CWR from Japan for UP

[Blazeman]

http://www.uprr.com/newsinfo/community_ties/2015/march/longrail.shtml

OK modern modelers. Here's your next challenge. Cars not old enough yet to weather. Specially designed vessel with cargo hold just for the rail.

[nkalanaga]

"It’s outfitted with three cranes synchronized to simultaneously unload five rails weighing 10 tons. "

I'm not sure whether they mean "5 rails weighing 10 tons total" or "ten tons each", but neither can be right.  Ten tons is 20,000 pounds, and for a 480 foot rail, that is 41.7 pounds per foot.  Even the narrow gauge roads usually used heavier rail than that!

[Ed Kapuscinski]

Not a fan. They really couldn't find a domestic supplier?

[Missaberoad]

Canadian Pacific has been using Japanese rail for years, since 2005 at Least...
I think tgey get it in smaller lengths and weld them together at their own plant...

[peteski]

Seems like U.S. is not longer a leader in many fields (including now hardened steel manufacturing)?  Didn't we have lots of top steel manufacturers in Pennsylvania?  Most of those steel mills are now closed up. 

[GaryHinshaw]

Given UP's penchant for flying the flag, I'm sure they sought a US supplier.  I can only guess that Japan came in significantly cheaper, even after shipping.  The strong dollar probably also contributed. 

Given the number of times I hear about broken rails on the UP radio channels, rail integrity is a big challenge for them, especially in the desert.  This is an interesting new approach.

[Missaberoad]

Who is still making rail in North America? I remember seeing Illinois markings with recent dates...

Is Algoma Steel still making rail? Any eastern mills?

[Bob Bufkin]

CSX but in some new rail made in Italy a few years ago.  Not long before the steel plant there closed for good.

[Ed Kapuscinski]

Steelton is still rolling rail: http://usa.arcelormittal.com/Our-operations/Long/Steelton/

One of three, apparently.

[Hyperion]

Not a fan. They really couldn't find a domestic supplier?

It's not a question of there not being one.  It's a question of an ever-reducing quantity of domestic suppliers that inhibits competition and drives up prices.

The rail market naturally has few domestic competitors -- there's just not a ton of customers to sell to, so it naturally limits the supplier-base of industry-centric goods.  And mergers and acquisitions in the marketplace (especially in the downturn of 2008-2010) don't exactly draw the kind of anti-competitive attention as AT&T/Time Warner or something, and in some sectors of the business it got (in my opinion) extremely anti-competitive.

While at BNSF (still am, just different capacity now) it was a common for me to shop around at least a portion of my demand to foreign suppliers.  We got burned really bad when a series of business moves over the past decade really limited the domestic capacity of castings and forgings that make up the majority of the Rail and Freight Car component market.  In the sectors where we hadn't sufficiently engaged foreign suppliers, we were stuck for years without alternate sources of supply which led to price increases at the very least, but in most cases led to major service impacts due to unavailability of components, or quality issues where we were forced to quickly take whatever was available on the market (usually from China and/or Eastern Europe).  There were a number of incidents in the economic downturn where we faced supply issues on critical components for which we had no alternate supplier available to us.

As an example, since I had maintained a long-standing relationship with Sumitomo (same supplier as mentioned in this article actually) on a fairly small (<10%) portion of a commodity that I dealt with, we were able to weather market changes in castings that they supply very easily, by ebbing and flowing business to them as our primary domestic suppliers made the capacity and pricing moves that they have chose to make over the past several years.    Without going into too many details, I'll just say that when there were casting supply issues in the US, which made Trinity Industries go and buy the largest casting supplier McConway & Torley in order to secure production for their new-car builds, throwing a massive wrench into an already-shaky casting supply chain, things didn't go so smoothly.  And, yes, that meant we had to go source foreign parts.  It's not what we wanted, but it's what we had to do.

I will say that, in my opinion, a lot of the consolidation and general weakness of the domestic supplier base was our own work.  After the industry consolidation of the late-90s, and the subsequent "living-and-dying-by-Wall-Street-quarterly-analytics", the industry started taking a Wal-Mart approach to suppliers.  Just beat them down on pricing and give all the business to whoever gives you the best pricing.  It just naturally drives down competition when it's an 'all or nothing' game.   In the great capitalist 'Race to the Bottom', we ran most everyone out of the business, and then hit that bottom really hard when the supplier base was too weak to survive any sort of hiccups like we saw in 2008-2010.  Only since then has the industry learned the benefit of a diverse supplier base.

[C855B]

...a lot of the consolidation and general weakness of the domestic supplier base was our own work.  After the industry consolidation of the late-90s, and the subsequent "living-and-dying-by-Wall-Street-quarterly-analytics", the industry started taking a Wal-Mart approach to suppliers.  Just beat them down on pricing and give all the business to whoever gives you the best pricing.  It just naturally drives down competition when it's an 'all or nothing' game. ...

Classic oligopsony.

[jagged ben]

"It’s outfitted with three cranes synchronized to simultaneously unload five rails weighing 10 tons. "

I'm not sure whether they mean "5 rails weighing 10 tons total" or "ten tons each", but neither can be right.  Ten tons is 20,000 pounds, and for a 480 foot rail, that is 41.7 pounds per foot.  Even the narrow gauge roads usually used heavier rail than that!

Rail weights are specified per yard, so that's probably right for one rail.  They meant "each."

[nkalanaga]

jagged ben:  DUH!!!  I knew that, and have known that for 50 years, but forgot to do the conversion!  Thank you.  That would be "125 pound" rail, which isn't at all unusual.