Tuesday, May 22, 2012

Solving single-car shipment woes

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Last month I wrote about how paper and other single-carload commodities were down year-over-year, and the impact that trend is having on Class II and III railroads in particular. One reason these downturns hit the smaller roads the hardest is because they do not have unit train volumes to offset short-term losses in single-car shipments. Another is the unevenness of service quality and consistency that too often occurs in single-car shipment lanes. Happily, such does not have to be the case.

Michael Partridge, Verso Paper's Supply Director, provides a case in point. Rail dominates Verso's finished paper outbounds from its Maine mills, even for markets as close as New York, Pennsylvania, and New Jersey. Consistency is key: in selecting outbound modes Partridge gives consistency a 60-percent weight with speed and damage-free 20% each.

A year ago, Verso's rail service consistency was not good: his chart of the number of weekly cars that varied from target performance shows wide swings from February, 2010 to April, 2011. In other words, consistency was lacking and volumes were taking a hit. Then, in May, 2011 weekly transit time variations flat-lined. Consistency reigned once again and carloads increased.

What happened was that in early 2011, Verso and their railroad counterparts took a collaborative approach to eliminating the variables. The biggest challenge was matching paper production and delivery requirements to rail transit times. Two big questions: Could the railroad run the same trains at the same time every day? Could Verso fill the same number of cars going the same way every day?

The answer to both questions was a resounding YES and, after working out the details, Verso's outbounds rarely vary from standard. As a result, says Partridge, 95% of outbound cars are arriving at interchange according to plan. Shows what one can to to make a good customer an even better customer.

Roy Blanchard

Roy Blanchard is principal of The Blanchard Company and a Contributing Editor to Railway Age.