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Hunter...so far

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Posted by BaltACD on Wednesday, March 6, 2013 5:29 PM

Malicious Compliance

zardoz

cptrainman

Anyway, on to something new. It appears the tool given to trainmasters to get them out from behind their desks and to  intimidate crews, is to increase to the number of proficiency tests they must perform. I don't know the exact numbers but I was told from one trainmaster that the new quota is doubled. Also, they must find failure. They even have a quota on the number of failures they must find. So now we have trainmasters constantly performing proficiently tests. They continue to watch a crew until they find a failure even if it takes hours of their day. 

So that means now you must do everything absolutely "by the book". Everything.

Make sure you really know the rules, and then use them to your advantage.

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Posted by zardoz on Wednesday, March 6, 2013 8:24 AM

cptrainman

Anyway, on to something new. It appears the tool given to trainmasters to get them out from behind their desks and to  intimidate crews, is to increase to the number of proficiency tests they must perform. I don't know the exact numbers but I was told from one trainmaster that the new quota is doubled. Also, they must find failure. They even have a quota on the number of failures they must find. So now we have trainmasters constantly performing proficiently tests. They continue to watch a crew until they find a failure even if it takes hours of their day. 

So that means now you must do everything absolutely "by the book". Everything.

Make sure you really know the rules, and then use them to your advantage.

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Posted by Ulrich on Tuesday, March 5, 2013 4:08 PM

Apparently that's settled now, as of a couple of weeks ago.

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Posted by narig01 on Tuesday, March 5, 2013 3:49 PM

This may be old news.  

I read that CN filed suit over a non competitive clause in EHH's contract.  Was that settled or was this something new?

Thx IGN

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Posted by oltmannd on Tuesday, March 5, 2013 2:06 PM

cptrainman

CNSF
Fred thinks Hunter doesn't like premium intermodal service; in fact, Hunter's one big success was speeding up the network, starting with the intermodal trains. Before Hunter, CN's Toronto-Vancouver intermodal service offered fifth morning availability. Hunter took a full day out of that schedule (perhaps at the Canadian's expense?) as part of an overall "nned for speed" push.

Interesting. This is one of the first things EHH did at CP. He took a full day out of the intermodal schedule between Vancouver and Chicago. We now boast that we have service 8 hours faster than CN.

I think what he is getting at is there isn't much (if any) UPS, Fedex, LTL stuff moving on CN or CP.  This it typically called "Premium" Intermodal..

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Posted by cptrainman on Tuesday, March 5, 2013 11:28 AM

CNSF
Fred thinks Hunter doesn't like premium intermodal service; in fact, Hunter's one big success was speeding up the network, starting with the intermodal trains. Before Hunter, CN's Toronto-Vancouver intermodal service offered fifth morning availability. Hunter took a full day out of that schedule (perhaps at the Canadian's expense?) as part of an overall "nned for speed" push.

Interesting. This is one of the first things EHH did at CP. He took a full day out of the intermodal schedule between Vancouver and Chicago. We now boast that we have service 8 hours faster than CN.

CNSF
During my years at Santa Fe, there were certain customers and blocks of traffic that we always allowed our more desperate competitors at SP to 'win', knowing that they would actually clog up their system and keep them from improving their service enough to attract our more profitable customers.

Interesting again. I was sure that CN demanded a change in the interchange rules in my area just to clog us in a area where we expect the most growth. I have always been shocked that our management gave in to CNs demands. We have been clogged and screwed since day one of the implementation of the new rules. However, I always wondered if CN was that smart to look ahead that far. Seeing your post confirms that yes, they are that smart and yes we are that dumb.

Anyway, on to something new. It appears the tool given to trainmasters to get them out from behind their desks and to  intimidate crews, is to increase to the number of proficiency tests they must perform. I don't know the exact numbers but I was told from one trainmaster that the new quota is doubled. Also, they must find failure. They even have a quota on the number of failures they must find. So now we have trainmasters constantly performing proficiently tests. They continue to watch a crew until they find a failure even if it takes hours of their day. 

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Posted by MP173 on Tuesday, March 5, 2013 11:20 AM

As previously mentioned "volume is vanity, profit is sanity".

I am a career salesman and proud of it.  At age 57, I am not changing my career.  Absolutely love it.  There are customers which are not worth it.  But, what I have learned, thanks to a very good VP Sales, is to make absolutely certain that the business is NOT worth retaining.  There are times during the economic cycle that volume comes in really handy.

What is tough is no margin business with high levels of service that are required with extremely slow payment of bills.  That is almost always a no win situation.

Ed

 

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Posted by Ulrich on Tuesday, March 5, 2013 10:27 AM

I agree, sometimes one has to fire the customer or cherry pick the work available. Customers are people, and people aren't always right. For example, I know of some shippers who flog their loads out to 500  different carriers, truck and rail, in hopes of finding one in the bunch who is too dumb or desperate to know any  better. Marketing isn't about finding customers...its about finding GOOD customers. The word "good" is key...you can be a great carrier but if the customers you're serving are bottom feeders you haven't got a chance. Conversely, you can be only an average carrier in terms of ability, but if you have great customers you're golden.

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Posted by CNSF on Tuesday, March 5, 2013 9:20 AM
How is Hunter on sales and marketing? Well, during my time at CN he had strong opinions on the subject (and, of course, got his way) but he didn't achieve the track record of success that he did with the operation. I addressed the RoadRailer network earlier. Creating a regional sales force that reported through local operations and was supposed to win back small online shippers that had switched to truck due to neglect from the centralized, commodity-oriented business units didn't work either. "CN International", an overseas container brokerage business, didn't last long. An interchange with UP at Memphis to provide faster intermodal service between Canada and Mexico than was available over KCS flopped (after attempts to build intermodal traffic via KCS didn't go anywhere). Fred thinks Hunter doesn't like premium intermodal service; in fact, Hunter's one big success was speeding up the network, starting with the intermodal trains. Before Hunter, CN's Toronto-Vancouver intermodal service offered fifth morning availability. Hunter took a full day out of that schedule (perhaps at the Canadian's expense?) as part of an overall "nned for speed" push. He even approved a national advertising campaign to promote the speedup. This was actually an idea the intermodal marketing group had been pushing a year or two before Hunter showed up; it took Hunter to overcome the resistance in the operating department. In less than a year we had captured the $50M in new business that we'd forecasted, and growth continued for a while after that. So don't think Hunter doesn't appreciate speed (taking two days out of the round-trip asset cycle actually reduced cost); what he doesn't support is the multi-tiered service level approach BNSF uses. Finally, there is one aspect of Hunter's sales philosophy that I always agreed with. He loved to talk about (not surprisingly, perhaps) the need to "fire the customer" if they weren't willing to pay a reasonable price for the service they demanded. He backed this up by pointing out that if customers didn't pay adequate rates, or made unreasonable service demands, railroads couldn't afford to maintain good service, and everything would gradually deteriorate. Of course, what constitutes "good" service and "adequate" rates is subjective, however, the general concept is smart marketing. During my years at Santa Fe, there were certain customers and blocks of traffic that we always allowed our more desperate competitors at SP to 'win', knowing that they would actually clog up their system and keep them from improving their service enough to attract our more profitable customers.
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Posted by BaltACD on Wednesday, February 27, 2013 4:05 PM

While efficient operations is the 800 pound gorilla in the running of a successful railroad, it is not the only gorilla in the room.  There are business aspects, that while not 100% operationally efficient, are 100% bottom line efficient.

The key to running a financially successful operation is to understand when each aspect is the overall better path for the carrier.

However, if there is not a basic level of operational efficiency none of the 'counter intuitive' business aspects can be successful.  You have to have a solid operational base to build from.

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Posted by CSSHEGEWISCH on Wednesday, February 27, 2013 10:06 AM

I've come to the conclusion that EHH is a pretty good operations man, with all of the strengths and limitations that come with that.  He can run a railroad quite efficiently, as long as he doesn't have to deal with the customers' needs.  Fred Frailey observed that he did not care for high-speed premium rate intermodal operations since they were not an "efficient" use of the railroad's assets.  It should be interesting to see where CP goes after EHH finally retires.

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Posted by greyhounds on Tuesday, February 26, 2013 9:51 PM

MP173

There is a difference between "good" and "bad" business. 

Low margin, short haul, asset consuming business is often not desireable for a Class 1 carrier.  I believe that was the case with the CN's takeover of Wisconsin Central.  There was certain business that fit into WC's business plan which didnt work for CN.  For example, there was a daily intermodal train from the Green Bay area to Chicago.  Good for WC...not so good for CN. 

My guess is that business that was lost to CN across the great Canadian landscape would be highly desireable and worth going after. 

Ed

I'm sure there is business moving CN that the CP would benefit from handling.

But even Hunter can't "command" a sale.  Simply ordering his marketing/sales people to get the business may will motivate them.  But if the customer wants to stay on the CN there's nothing they can do about it.  The CN isn't just going to sit back and watch the CP take its traffic.

He can order hump yards closed, but he can't boss the customers around.  I ran in to several railroad operating types that didn't understand that.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by MP173 on Tuesday, February 26, 2013 2:13 PM

There is a difference between "good" and "bad" business. 

Low margin, short haul, asset consuming business is often not desireable for a Class 1 carrier.  I believe that was the case with the CN's takeover of Wisconsin Central.  There was certain business that fit into WC's business plan which didnt work for CN.  For example, there was a daily intermodal train from the Green Bay area to Chicago.  Good for WC...not so good for CN. 

My guess is that business that was lost to CN across the great Canadian landscape would be highly desireable and worth going after. 

Ed

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Posted by Dakguy201 on Tuesday, February 26, 2013 4:22 AM

AgentKid

Apparently EHH has made it abundantly clear to his marketing staff in central Canada that they have to both get back business they have lost to CN over the last quarter century, and also to find new business opportunities. Or find new employment.

The irony here is that when he was CEO of CN his opponents claimed his insistence on running a tightly scheduled operation was driving customers away.  If that had been true,  there should be very little rail business to get back.

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Posted by cpkoltz2002 on Monday, February 25, 2013 8:39 PM

You may have trouble merging CP/KCS.Doesn't Norfolk Southern have a 30% stake in the Meridian Speedway?

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Posted by AgentKid on Monday, February 25, 2013 4:12 PM

Paul_D_North_Jr
But does he know anything about - or have any interest in - growing the revenue and hence the profit lines, such as through new business, marketing, innovation, new routes and services (other than via merger), more nuanced pricing, etc. ?

Apparently EHH has made it abundantly clear to his marketing staff in central Canada that they have to both get back business they have lost to CN over the last quarter century, and also to find new business opportunities. Or find new employment.

I guess those folks are working on a pretty tight deadline.

Bruce

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Posted by greyhounds on Sunday, February 24, 2013 9:27 PM

CNSF
Just a quick observation regarding Expressway/Roadrailer. Yes, Hunter cancelled CN's Toronto-Montreal Roadrailer service, but only after he forced CN's intermodal department to launch it in the first place. Seriously! The RoadRailers were actually Hunter's idea, and the plan was for a network extending all the way from Montreal down through Chicago to Memphis. That idea died a horrible death due to a massive failure by Hunter and other senior managers outside of the intermodal group to understand the subtleties of marketing/sales channel strategies. The only leg that ever got up and running was Toronto-Montreal, which CN's Canadian-based "retail" sales force (which Hunter wanted to sell the network; he had no interest in relying on the US-based intermodal brokers) had always covered. That it ran at all, and for as long as it did, was due to the fact that Hunter had bought a bunch of equipment and the sales force had made commitments to WalMart, the major customer.

Well, that's interesting.

I wonder what potential he saw in using RoadRailers in a Montreal-Toronto-Chicago-Memphis market.  I'd think they'd limit the opportunities more than they expanded opportunities.  I don't know what freight he would think they could get in RoadRailers that they couldn't get in convential containers or trailers.  On the down side the railroad couldn't handle sea containers or Chicago interchange business on the RoadRailer trains.  I don't see much of an upside to the RoadRailer service.

I'd think they'd be expensive additional trains for pretty limited market potential.

I'm of the opinion that Hunter is a great operating guy with the knowledge and courage to understand what needs to be done and actually do it.  But I think he needs some marketing people who he will listen to.  People who can tell him he's wrong, explain it to him, and not get fired doing it.

No one is strong in all areas.  A good manager will recognize his/her weaknesses and seek input from people who are strong in those areas.  And listen to them.

 

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Posted by Paul_D_North_Jr on Sunday, February 24, 2013 8:21 PM

Clearly EHH knows cost-cutting.  But does he know anything about - or have any interest in - growing the revenue and hence the profit lines, such as through new business, marketing, innovation, new routes and services (other than via merger), more nuanced pricing, etc. ?

- Paul North.   

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by 466lex on Saturday, February 23, 2013 10:30 PM

It would seem the answer is "Yes".  Here is the relevant part of his bio from Wikipedia:

 

E. Hunter Harrison (born 1944), is a railroad executive who has served as the President and Chief Executive Officer of Canadian Pacific Railway (CPR) since June 29, 2012.

Born in Memphis, Tennessee, Harrison began his railroad career in 1964 while attending university in Memphis when he worked as a carman-oiler for the St. Louis-San Francisco Railway.[1] Harrison was later promoted to an operator position with the "Frisco" and, later, with Burlington Northern Railroad (BN) following that company's acquisition of the Frisco in 1980. Harrison was consistently promoted at BN, eventually being appointed Vice-President - Transportation as well as Vice-President - Service Design.[2]

Harrison left BN in 1989 to join the executive team at the Illinois Central Railroad (IC), first as Vice-President and Chief Operating Officer, culminating with his appointment as President and Chief Executive Officer from 1993 to 1998. Following the acquisition of IC by Canadian National Railway (CN) in 1998, Harrison was appointed Vice-President and Chief Operating Officer by CN. Upon the retirement of Paul Tellier, Harrison was appointed President and Chief Executive Officer of CN on January 1, 2003, serving in that position until his retirement on December 31, 2009.

 

He had the impact of a turnaround artist at both IC and CN as head of operations, then served as CEO for 6 and 7 years respectively.  He is rapidly turning CP around, and has already found his successor in Keith Creel, and will probably re-retire in two to four years, per a recent interview (linked to in a post above) after a remarkable career, including 15+ years as CEO of major roads.

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Posted by CSSHEGEWISCH on Saturday, February 23, 2013 6:51 AM

I may be repeating something but I don't know if this question has been addressed:  Has EHH established his reputation as a turnaround artist or as a long-term CEO?

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Posted by pbouzide on Friday, February 22, 2013 4:51 PM

CP is closing the Bensenville *hump* in order to expand intermodal there. It's in the right place, on CP-owned property with no backup move necessary as it was at Schiller Park.

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Posted by chicagorails on Thursday, February 21, 2013 4:46 PM

i thought schiller park was cn rr property now ?  if cp closes bensenville intermodal yard where does cp load unload intermodal at ?  not too smart to have no intermodal term. in chicago. would be the only class 1 rr not to have any in chicago.  and with diesel approaching 5-6 dollars or more a gallon, more trucks will go to rrs to haul cargo.  ihb yard has no intermodal services.

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Posted by Ulrich on Tuesday, February 19, 2013 10:12 AM

Future business growth may come from going after the smaller shippers again. Most manufacturers are small businesses who employ fewer than 100 people. Presently companies like Maritime-Ontario, Day & Ross, TransX, and YRC make a nice margin by consolidating smaller shipments and using the railroads for the linehaul portion....there's no reason why the railroads couldn't improve their own margins on that biz by 15% to 30% by doing that themselves.

Other business might involve taking more control of the sales function in Asia and Europe. It looks to me as if the steamship lines are in control of that, and they are the ones who decide which port (and which railroad) to use. Maybe the railroads could turn that around by going after shippers overseas and then hiring the steamship companies for the ocean voyage. The golden rule of business...he who owns the relationship with the customer makes the most money. Railroads should quit being just a conduit for others and take charge and ownership  of the sales process. There's still lots of low hanging fruit out there to be had.

 

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Posted by CNSF on Tuesday, February 19, 2013 9:46 AM
Just a quick observation regarding Expressway/Roadrailer. Yes, Hunter cancelled CN's Toronto-Montreal Roadrailer service, but only after he forced CN's intermodal department to launch it in the first place. Seriously! The RoadRailers were actually Hunter's idea, and the plan was for a network extending all the way from Montreal down through Chicago to Memphis. That idea died a horrible death due to a massive failure by Hunter and other senior managers outside of the intermodal group to understand the subtleties of marketing/sales channel strategies. The only leg that ever got up and running was Toronto-Montreal, which CN's Canadian-based "retail" sales force (which Hunter wanted to sell the network; he had no interest in relying on the US-based intermodal brokers) had always covered. That it ran at all, and for as long as it did, was due to the fact that Hunter had bought a bunch of equipment and the sales force had made commitments to WalMart, the major customer.
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Posted by AgentKid on Monday, February 18, 2013 1:30 PM

cptrainman

Bruce thanks for the link. . .

I finally had a chance to watch the BNN interview with EHH. For me it was interesting because I have never seen or heard so much of him. Everything I knew of EHH until then was from photos or gossip or words from the employee website.

You're welcome. Truthfully I was exactly the same way. I never had sat down and listened to a full interview with him before.

As to future business for the company, the question for the whole country is where is the future business going to be. Until we can get our energy resources exported to the US and/or overseas, it seems like Alberta and the rest of Canada is starting to go into a state of suspended animation. And Potash, my personal bet for future growth, is in the same boat. There were several recent stories in the business sections about how all of the major producers have suspended, but not cancelled, their planned mine expansions. The biggest customers for Potash are India and China, where purchases are government controlled. China just installed a new leader, and there have been various political issues in India. On a positive note however, Potash Corp. of Saskatchewan did say that their expected sales for 2012 would (should?) now occur in 2013.

There is a lot to be written yet on the future of the CPR.

Bruce

So shovel the coal, let this rattler roll.

"A Train is a Place Going Somewhere"  CP Rail Public Timetable

"O. S. Irricana"

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Posted by cptrainman on Monday, February 18, 2013 11:45 AM

Bruce thanks for the link. I finally had the time to look at the full story. Family and work keep me pretty busy these days.

I finally had a chance to watch the BNN interview with EHH. For me it was interesting because I have never seen or heard so much of him. Everything I knew of EHH until then was from photos or gossip or words from the employee website.

At the end of part two I was almost falling off my chair when the interviewer asked EHH if he wished he had a track to Louisiana like he did at CN. I waited for a big morsel to come out but all I got was a smile and a standard answer from EHH, “You are locked into your franchise.” I am still a firm believer of a CP/KCS merger and I think that such a merger would be the icing on the cake for this part of CP's history.

Nobody knows what will happen with crude-by-rail. Pipeline is more efficient than rail; therefore, pipeline will prevail wherever it is built. On the other hand, rail is already there and is more flexible. Rail can satisfy the short term demands of crude-by-rail so there will always be demand for it. I think a lot of what will happen in the future will depend on the Keystone XL project. Most people think it will be approved and that will signal a change in the demand for crude-by-rail. Demand will eventually decrease as pipelines are built from Bakkan to the Keystone trunk and down to the gulf. A simple google on Bakken will show that pipelines are already being proposed from that region. Environmentalist's are great at delaying the inevitable. Rarely do they win a permanent solution. The crude-by-rail is here now and will be for the short term. Long term? 

Some people here had doubts about EHH at the beginning. I obviously did not. I knew we needed change. We were dying. Interesting, EHH mentioned that he never met a bunch of people so eager to accept change. Without these people EHH would not have been able to turnaround CP so fast. I think even he is surprised. He hasn't been in command for a year yet and already he is mentioning an OR of 71%. This number is actually going to continue downward in the next couple of years as some people close to retirement that were let go were actually bridged. They are still collecting salary until their pension comes. Once they are all off the payroll, OR will drop again.

Again a CP/KCS merger would make CP stock go through the roof. Like a rocket.

What is next? There will be more people laid off once the trains are able to run longer. Fewer locomotives will be needed too and that translates into lower lease, maintenance and fuel costs. CP/CN directional running in the west has given us a bunch of sidings that are no longer used. The rail and ties are being ripped up and relocated to other sidings to extend them. This is obviously a 1 or 2 year project, but once fully implemented it will result in lower OR.

I don't know what else can be done. Everything that has been done should have been done long ago. The costs appear to be under control and the railroad is running more efficient. Either EHH is not tipping his hat but I am starting to wonder where the future growth is going to come from. Sure we can steal back some customers from CN as we are able to offer a better product than before, but that is not new business. I have seen the business between CN and CP shift back and forth over the years. Now some will shift back to CP. In a few years it will shift back to CN again. Where is the new business? Where is the growth in the industry? Bakken? Merger?

Everything so far has been to strip CP down to the bare bones to make the company run efficiently, but I am not seeing anything new at this point in time. This is cookie cutter work EHH is doing: IC, CN, CP. It works. He knows the industry. He knows how to get the most out of his franchise, but once he is gone, then what?

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Posted by AgentKid on Wednesday, February 13, 2013 8:45 PM

cptrainman
I guess EHH likes it or at least see potential in it as it would have been chopped by now.

Continuing Expressway service has raised eyebrows on Canadian forums too. I guess EHH is looking at it from the point that because previous CP administrations have pretty much bollixed up loose car and manifest loadings, he has to generate business somewhere. It is not like there is bulk commodity unit train business in central Canada, and as BaltACD has observed on another thread this past week, intermodal is one of the major rising stars of the railway business.

A day or two after EHH announced Keith Creel was going to be his successor, he gave a pretty good interview on Canada's Business News Network(BNN). It is broken up in to three parts:

  1. The hiring of Keith Creel.
  2. Crude by Rail.
  3. Various topics.

Given the number of threads generated around here on the second topic, I think you will find the second part very interesting. It is very clear EHH has been paying attention to the oil company bosses over lunches at the Petroleum Club and Chamber of Commerce, here in town. Very interesting observations.

Without further ado, here is the link:


http://watch.bnn.ca/#clip859595

On a personal note I was none to sure EHH was a good thing for CP in the beginning, but I am starting to give him some respect. He has that reputation of trying anything new simply because it can be tried(which Fred Frailey seems to like, as noted in his monthly column in the March TRAINS), but he does seem to give more thought than I expected before he makes his moves.

Bruce

So shovel the coal, let this rattler roll.

"A Train is a Place Going Somewhere"  CP Rail Public Timetable

"O. S. Irricana"

. . . __ . ______

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Posted by beaulieu on Wednesday, February 13, 2013 9:51 AM

I am hearing reports that when the current generation of Roadrailer trailers reaches their age limit that Triple Crown Services will merge with Thoroughbred Direct, and NS will no longer use Roadrailers. This surprised me.

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Posted by greyhounds on Tuesday, February 12, 2013 11:55 PM

I would have thought that Expressway would have been one of the first things he'd eliminate.

He pulled off the Montreal-Toronto RoadRailer at CN and shut down the Chicago-Twin Cities intermodal train on the CP.  Maybe he sees some potential in the Expressway service/equipment.  Maybe he just hasn't gotten around to it yet.

I've always thought the Expressway concept had some good potential for shorter haul/lower volume intermodal markets.  But it hasn't been adopted outside this one lane on the CP. 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.

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