We have posted Fred W. Frailey’s August 2009 feature story on CSX CEO E. Hunter Harrison online for better historic context of this year’s railroad newsmaker:
Good article… I’m always surprise to see that CN’s automotive related freight is only 6% of the total. all one sees around here is autoracks…
Creel almost seems to be admitting that Harrison’s approach was/is too harsh. A genuine attempt at reconcilliation or is he just perfuming the pig for PR reasons?
And something else unrelated to EHH to take away from traffic makeup chart in Frailey’s article is that traditional unit train bulk freight (grain, minerals and coal) made up just over 1/3 of CN’s traffic base, notably coal stood at only 6% of total traffic.
Sidebar. — Here on CSX’s A&WP subdivision the past week all of the general freights have been up graded to at least 3 locos from the normal 2. All three are observed to be under power and not dead in tow. Wife seems to think they are running faster ?
Unless they were so underpowered that they couldn’t maintain track speed, I’d imagine they’re running at the same speed. Then, again, I don’t know the profile there. Maybe they were underpowered…
Absolute tripe!
Thanks for putting this article up.
I think the most telling quote is “We were going in Hunter’s direction, actually,” says Jim Foote, CN’s executive vice president, sales and marketing. “But Hunter wanted us to move twice as fast.”
Every RR now has a implemented a version of scheduled railroading. It’s why the room for improvement at CSX is much smaller than it was at IC, CN and CP.
Every RR schedules cars and trains and makes sure the plan balances power and crews. Every RR makes sure the plan does not cause congestion at terminals or on the mainline. No RR is dispatching merchandise trains by tonnage anymore.
The comments about SmartYard were interesting. About it giving you an optimized hump order for making connections. A good idea! However, if you have a hump yard that chronically has 3 trains in the receiving yard waiting to be humped, you have a sizable number of cars that won’t make their scheduled outbound connection. You simple cannot get a car through hump yard in 10 hours if you are spending 3 hours in the receiving yard. The key to making connections is keeping the receiving yard current and knowing when to pull the class tracks to build the outbound train.
Which could be a problem. Trying to achieve the same level of results as he has before when many of those results have already been achieved before his arrival might mean some pretty drastic actions, never mind detrimental effects on the railroad and its personnel.
Another quote "But the biggest difference between CN and the rest of the pack is a simple idea: balance. Perfect asset utilization requires perfect balance — not just in train movements by direction, but also by day of the week. “We build our railroad around it,” Creel remarks. “That’s unique to us.” Imagine the possibilities. Your physical assets are always working. You always have just enough crews, just enough locomotives. Adds Creel: “It’s a huge challenge, the balancing act. You’re always on the edge of your seat.”
This can be a problem. If you tune everything up and run right at capacity, that’s great…until something happens. A highway running right at capacity of 1900-2000 vehicles per hour per lane flows just fine and is maximizing asset utilizaton. Then a squirrel runs across the road. Someone steps on the brakes. A ja
Airlines can, and do, have problems when a significant weather event ties up an airport, even a small one. Airplanes aren’t where they are supposed to be, so can’t cover the schedule.
As you note, there is a natural reset period built into their system, but a prolonged disruption can have nationwide implications.
I don’t doubt that EHH can still wring some improvements out of CSX. But if his backers expect the same level of return as he got out of his earlier efforts - and he tries to achieve them no matter what it takes - things will get ugly.
Completly agree.
Ugly is exactly what Hunter brings to the the table. He has, can, and will dish out ugly to a degree that the other railroad CEO’s just can’t stomach, even his protégée Keith Creel. That is his “X Factor”. It is also why he is such a polarizing figure.
During his time at CP, Harrison turfed a lot of good people. He did it to cut costs and also through a “rules” policy that was inflexible. In the end, customer service went out the window and CP lost a lot of business that they may never get back. He created more problems than he solved. That will be his CP legacy.
He trashes business that doesn’t fit his 7 day of week, even flow model.
The way I understand PCS to work the EEH way is that you flatten out the flow so that it’s steady by day of week and hour of day as much as you can on the service design side. Then you hammer the customers to flatten any remaining peaks and valleys. Then you blow away whatever peaks remain.
Then you trim the plant, locomotive fleet, car fleet and crew base to just fit.
Super efficient. No margin for error. No specialized service.
I wonder if he has any idea how “lumpy” intermodal traffic is in the NJ- Chicago lane. Lets see what he comes up with to solve this one…
“PCR” = “PreCision Railroading” ?
Not all business is worth keeping. I don’t know if the customers who left CP were encouraged to leave or if they left inspite of CP’s best efforts to keep them. Probably some of both. Saying goodbye to a customer isn’t necessarily a bad thing… it frees the organization up to focus more on the A level customers that everyone wants… send the C and D level accounts into your competitor like a virus. If you’ve got nothing but good A and maybe B level accounts while your competitors are choking on the level C and Ds… who has the edge?
Spoken as if CSX has never encouraged customers to seek other forms of transport for their products. With the passage of Staggers, many customers were ‘encouraged’ to seek other alternatives. The terminal where I spent a large part of my career once listed well over 1600 different customers - today that number is well under 200.
A industrial area that once had yard jobs around the clock, 5 days a week and handled upwars of 100 cars inbound and outbound daily now gets service from another yard twice a week of 2 or 3 cars per trip.
Run off the customers CSX has today and you are not running down costs, you are running away bottom line revenue.
That’s I’m saying: they’ve already cut out the chaff in order that they can focus on serving their better accounts.
That also happened in a very similar way to at least one major department store in Canada. They kept eliminating more and more departments with lower sales/sq.foot. The end result was fewer customers found it worthwhile to visit and the remaining “higher sales” were not enough to keep the empire in the black. An iconic national chain disappeared into bankruptcy after around 100 years.
Providing good rail service is a skill set that is equally applicable to the small customer as the big one. Accepting sloppiness with one will probably spill over into the general mindset. The cost of maintaining main track is huge and essentially fixed, so any additional traffic will lower the cost per carload, whether it be in a unit train or a mixed manifest made up of the small guys. That lower cost means more profit for the railroad.
John
PCR, PSR, PTC, EIEIO!