What makes Precision Scheduled Railroading different?

Three times in the past month I have heard rail executives utter the same phrase about Precision Scheduled Railroading: “It’s not rocket science.” And when you listen to skeptics of PSR, you get the feeling that the operating model is nothing more than Railroading 101.

Case in point: Earlier this year BNSF Railway’s chief executive, Carl Ice, said that most of what PSR railroads do – setting schedules for individual cars, focusing on terminal dwell, running longer trains, and quickly turning assets like locomotives, cars, and crews – are things that any good railroad does.

If PSR is some secret sauce, then it’s a recipe that your grandfather shared with everyone. My inbox overflows with email from retired railroaders who say there’s nothing new under the PSR sun. Their common theme: Fill-in-the-blank railroad followed PSR practices in 1957 or 1962 or 1973, long before E. Hunter Harrison took his operating model from Illinois Central to Canadian National and, eventually, Canadian Pacific and CSX Transportation.

But this leads to a couple of nagging questions. If PSR is merely simple, back-to-the-basics railroading, then why did Kansas City Southern, Norfolk Southern, and Union Pacific have to bring in CN and CP veterans to help overhaul their operations? There must be something different about PSR, something that sets it apart, right?

People who worked alongside Harrison tell me the answer boils down to three things. First, PSR requires cultural changes. Second, it’s about operational discipline and simplicity. And third, it’s about using data to manage your operations differently.

Cultural change at a company is one of those squishy things that’s hard to get your hands around. A Harrison colleague uses a sports analogy to explain: Imagine a football team fires its coaching staff after yet another losing season. In comes a new coaching staff, which turns the same team into a winner. How? They bring in a new attitude, a fresh set of eyes, and different expectations. The implementation of PSR works in much the same way.

Hunter was a change agent who blew up the culture at CN, CP, and CSX. In but one high-profile example, CSX was hump-centric before Harrison arrived. The mindset was if you’ve got a hump you’d better use it. Hurricane Hunter wiped out that way of thinking – along with the humps at eight of the railroad’s dozen classification yards. The people he taught at CN and CP are now doing the same thing, albeit in a much more measured way, at KCS, NS, and UP.

Part of a PSR company’s new culture is a renewed sense of discipline all across the railroad, from operations and engineering to finances and marketing. But operations aren’t just tweaked here and there. They’re knocked down and rebuilt from scratch. They’re also simplified, which makes the plan easier to execute. “Hunter took a business that we had overcomplicated and brought it back to simple,” says Eric Jakubowski, who worked alongside Harrison at CN and is now chief operating officer at shortline holding company Anacostia Rail Holdings.

Harrison also understood the potential of Big Data before it was called Big Data. And that allowed him to upend longstanding management practices. Jakubowski says Harrison realized you’re only dealing with hundreds of train movements at any one time. With information technology systems providing greater visibility into operations than ever before, Harrison figured you should be able to find problems, track them down, and react in real time. Local operating people could no longer hide their problems by pushing them down the line because their fingerprints would be all over the data.

What this means, Jakubowski says, is that Harrison could aggressively push decision-making out of headquarters and down into the field as far as it would go. Superintendents and trainmasters understand the operating plan and have the authority to adjust their operations as local volumes fluctuate from day to day and week to week. Decisions are made with one eye on efficiency at the local level, and one eye on what’s good for the overall network. They’re also made with far fewer people involved.

Compare this to the old top-down approach. On pre-PSR CSX, for example, a superintendent once had two eastbound intermodal trains arrive simultaneously in Selkirk, N.Y. One was a short UPS hotshot, but both trains were headed for the same intermodal terminal in Worcester, Mass. So he combined the trains, moving the traffic with one fewer crew and two fewer locomotives. Even though the combined train arrived on time, the next day he caught hell from headquarters in Jacksonville. Why? He didn’t run both trains as planned! Today, under PSR, the superintendent’s decision would be the right one because it provided the same level of service at lower cost.

If this all sounds basic, it is. But that’s exactly the point: PSR uses simple operating principles that are not necessarily easy to apply consistently day in and day out. If they were, KCS, NS, and UP would have stuck to the status quo, streamlined their operations, and shown the financial improvements of CSX, CP, and CN. Instead, they shifted to operating plans based on Precision Scheduled Railroading. And they imported the outside help necessary to get the job started.

You can reach Bill Stephens at bybillstephens@gmail.com and follow him on Twitter @bybillstephens