Actually, it doesn't necessarily apply here. The facts of boiler horsepower are true enough, but the gearing and third cylinder mess up the calculations. At low speeds the smoother power pulses of a geared locomotive will out perform an equivalent direct connected locomotive, in both pulling power and fuel consumption. The greater horsepower and tractive effort of a K-36 would not be an advantage of it is not being used to the limits of it's ability. The larger question here is track speed. At speeds less than 20 mph a well maintained Shay should be able to keep up with a rod engine. On the Sumpter Valley all trains are limited to 15 mph, and our 40 ton Heisler has no trouble keeping up with the 100 ton Mikado. The only trouble it has maintaining the schedule is the necessity of wooding up every trip. Some of our firemen have occasional problems keeping it hot, but that is due to inexperience and/or the quality of the wood.
I do not intend to speculate on whether a shay can keep up with a K-36 on the run in question, because I am not personally familiar with the locomotives or the track involved. But I grew up in logging country and I know this much: A given locomotive will either do the job or it won't, and the numbers don't really mean all that much.