as lieutenants. It was one of the best-natured fights imaginable. E.S. Ballard, in charge for the railroads, only occasionally put a frown on his face and “went after” a witness. It was a happy family, because all the men concerned have met around the table at classification meetings and fought out similar questions without the aid of the Commission. Mr. Ballard’s amiability was attributed, in large measure, to the mass of facts brought forward by the traffic managers of the breweries tending to show that the Brandeis suggestion that beer does not pay its share of the cost of the service performed by the railroads is a conclusion drawn from shipments that were not typical. They showed car-mile and ton-mile earnings of 8 cents and 5.4 mills on 112 cars, three of which were oysters. The fact, however, taken from more than 32,000 shipments, is that the car-mile earnings are 15.2 cents and the per ton per mile 9.4, both of which are way above the average. The severity of the attack upon the honesty of the so-called Brandeis list of “unremunerative” commodities thus far made (it is not yet complete) tends to strengthen the query as to how much the Brandeis service for the Commission was really worth. The result thus far shown is a large accumulation of suspicion, on the part of shippers, as to the fairness of exhibits prepared for the Commission under the direction of such a man as Brandeis.*

“If the charge of 35 cents is allowed to become effective, whisky in bottles sent in small quantities will probably bear the highest transportation rate to be found in the world.”

Whisky in the Next Room. — While the hearing with regard to the proper rating of beer was going on in the small ballroom of the New Willard, the query as to whether it was proper to make a minimum charge of 35 cents on a bottle of whisky, expressed into dry territory, was going on in a small room adjoining. But the brewers were not interested in the troubles of the mail order liquor houses. Nor were the latter losing a single wink of sleep on account of the proposal of the railroads to hoist the rating on beer in carloads from fifth to fourth class. It was possible to induce the brewers to listen to objections to rating skunks at one and a half times first class, but they did not care a continental about the minimum on the hard liquor. If the charge of 35 cents is allowed to become effective, whisky in bottles sent in small quantities will probably bear the highest transportation rate to be found in the world. There is nothing to compare with the rate on a single bottle of whisky. But the charge is not imposed with any idea that any great amount of revenue will come from it. The express people are not caring for the business, because it gets them into too much trouble with local authorities. Their lawyers believe that many of the state laws are unconstitutional, but they do not care to test the question, for the simple reason that if they should do so the “drys” would charge them with being in partnership with the “liquor interests.” They believe that charge would be made, in the event they fought, even if they could show that the revenue resulting from the “partnership” amounted to a small fraction of one per cent of the total.

— 30 —

* As special counsel to the Interstate Commerce Commission, Louis D. Brandeis argued against a general rate increase sought by U.S. railroads in 1914. The future U.S. Supreme Court justice advocated “scientific management” by railroads to better understand the cost of shipping various commodities.  “Railroads which make and sell a most varied transportation service do not know the cost of any of the services which they furnish,” he wrote. “Without knowledge of the cost of a particular service it is impossible for railroad officials to protect the company’s revenues against unremunerative rates.” [pp. 47-48 of “The Passenger Train in the Motor Age: California’s Rail and Bus Industries” by Gregory Lee Thompson, Ohio University Press, 1993.] Not knowing true shipping costs is still an problem today, if not for railroads, for many trucking companies.

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FREIGHT ANALYSIS FOR 1921

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The Traffic World Washington Bureau

Of the 39,913,296 cars of revenue freight loaded in 1921, 32.8 per cent was miscellaneous freight, 27.7 per cent was merchandise, LCL, 20.4 per cent was coal, 6.3 per cent was forest products, 5.8 per cent was grain and grain products, 3.8 per cent was live stock, 2.3 per cent was ore and 0.8 per cent was coke, according to an analysis, accompanied by charts, made by the car service division of the American Railway Association.

Of the 45,864,309 cars loaded in 1920, 36.6 per cent was miscellaneous freight, 19.9 per cent was merchandise, LCL, 22.4 per cent was coal, 6.8 per cent was forest products, 4.1 per cent was grain and grain products, 3.5 per cent was live stock, 5.3 per cent was ore and 1.4 per cent was coke.

Of the 41,684,052 cars loaded in 1919, 57.8 per cent was merchandise, LCL, and miscellaneous (no separation of merchandise, LCL, and miscellaneous loading having been made), 21.4 per cent was coal and coke (no separation of coal and coke having been made), 7.1 per cent was forest products, 4.7 per cent was ore, 4.9 per cent was grain and grain products and 4.1 per cent was live stock.

Discussing the analysis, the division said: “The outstanding feature of the performance of the last year is a relatively extraordinary increase in the loading of merchandise and LCL, and miscellaneous commodities combined, and the marked decline in the raw materials entering into manufacture — coal, coke, ore and forest products. Simultaneously, in 1921, there was a heavy increase in grain and grain products loading and a smaller increase in the loading of live stock, but in the latter case, this was not sufficient to bring the figure up to the percentage of all loading in 1919.”

— Jan. 28, 1922, Vol. XXIX, No. 4

Note that in 1921 less-than-carload merchandise and miscellaneous loadings represented 60.5% of rail freight while bulk commodities such as coal, grains and forest products accounted for 39.5%. That LCL freight increasingly would become “less-than-truckload” freight as the trucking industry and national highway network expanded.

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