CEO PERSPECTIVE: Stay Close to Your Customer

Written by Dan Smith, CEO, Watco
Dan Smith, CEO, Watco

Dan Smith, CEO, Watco

As part of a special series in Railway Age’s March 2022 issue, 11 North American railroad CEOs address what must be done to grow and gain market share from competing freight transportation modes. Dan Smith, CEO of Watco, is the 9th to share his perspective.

A wise man once told me: “If you want to improve the bottom line, go listen to your team in the field; if you want to grow your top line, go listen to your customer.” 

Never in the history of our industry has this statement been more relevant. We face a unique and unmatched competitiveness for talent, so it’s more important than ever we stay close to our team members. Our customers are facing unprecedented disruption to their supply chains, and they are looking for help in solving these problems.


Challenge creates opportunity, and if we do our jobs the right way over the next several months, the rail industry has a great opportunity to earn more market share by converting volume from competing modes of transportation. Watco, along with the entire short line industry, is uniquely positioned to help our Class I partners execute this modal shift. We can grow volumes on less dense corridors and hand larger blocks of carload traffic to their world-class, second-to-none, long-haul freight networks. We can offer customized service plans that benefit our customers and feed more carloads consistently to the best long-haul freight movers in the world: the North American Class I rail network. No one moves freight safer and more efficiently than the rail industry, and provided we meet the service needs of our customers, we can achieve record levels of top line growth. 

Success in our endeavor to capture more freight volume is not solely dependent upon our saying “yes” to our customer, but it is still the most important step. We also need to focus on a collaborative effort to minimize regulatory delays in our pursuit of “yes.” Many times, change of ownership and transfer of assets in our industry leads to positive change. A best owner philosophy around these assets incentivizes better service, creative capital investment, and a better product for our customers. We should do all we can to put the right players in the right positions to win the game. And right now, the game is about saying “yes” to our customers.

I am proud that at Watco, we have always worked very hard to capture every single carload we can. Along the way, we have tried to remember that when we create value for our customer, we could be rewarded with more opportunity. Over the past 39 years, these opportunities have not only created value we share with our customers and team members, but also allows us to acquire amazing assets, prompting conversations with new customers about to how do more business with them. 

For Watco, growing the top line has always been about two things. First and foremost, it has been about making sure we listen to our customers and work hard to solve their problems. Second, and not any less important, we need to make sure we take care of our team that serves those customers each day. We need to make sure we retain the great team we have already and do our best to find the next generation of men and women who make it happen every day.

I want to believe that we do both of those things very well at Watco, but the only way we will know for sure is if we stay close to our customers and stay engaged with our team in the field. And we need to do it more often now than ever. 

Read more of Railway Age’s special CEO Perspectives series:

Katie Farmer, BNSF: Sustain a Growth Mindset
Keith Creel, Canadian Pacific: Supply Chain, Market Reach and Sustainability
JJ Ruest, CN: Railroads Must Lean Into Their Natural Strengths
Jim Foote, CSX: Performance, Sustainability, Innovation Are Keys to Growing Market Share
Pat Ottensmeyer, Kansas City Southern: Competing on a Global Scale
Alan Shaw, Norfolk Southern: A Simple, Powerful Recipe for Growth
Lance Fritz, Union Pacific: Solving Customer Problems at the Heart of Innovation
Peter Gilbertson, Anacostia Rail Holdings: Growing With People
Ian Jefferies, Association of American Railroads: A Growing Rail Industry Needs Policy Sanity
 Chuck Baker, American Short Line and Regional Railroad Association: Four Parallel Paths to Growth

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