You might be asking yourself why I say the Class 1’s could learn a thing or two from McDonald’s? When they could learn from the competition, or fellow C1’s? Yet what can make them more competitive?. So… Why not learn a thing or two from an outside industry juggernaut such as McDonald’s? MCD is a retail powerhouse, and if you own stock it proves this point. Many of us have dined at and, or probably worked there in our youth or otherwise. MCD prides itself on a consistent reliable product. Every store whether corporate, or franchise maintains a checklist of restaurant process and QC standards.
During my short tenure at MCD many moons ago I worked the grill. Which during my time was, or is a semi-automated process. One thing that I found interesting during my tenure there was just how well of an oiled machine MCD is. The key to why they are so successful is the day in day out process of giving customers an experience that fosters repeat business. Keeping a menu that is easy to read with familiarity. Quick (They’re currently rolling out a 60 second DT time for breakfast hours) dining room, and drive-thru service. Sit down service is avaible as well with electronic table markers that allow an employee to bring your food to your table. An easy to use app for placing orders to be picked up via drive-thru, or curbside. The app also features the McCafe rewards program that rewards repeat customers with free items after every fifth purchase.
So where do the C1’s fit into this?.. I’ll explain. A consistent reliable transportation product starts with an easy detailed to read “menu” of your product. How many services are available to prospective customers and how do they fit into the customers overall supply chain? How easy is it to acquire a service? Do these services actually produce what they advertise? When I pull up to the drive thru, and order a #3. I know exactly
I think the problem is thinking the class ones don’t know how to manage their business. They know exactly how to manage them.
The way the majority owners of shares want.
If the majority want as large as possible, fast, short term returns that’s the way the company is going to be managed. If it means running your company into the ground to do it, mortgaging tomorrow for today, so be it. To heck with tomorrow.
About 15 years ago, McD’s rolled out that sixty second thing for everything. And just as quickly dropped it.
The way railroads are being run today would mean that you would have to go to a major central location to get your burger. Local outlets would be a thing of the past, as they all have to be individually staffed and supplied. Following the railroad example, the semi full of patties and fries would only have to make one stop in a given area, instead of hitting several stores.
Convenient for you? Nope. Convenient for them? Absolutely!
First, a comment regarding the demurrage incentive. Unless something has changed in the 17 months since I pulled the pin, just about all Class 1 demurrage plans provide a credit for cars released early which can be used to offset debits for cars held beyond free time.
Now, to your overall point that the railroads should work to improve the customer experience. Having spent over 40 years as a rail customer, you would have to try very hard to dissuade me from my belief that the railroads simply don’t care about the customer’s experience. If you’re a captive shipper, they operate with the belief you have no viable alternative to rail service and need them more than they need you. In fact, most Class 1 folks I dealt with over the years seem to operate from the perspective that your business is tantamount to their birthright - it’s THEIR traffic, not yours.
Now, the exception to this “rule” is the short line railroad industry. They WANT your business and put forth an effort to make working with them as easy as possible.
I can very much appreciate your thought process with your suggestion but, until the thinking at Class 1 railroads makes a 180 degree course change, improving customer experience is probably the farthest thing from their minds.
The short term profit goals of the Wall Street money people or pump and dump crews has always reminded me of this tale of The Hot Dog Stand which I was able to find on google at:
Living in the Chicago area (I moved into Addison in 1963) and shortly found a new hot dog stand nearby. It was new and I have watched it grow into a major eatery. And their stores could teach McD’s something about how to provide fast service. They have not grown as fast as McD’s but they were sold a few years ago. It was PORTILLO’s and their story starts out:
“The first Portillo’s hot dog stand known as “The Dog House” opens in 1963 on North Avenue in Villa Park. Owner and founder Dick Portillo invests $1,100 into a 6’ x 12’ trailer without a bathroom or running water. To get the water he needs, he runs 250 feet of garden hose from a nearby building into the trailer.”
At lunch hour, at the one near me, they have two lines with order takers that take the order, call it in to the kitchen, swipe your card or take your cash, stick a number on your car, and depending on the complexity of your order, another staffer hands you your order and pulls the number off of your auto or directs you to a parking spot to wait for it. This during the pandemic.
This discussion all revolves around the question ‘What is the Economy?’ Is the economy the monetary manipulations of Wall Street or is it the creation and selling of products, goods and services on Main Street?
The railroads will model themselves after the McD’s ice cream machine.
But seriously -
Part of the problem are these new “plans” is that they are very inflexible. One of the greatest changes I’ve seen in my career has been the loss of the ability of terminals to make their own, local, decisions. I don’t know if that makes us more or less like the golden arches?
It seems to me that McDonalds might be copying off the railroads in some respects, where imperatives to reduce the workforce have impacted quality, yet no one seems to care.
According to Wendy’s, McDonalds Burgers are round because they cut corners…
I find it rare to be served a burger in either place that is more than 10 degrees above room temperature.
Although McDonalds does have some company owned locations, generally people are buying the food from a McDonalds franchisee, not directly from the large corporation. The franchisee is a much smaller business that can more easily focus on individual customer service. McDonalds does set standards for their franchisees, but the actual operation is left to the smaller business. The franchisee is a “Middleman” who provides added value by more readily being able to focus on individual customer service than the large, distant corporation could.
The “large, distant” corporation adds value by creating efficient food distribution (done through other middlemen), national advertising, standards, etc. McDonalds corporation makes its money by owning the land the franchises are located on and leasing it to the franchise store operators.
Ford Motor Company operates in a similar manner. We don’t buy cars and trucks from Ford, we buy them from a Ford dealer. The dealer is a smaller business and is better able to focus on individual customer sales than the vehicle manufacturer could ever do.
There’s a name for this. It’s called “Descrepancy of Size”. And it’s a very valid reason for a middleman to be in a distribution or service channel. In these cases the middleman doesn’t add costs to the channel, he takes costs out by making the channel more efficient.
The class 1’s have a challenge providing good retail service to smaller customers and “Discrepancy of Size” is a big reason why. Short lines have gained a reputation for providing improved service to smaller rail customers. They’re functiioning in a way similar to the McDonalds franchiees and Ford dealers function. Adding them to the rail service channel reducess cost and improves service to the customer.
I’d like to try having the class 1’s franchise out their local s
"…Although McDonalds does have some company owned locations, generally people are buying the food from a McDonalds franchisee, not directly from the large corporation. The franchisee is a much smaller business that can more easily focus on individual customer service. McDonalds does set standards for their franchisees, but the actual operation is left to the smaller business. The franchisee is a “Middleman” who provides added value by more readily being able to focus on individual customer service than the large, distant corporation could.
The “large, distant” corporation adds value by creating efficient food distribution (done through other middlemen), national advertising, standards, etc…"
McDonald’s [Restaurants(?)] is primarily a ‘franchised’ operation. Locations are ‘owned’ by individuals, or their corporate entities; those entities contract with McD’s Coprorate; It controls virtually every phase of the operations of McD’s franchised locations; the parameters of Corporate controls cover all phases.
Hiring policies, uniforms, all logo’d consumable supplies, and food sources. Managers are trained to ‘specifics’ regarding their jobs, and sanitation of locations. McD Corporate controls each step of the supply chain, and quality controls within that chain. Martin-Brower Co. is a major source for food and consumables for many franchisees.
In some ways McD Corporate could be similar to a railroad in the way it maintains the ‘qualities of its operatons’. In some ways, the interactions of Short Line RR’s and their exchanges and interchanges with the C-1’s ; could be handled as greyhonds suggested.
"…This would move the operations and marketing of such service to organizati
McDonalds is tight as it can be with the standards it sets. You may not like what’s on the menu, but I’ve never heard of anyone getting sick from eating at McDonalds. When you consider the millions of meals they serve each day this is an amazingly great record for food safety.
My now EX wife worked for 10 years in McDonalds distribution. She was at corporate HQ which was then in Oak Brook, IL. Here are some stories:
When a receiver rejects a load the railroad can be liable if it acted improperly. The railroad then buys the load and reimburses the proper party for the value of the load. So, the N&W (or NS, I don’t remember) delivers a carload of frozen fries in Cleveland that’s no longer frozen. The railroad failed to protect the temperature as required. The load was rejected (properly) and a damage claim was filed against the railroad. The claim was paid and the railroad now owned the thawed french fries. Then the railroad freight claims guy (they tend to suck big time) sells the fries. I don’t want to know what they were used for.
Anyway, this was against McDonalds standards. Their name and logo were on those boxes of potatoes and if those potatoes weren’t fit to be sold at McDonalds those potatoes were to go in a garbage dump. Nowhere else. But the railroad’s freight claims guy (did I mention they suck big time?) insisted on selling the thawed fries. The N&W/NS didn’t see another load. The EX shifted the fries to TOFC with trucking east of Chicago. And she didn’t change it back.
We were on a vacation in Maui. If I remember correctly, at the time McDonalds had all of three restaurants on Maui. She insisted on taking time to go inspect the “Maui Distribution Facility”. Note: it also served KFC and others.
On one dark and dreary winter Saturday we drove out to a McDonalds distribution center in Lemont, IL.&
Sounds like the Class 1s not only don’t say, “You want fries with that?” They are also saying, “We are pretty sure you are not worthy of eating one of our burgers.”
In some ways, it sounds like the railroads are already operating like McD’s.
Local franchisees take care of the local business, while corporate (albeit with contractors) takes care of moving large quantities of product between the source (warehouses) and the franchisees.
Back in the day when there were hundreds of Class 1’s would be more like the franchisees getting their own supplies.
The Class 1 “railroad way” is kind of the antithesis of the old Burger King “have it your way” slogan. The Class 1 version of this would be “have it our way”.
My one McDonalds Quality Control story was from when they introduced the Quarter Pounder. I went to a McD about a mile from their Oakbrook HQ and ordered one. Got it, sat down and bit in. Blood was red as it ran out. Took it back to the counter and told the young man, “THIS IS RAW”. He replied. “It can’t be, Its done by computer!” I asked for a higher authority who also gave me the same run around. Asked for the Manager. When he came out, he looked at it, told me they would bring me another, picked up about six waiting for sale from the bin and dumped them in the waste and went back into the grill area. About three minutes later, a properly cooked QP was delivered to me. The computer must not be linked to the grills temperature.
And if you asked an old-time diner grill guy where his computer was he’d have pointed to his forehead and said “Right here!”
Nothing against Mickey-D’s by any means, I like Mickey-D’s, but thank goodness there’s still some old-time burger joints around. One’s Triple A, the others are the Big Leagues.
No, it’s more like they’re saying, “Today we have a plain hamburger, no cheese, no pickle or onion, no ketchup but with mustard and you have to buy 110 of them. Tomorrow we’ll have crispy chicken, with all condiments but you’ll have to buy 150 of them.”
And when you drive up, they welcome you with, “Welcome to the PSR RR. How may you help us?”