Friday, September 28, 2012

Railroad customers can do more to help themselves

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The Pacific Northwest Association of Rail Shippers fall meeting in Eugene, Ore. was instructive, to say the least. I thought the session theme—“What do you want your railroad to look like in five years?”—was particularly fitting, given the slow volume improvement from the 2006-7 peaks and the better operating metrics over the same time.

My main takeaway, on the other hand, was not encouraging. Namely, that even though linehaul service out on the core routes is running very well, first-mile, last-mile is not.

As to the core railroad, BNSF Executive Vice President and Chief Commercial Officer Jon Lanigan said in his keynote talk at the opening session that it has been a “tortuous recovery” with coal and agricultural products down thanks in part to cheap natural gas and a 50-year drought. However, there are signs of life in lumber due mainly to multiple-unit housing and in crude oil out of North Dakota, where the outbound rail potential exists for loading one million barrels a day (1,400 carloads, more or less). International intermodal is flat to down though domestic is up double-digits on strong highway-to-rail conversions. Best of all, he said, BNSF has hit its target of 200,000 revenue units handled in one week—to which I must add there must be a fair degree of customer satisfaction with the BNSF service delivery system.

The railroad system as a whole is running better, too. The PNWARS shipper panelists said core service was greatly improved. A petroleum specialty products shipper, for example, said he was able to reduce his lease fleet 25% while handling increased volumes. But even as line-haul operations improve, local service still needs work. The shipper representatives on two separate panels cited consistency and communication as two areas needing improvement: Be here the same time every day and if you can’t let us know. Let the customer service rep look at the same data I’m looking at on the railroad customer service website and let the sales reps learn more about how my business works and be my advocate at the railroad.

That said, it appears railroad customers can do more to help themselves. The two rail speakers on my panel—Kyle Hancock, Vice President Agricultural and Industrial Products at CSX, and Otis Cliatt, newly installed President of Anacostia’s Pacific Harbor Lines—said customers can facilitate better railroad interaction by being prepared. They cited a number of critical things customers can do to help, from opening rail access doors and gates ahead of time to having cars cleaned, buttoned up, and ready to go at train time. A recurring theme across several panels was the need to drill down to root causes of failure—on both sides.

The PNWARS program was happily short of self-serving PowerPoint presentations and long on information you can use to get the railroad where you want it to be in five years. That is, providing a consistent and reliable service with no surprises and at a reasonable price. Frankly, we should have been there five years ago. What we need more of is blocking for the distant node, coordinating local switch times with core train schedules, and web-based everything so you can do business with the railroad the same way you do business with Southwest Airlines. Then we’d be getting somewhere.

William Vantuono

With Railway Age since 1992, Bill Vantuono has broadened and deepened the magazine's coverage of the technological revolution that is so swiftly changing the industry. He has also strengthened Railway Age's leadership position in industry affairs with the conferences he conducts on operating passenger trains on freight railroads and communications-based train control.