What if they...?

[greyhounds]

 

OK, building on my concept to profitably serve the Los Angeles-Las Vegas market, I’ll say this.

What the railroads really, really, really need to do is establish a market development budget.  Operating people frequently push back hard against the development of new services.  There’s a reason for this, and it’s a logical reason that needs to be dealt with.  The costs of the development (new services) will largely come out of their budget, and they’ll get no increase in that budget when any new service is established.  Since they’re evaluated on staying within the budget that’s what they want to do.  It’s kind of a “Just Say No” thing. Got to fix this. I reckon a market development budget would go a long way for fixing this.

New services should initially be covered by the market development budge instead of the operating department’s budget.

I’ll use CSX as an example.  In the 12 months ending in March 2022 CSX had gross [1]revenues of 13.122 billion dollars.  I’ll use an operating ratio of 58.4%.  A low OR like that is a good thing, but it’s not the only thing.  You’ve got to keep multiple numbers in your head and weigh them as appropriate.  The weight given to each number will vary over time.  It’s a subjective judgement.  Net income and return on invested capital are among the other numbers needing consideration. “There is no certainty, only reason and experience to guide us.”

So, if CSX put 1% of that 13.122 billion revenue into a market development budget that would be $131,220,000 for market development.  That’s one Hell of a lot of money.  But you can’t win if you don’t try.  I

If CSX allocated that money for market development, and the new services produced absolutely no extra income, the OR would go up from 58.4 to 59.0.   That’s an unrealistic worst-case scenario. If your market development people regularly produce no extra income, you need to restock the team.

For the unions, they need to be more realistic.  I fully support good pay and benefits, fair treatment, etc.  But there are certainly some trains that can well be operated with one person crews.  That needs to be recognized and accepted.

 

 

                                                               

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[1] NO.  They didn’t make $13.122 billion.  They had to pay all expenses out of that.

[charlie hebdo]

In other words no risk, no rewards. You demonstrate that some corporations won't subtract a dime from bottom line for innovation, marketing, R&D etc. instead preferring to cut labor costs.

[SD60MAC9500]

 

Combine the departments. Make them operating/marketing performing dual roles. In order to keep their budget they have to find new traffic opportunities. They also have a time limit. Also tie their budget into traffic growth. Give a bonus when profit increases to X amount from growing business. No growth, no bonus, no increased budget..

Oh yeah can't forget this.. Make their salary performance based....No performance, no raise. Matter of fact your salary will get reduced..

 

 

 

 

 

[tree68]

SD60MAC9500

 

Combine the departments. Make them operating/marketing performing dual roles. In order to keep their budget they have to find new traffic opportunities. They also have a time limit. Also tie their budget into traffic growth. Give a bonus when profit increases to X amount from growing business. No growth, no bonus, no increased budget..

Oh yeah can't forget this.. Make their salary is performance based....No performance, no raise. Matter of fact your salary will get reduced..

You're cutting into my dividends, again...  {/sarcasm}

[SD60MAC9500]

 

tree68

 

 

SD60MAC9500

 

Combine the departments. Make them operating/marketing performing dual roles. In order to keep their budget they have to find new traffic opportunities. They also have a time limit. Also tie their budget into traffic growth. Give a bonus when profit increases to X amount from growing business. No growth, no bonus, no increased budget..

Oh yeah can't forget this.. Make their salary is performance based....No performance, no raise. Matter of fact your salary will get reduced..

 

 

You're cutting into my dividends, again...  {/sarcasm}

 

<<<<<<<<<CUT!!!!