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Norfolk Southern steals page out
of CN’s playbook Will other railroads follow CN’s schedule
lead?
by Bill Stephens
If imitation is indeed the sincerest form of flattery, then E. Hunter
Harrison must be tickled pink.
The Canadian National executive vice president and chief operating
officer preached the gospel of scheduled railroading when he was at
Illinois Central, and has helped turn CN into what is arguably the
continent’s best-run railway by implementing the scheduled railway
concept there.
Now Norfolk Southern is undergoing a conversion, and early this fall
will begin implementing the first
phases of a scheduled railroad operating plan. As part of its
reorganization announced in January, NS began redesigning the way the
railroad operates, and in the process is stealing a page directly from
the CN
playbook.
CN trains stick to the plan
In September 1998, CN launched its scheduled railway service plan, which
is built around the trip plans for individual cars. CN developed an
electronic catalog that gives to-the-hour transit times for 3600
routings, all the way from the shipper’s dock to the receiver’s
dock. This enables CN to know exactly what it needs to do to get cars
moving to the right place at the right time.
The CN plan also relies on a handful of fundamental operating
principles. Among them:
- Minimize dwell time in yards by reducing the window between arrival
and departure times.
- Minimize car handling, which both reduces transit times and the
opportunity for service problems.
- Build general purpose trains – rather than concentrating on unit
trains – to maximize the
capacity on each train, and increase volumes to the point where more
trains can run from one origin to one
destination without intermediate handling.
- Try to balance train movements in both directions in an effort to
reduce deadheading of crews and
locomotives.
- Reduce motive power where possible by balancing train speed and
horsepower requirements.
- Stick to the plan by running trains according to schedule, every day,
regardless of how much traffic is
on a train on any given day. This keeps the railroad in sync, boosts
efficiency, and improves reliability
and predictability. (There are, of course, triggers in the plan that
change operations based on longer-term
traffic declines or increases.)
CN’s results are impressive. Its carload freight business has an
industry-leading 90 percent on-time record. (Burlington Northern Santa
Fe, which also adheres to schedules on some trains, is in that ballpark,
but no one else comes even close.) CN’s operating ratio is an
industry-leading 69.6 percent. And as a byproduct of efficient
operation and improved transit times and car utilization, CN has been
able to reduce its locomotive fleet by more than 650 units, and has sold
or idled 12,700 cars.
With an uncharacteristically high operating ratio of 89.7, NS has looked
north, and likes what it sees. It
has hired the same consultant CN used, MultiModal Applied Systems, to
help it, too, develop a scheduled
railroad operating plan.
How NS could benefit
The pending operational shift will be a sea change at Norfolk Southern.
Currently, the railroad operates a
number of dedicated trains for automakers that are very short – in the
15- to 30-car range – and annuls
other trains when traffic levels don’t warrant running on a particular
day. None of this is efficient.
Sure, the automakers are happy. They get the parts delivered to their
assembly lines on time. But the
train has plenty of extra capacity that goes to waste. And, sure,
the bottom line may benefit on days when a train is annulled because
traffic didn’t reach a certain level. But that translates into at
least a day’s delay to the traffic that was ready to roll. It also
adds two service ingredients – unpredictability and inconsistency –
that shippers don’t like.
Although NS was able to keep its on-time performance high in the early
1990s, traffic growth began to
saturate portions of the system, which in turn gummed up operations and
caused service to suffer. The
botched implementation of the June 1999 Conrail breakup plunged the
railroad into crisis mode for about a year. Only over the past several
months has NS service returned to pre-merger levels – which still
isn’t reliable enough if NS is to further increase its business.
Focus on what you do best — then do it
Norfolk Southern’s goals for scheduled railroading are relatively
simple: Provide reliable, on-time service
while reducing costs and making the railroad operate more efficiently.
Getting there is not as simple. It’s a complex process to build a new
operating plan from scratch for a 21,800-mile system. Right now, NS and
MultiModal are using computer models to simulate train operations.
“The service that MultiModal provides allows us to test various
scenarios for our operations,” says Mark
Manion, vice president transportation services and mechanical at NS.
“We can try ‘what ifs’ and see the
effect on the entire network using MultiModal’s software. That gives
us a tremendous advantage in our
ability to develop a successful plan. Our goal is to develop a plan that
simplifies our operations, implement the plan, and run our railroad
according to it.”
Part of the process – which involves the operating, marketing,
transportation planning, and strategic planning departments – is
figuring out exactly what NS can do best, and then focusing on doing it.
“We have to define our network routes, create consistent service with
high reliability, develop a catalog of services available, and sell
those services along those routes,” said Dan Mazur, assistant vice
president of strategic planning at NS. “We can’t be all things to
all people.”
And that probably means goodbye to the special movements for automakers,
for example. While that may
not sit well initially, the scheduled railroad concept should ultimately
improve service for the vast majority of NS customers – automakers
included.
While scheduled railroading will be a new way of doing things at NS, it
won’t be unprecedented on part of its system. That’s because in some
ways, NS will be going back to the way the Southern Railway operated
under the legendary discipline of D.W. Brosnan, who reigned as the
railroad’s operating vice president in the late 1950s and early 1960s,
and as its president from 1962-1967. He ran a tight ship, introduced
faster, more reliable service, and demanded that the railroad follow its
schedules to the letter.
Railroading has changed dramatically since Brosnan’s day, and NS is
looking forward, not backward, by
shamelessly copying CN. When NS has fully phased in its new operating
plan, it expects to provide service in the same league as CN and BNSF.
Now the question will be whether the other railroads will follow suit.
CN’s chief rival, Canadian Pacific,
last month hinted it may do so.
Wouldn’t that make Hunter Harrison’s day?
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