Railways.


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Railways Railroad Industry Attributes Rate of profitability Expanded from 5.7% in 1984 to 9.4% in 1996. Represents 1% of Gross domestic product Utilizes more than 200,000 (0.19% of populace) Delivered around 40.6% of all ton-miles moved in U.S. (down from 75% in 1929) Ton-miles moved (1997) = 1,375 billion
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Railways

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Railroad Industry Characteristics Return on Investment Increased from 5.7% in 1984 to 9.4% in 1996. Represents 1% of GDP Employs more than 200,000 (0.19% of populace) Shipped around 40.6% of all ton-miles moved in U.S. (down from 75% in 1929) Ton-miles moved (1997) = 1,375 billion Total of 530 Line-Haul Railroads 9 Class I; remained Regionals, Locals, & Switching bearers

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General Service Characterisitics Commodities Hauled Coal Primary haulers of coal (43.8% of aggregate tonnage) Farm Products (1.4 million tons) Chemicals (1.04 million tons) Motor Vehicles & Equipment Non-metallic minerals

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Constraints Limited to altered privileges of-path Door-to-Door benefit just accessible if both shipper & recipient have rail sidings. On-time conveyance Frequency of administration High percent of merchandise harmed in travel (3% of aggregate tonnage sent)

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Strengths Can deal with substantial volume developments of low-esteem items over long separations Can pull a bigger assortment of items than pipelines Assume obligation for misfortune & harms Offer TOFC (trailer-on-flatcar) & COFC (holder on-flatcar) administration

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Equipment Used Carload Basic unit of estimation of cargo taking care of by railways Average conveying limit = 91.9 tons Some more current autos surpass 100 tons Railroads normally own & keep up their own particular moving stock

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Most Common Car Types Boxcar (plain) Standardized roofed cargo auto with sliding entryways Used for general products Boxcar (prepared) Specially altered car utilized for specific stock, (for example, vehicles parts) Hopper auto Freight auto with floor inclining to one or more pivoted entryways Used for releasing mass materials Covered container Hopper with rooftop intended to pull mass things that oblige assurance from components

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Most Common Car Types Flatcar Freight auto with no top or sides Primarily utilized for TOFC administration apparatus and building materials Refrigerator auto Freight auto that gives controlled temperatures Gondola Freight auto with no top, level base, & settled sides Used for pulling mass wares Tank auto Specialized auto utilized for transporting fluids & gasses

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Unit Train Specializes in transport of one and only ware (normally coal or grain) from root to destination Shipper ordinarily claims autos Train is fundamentally leased to the shipper for the development

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Cost Structure Fixed Costs Account for 30% of aggregate expense structure Railroads & pipelines just modes that possess & keep up their own system & terminals Typically work their own moving stock Rights-of-way Railroads own, work, & keep up Terminals Equipment $6.9 billion interest in 1996 Class I railways alone worked 19,269 trains & 1,240,573 cargo autos in 1996

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Cost Structure Semivariable Costs Account for 40% of aggregate expense structure Maintenance of privileges of-way, structures & hardware Roughly about $10 billion every year

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Cost Structure Variable Costs Account for 30% of aggregate expense structure Labor Average hourly gross compensation = $20.05 Average profit of $50,611 Labor spoke to by 14 unique unions Operating unions Non-working specialty unions Non-working modern unions Fuel $2.4 billion spent on fuel in 1996

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Key Benefit of Railroads High Economies of Scale Note sample in course book 200 million tons of cargo pulled at normal charge of $0.035 per ton. With altered expenses of $3.5 million Plus variable expenses of $2.5 million (expecting $0.0125 per ton pulled) And income of $7 million (200 million tons @ $0.035 per ton) Railroad acquires $1 million in benefit Railroad’s expenses are $0.03 per ton ($6 million aggregate expenses isolated by 200 million tons pulled)

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Key Benefit of Railroads Now accept a 20% expansion in movement at same rate charged (accept limit prerequisites parallel) 240 million tons of cargo pulled at normal charge of $0.035 per ton. With settled expenses of $3.5 million Plus variable expenses of $3 million (expecting $0.0125 per ton pulled) And income of $8.4 million (240 million tons @ $0.035 per ton) Railroad wins $1.9 million in benefit Railroad’s expenses are $0.027083 per ton ($6.5 million aggregate expenses partitioned by 240 million tons pulled)

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