From one fellow MIT Old Senior House Alumnus:
This is a common problem in corporations that are KPI-driven. (Full disclosure: I spent many years in the "corporate performance management" space, and helped many firms implement the software systems that track Key Performance Indicators, like the metrics discussed below).
This is sadly common in many organizations. There are very few (if any) metrics that are both meaningful and free of side effects. From toxic metrics at banks that fleece low-income customers to counterproductive ones (like those below), they remind of the joke about the drunk looking for his keys under the streetlight. He didn't lose them there, but at least he has some visibility.
You've hit on the one thing that can best minimize the negative: are you actually helping your customers do what they need you to do? If you focus on that, good things come. Focus on internal metrics, and you get gamesmanship.
It's particularly ironic, given that the classic HBR article, "Marketing Myopia," published in 1960 and excoriating the railroads for their inability to understand customer needs, is still relevant today. Getting my MS at NYU, Burlington Northern was a case study in the inability to adopt technology.
Now it's 2021 and I'm sad. I love rail travel. And rail freight could be so much better.
Shadow the Cats owner The railroad industries problem is twofold. They have forgotten how to market their industry. 2nd and this the biggest problem they have become consumed with the all powerful Operational Ratio and seeing how low they can lower it. By doing that they run off business that they think will not make them enough money to justify the costs to service it. A customer that makes you a 10% profit is still one that contirbutes to the profit margin. You drive him off that revenue is gone and you more than likely will never get it back again. So you start losing a million dollars here and there next thing you know your bosses decide a 10 million dollar contract isn't enough for them to service so they get run off. Then you start running into real money flying out the window in lost revenue that can not be made. I would rather have a railroad that went after the business than one that wants an OR of around 50.
The railroad industries problem is twofold. They have forgotten how to market their industry. 2nd and this the biggest problem they have become consumed with the all powerful Operational Ratio and seeing how low they can lower it. By doing that they run off business that they think will not make them enough money to justify the costs to service it. A customer that makes you a 10% profit is still one that contirbutes to the profit margin. You drive him off that revenue is gone and you more than likely will never get it back again. So you start losing a million dollars here and there next thing you know your bosses decide a 10 million dollar contract isn't enough for them to service so they get run off. Then you start running into real money flying out the window in lost revenue that can not be made. I would rather have a railroad that went after the business than one that wants an OR of around 50.
I think the "$10 million a year isn't enough" mark was passed years ago. I know of a few chances for business that would've been 6 or 7 million dollars profit, that could've been handled in existing trains, wouldn't have required more crews or train starts and was passed up.
Jeff
We are hearing rumors from one of our larger customers in the town North of here that CSX is thinking of stopping their rail service to this one plant. Last year they shipped over 2K loads into and out of this plant. Just when will this PSR madness end. These railroads sooner or later are going to tick off a customer that has the balls to go the Federal Government and say we need them reregulated this madness has to stop. It is beyond stupid anymore with what they are doing to customer service anymore. NS just tried to bill us for their rerouting of those 2 cars back to PA.
Shadow, you said it very very well. Maybe there is hope with BNSF.
Greyhound Santa Fe knew how to market their Transcon Intermodal service. They literally got the largest OTR carriers to switch from running longhaul services to IM containers in the 90's. How they offered great service for rates that allowed the OTR companies to keep charging their customers the same rates but make more money on each haul. My boss just took a customer from JB Hunt from the DFW to Chicago area by offering them a cheaper rate than JB was charging them and we are going to be doing it faster than JB can via container IM. For us it gets 10 loads a week back to Illinois and we no longer need a broker to find loads for those trips.
Greyhound, your statement that the Government would not permit RRs to do market development had some truth---- pre-Staggers.
But not afterward.
And short lines and regionals and KCS do it routinely and as well as they can, given their dependence on the Class Ones that don't.
BackshopI'd worry more about a hook going into my thigh.
Worry as much as you want to, if something like that happened it was your own fault.
Words from my own dear mother: "If you get hurt by an animal it's your fault, not the animal's." i.e., horses kick. If you got kicked by a horse it was your fault, not the horses'.
I took a pony's kick into my right shoulder. And then I got an explanation as to why it was all my own fault.
I'd worry more about a hook going into my thigh.
greyhounds Our job was to pull the bales out of the baler with a hook...
And make sure you knew where that hook was at all times - farmers don't appreciate the possibility that one of those hay hooks was firmly imbedded in one of those tractor tires...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
greyhounds Did anyone else work on a hay rack behind a baler. The bales weighed around 75 pounds. They'd first mow the hay and then mechanically rake it into rows. Then they'd hook up: 1) a farm tractor, 2) the baler, 3) a hay rack. On the rack were often two teen age boys. Our job was to pull the bales out of the baler with a hook and stack them on the hay rack as it moved through the field. We'd load up one rack, drop it, and hook on another empty rack. Then we had to unload 'em into the barn. It's far more automated now. That work, along with hoeing watermelons, made me opt for college.
Did anyone else work on a hay rack behind a baler. The bales weighed around 75 pounds. They'd first mow the hay and then mechanically rake it into rows.
Then they'd hook up: 1) a farm tractor, 2) the baler, 3) a hay rack. On the rack were often two teen age boys. Our job was to pull the bales out of the baler with a hook and stack them on the hay rack as it moved through the field. We'd load up one rack, drop it, and hook on another empty rack. Then we had to unload 'em into the barn. It's far more automated now.
That work, along with hoeing watermelons, made me opt for college.
Never worked on a hay rack - no one in the area where I grew up had anything that fancy. Loading hay for my father's cows wasn't too bad - the guy he bought hay from used a (small bale) baler that dropped the bales on the ground, then my brother and I picked them up and threw them into the back of a pickup truck. My father insisted the baler be adjusted so the bales were about 50 pounds, and a pickup bed wasn't too high off the ground, so loading that hay wasn't too bad.
The tough hay loading I got involved with was when I worked for a guy who had a grocery store, a feed-and-seed store, a slaughterhouse and two big farms. I officially worked in the grocery store, but when he ran short of help in the hayfield I was unlucky enough to be sent to do that. I always thought his baler was worn out, but it produced the 25-lb. and 75-lb. bales you mentioned. Didn't help that we were loading the hay into a beat-up 5-ton truck with a maladjusted carburetor (produced clouds of evil-smelling smoke). Also didn't help the bed of that truck was about 5 feet off the ground. At the end of a very long day I never wanted to see hay again.
The worst was picking tobacco. It felt like the temperature was 10,000 degrees in the tobacco patch. About 5 minutes after beginning to pick, your arms were covered in tar from the tobacco, and about 5 minutes after that they were also covered in dirt. Five minutes after that you had sweated to the point your clothes were soaking wet, and you stayed hot, nasty and sweat-soaked until the end of the day. At least I never worked hanging the sticks of green tobacco in the barn - that wasn't quite as nasty as picking, but was even hotter.
Those adventures, plus seeing guys 50 years old still doing that kind of work, convinced me to go to college so I could get a job where I sat down in an air-conditioned office all day. I would have walked barefoot on broken glass for 5 miles through a cactus patch naked before spending my whole life working in hay and tobacco.
greyhounds BaltACD However, the hallmark of PSR is reduce bandwidth and the costs that it brings to the OR. OK, if you take pleasure from hating Hunter Harrison and PSR I'll just ignore it. Whatever floats your boat. But this nationwide problem with railroad marketing and market development antedates PSR by decades. The economic regulators of the government, the literal Spawn of Satan, simply would not allow our railroads to do market development. So, does it surprise you that railroad marketing departments are weak sisters to the operating departments? If anyone wants salient examples of government economic regulators flat out blocking railroad innovation and market development, I can sure provide them. Our railroads are now largely free from the asinine economic regulations of the past. And I will keep saying they need to do better at marketing and market development until the day I die. But things didn’t get to where they are now because of PSR.
BaltACD However, the hallmark of PSR is reduce bandwidth and the costs that it brings to the OR.
OK, if you take pleasure from hating Hunter Harrison and PSR I'll just ignore it. Whatever floats your boat.
Rail marketing has been lacking over the years and is even more lacking these days. My understanding was that EHH eliminated all marketing positions once he was installed at CSX in the name of PSR. Anytime you manage a company to one specific indicator you lose sight of all the other indications that are needed to progressively manage the enterprise into a profitable and repeatable future.
My observations from afar, with EHH suffering from chronic emphysema or some other respritory condition requiring the use of oxygen during normal daily activities - I feature he was damaged goods when installed at CSX and was mentally defective from repeated oxygen deficits over the years of his illness.
Never too old to have a happy childhood!
greyhoundsBut things didn’t get to where they are because of PSR.
Sure as hell didn't help, despite what the EHH fanbois say.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
BaltACDHowever, the hallmark of PSR is reduce bandwidth and the costs that it brings to the OR.
greyhounds MP173 I do not see UP or others adding these types of facilities. Not in their bandwidth...but a regional or shortline could do it, as they look for transportation revenue, rather than railroad revenue. I do think these are better served by 3rd party providers that can tap into other aspects of the supply chain. Unfortunately, I agree with you. The UP, and others, don’t have the “Bandwidth” to do this. They need to acquire more bandwidth.
MP173 I do not see UP or others adding these types of facilities. Not in their bandwidth...but a regional or shortline could do it, as they look for transportation revenue, rather than railroad revenue. I do think these are better served by 3rd party providers that can tap into other aspects of the supply chain.
However, the hallmark of PSR is reduce bandwidth and the costs that it brings to the OR.
MP218There is demand for agricultural products in the Pacific rim. High rates of empty contaiers returning to Asia make for cheap freight. Currently, the manufacturers are often demanding containers return empty to get reloaded faster than messing with loading and unloading. This has created shortages of containers for loading of ag products. Afalfa hay would not be shipped over in the small bales of our younger days. Most hay is not handled by hand anymore. The horse market is one stronghold for small bales. It would be baled in large rectangular bales in sizes up to 4 x 4 x 8 ft, weighing up to a ton. It is then compressed once more to reduce volume before container loading. Grass seed growers in the Pacific NW have long baled their grass straw after seed harvest, compressed it and sent it to Japan and Asia. Main ag exports from the Minot terminal would likely be dry peas, edible beans which are popular foods. Export Grain and oil seeds used for specialty human consumption are often shipped to small processors in containers. In short these are niche markets for ag. producers.
Afalfa hay would not be shipped over in the small bales of our younger days. Most hay is not handled by hand anymore. The horse market is one stronghold for small bales. It would be baled in large rectangular bales in sizes up to 4 x 4 x 8 ft, weighing up to a ton. It is then compressed once more to reduce volume before container loading. Grass seed growers in the Pacific NW have long baled their grass straw after seed harvest, compressed it and sent it to Japan and Asia. Main ag exports from the Minot terminal would likely be dry peas, edible beans which are popular foods. Export Grain and oil seeds used for specialty human consumption are often shipped to small processors in containers. In short these are niche markets for ag. producers.
A number of years ago, prior to the enlargement of CSX's Virginia Avenue Tunnel, several Chichago-Florida merchandise trains got rerouted to head South via VAT and the I-95 corridor. The reroutes activated the High Car Detector that protected VAT - the cars that were found to be high were loads of Alfalfa Hay going from Larsen Farms in Idaho to Ocala, FL. Ocala is the heart of Florida horse country.
https://www.larsenhay.com/our-story/
The hay was loaded to the 20'2" loading plate of double stacks, however at the time VAT was only good for 17'5".
Out here on the plains, the Far East is a huge market for our products. We ship large amounts of grain, beef, and pork to China and Japan.
In the fall, a lot of grain sits in huge piles on the ground, waiting for train cars to haul it.
Even during the tariff issues several years ago, China continued to buy large amounts of grain from the Midwest U.S.
While hay bales provided employment for high school boys, today the small rectangular bales are almost gone. In their place are the huge round bales that can weigh up to 1,500 pounds.
York1 John
There is a HUGE demand in Asia for high quality animal feed. They simply can not produce enough to feed their animals for their own needs. I know of a farmer in my area that grows soybeans for export to Japan that are made into soy sauce in Japan. They grow a very specifc type of bean that the factory wants grow it organic and ship it all over to Japan for high end soy sauce. Another grows something that has made some cattle producer in Japan go I need more of this and is shipping tons of his grain over to Japan every year for Kobe Beef.
There is demand for agricultural products in the Pacific rim. High rates of empty contaiers returning to Asia make for cheap freight. Currently, the manufacturers are often demanding containers return empty to get reloaded faster than messing with loading and unloading. This has created shortages of containers for loading of ag products.
I also did the stacking on the haywagon and again in the mow. I did not grow up on a farm but "hired out" to help with hay. Hard work. But in my small Northeastern WI home town it paid off in the fall on the football field, at least.
Murphy SidingThat operation was more refined than where I stacked bales. We had to pick them up off the ground, bounce them on a knee to get enough oomph to throw them on a hay wagon about 4 feet high. The guys on the wagon then stacked them.
Did that, too, if the wagons got too far behind with unloading, the baler would simply dump them on the ground. Sure does a number on a pair of jeans, though.
greyhounds Murphy Siding I never would have imagined that you could send containers of hay from Idaho to asia and turn a profit. I see this a just plain great for a lot of reasons. I'm also disturbed that the UP's marketing people couldn't/didn't put this together themselves. They're allowing other people to control the future of the railroad. Oh well, it's better than nothing. Did anyone else work on a hay rack behind a baler. The bales weighed around 75 pounds. They'd first mow the hay and then mechanically rake it into rows. Then they'd hook up: 1) a farm tractor, 2) the baler, 3) a hay rack. On the rack were often two teen age boys. Our job was to pull the bales out of the baler with a hook and stack them on the hay rack as it moved through the field. We'd load up one rack, drop it, and hook on another empty rack. Then we had to unload 'em into the barn. It's far more automated now. That work, along with hoeing watermelons, made me opt for college.
Murphy Siding I never would have imagined that you could send containers of hay from Idaho to asia and turn a profit.
I see this a just plain great for a lot of reasons. I'm also disturbed that the UP's marketing people couldn't/didn't put this together themselves. They're allowing other people to control the future of the railroad. Oh well, it's better than nothing.
Thanks to Chris / CopCarSS for my avatar.
diningcarMy first experience with harvesting hay was a mowing machine with a seven foot sicyle. We then raked the hay and with a 'buck rake' we pushed it onto a stacker where the hay was thrown up onto what was to become a 'hay stack'.
We have old order Amish in this area - we get to see that first hand.
Started out in 6th grade at $1 per hour....BIG MONEY!
Ended my hay baling career going into Senior year of HS (1972) @ $2.50 to $3.00 per hour. BIGGER MONEY! I was in demand and would often work 5 days per week when the alfalfa was cut - usually 3 or 4 cuttings per season. Easy money was the straw baling, much lighter.
Tough aspect of the job was stacking the bales in the barn - attics were brutally hot and dusty.
One of my favorite memories was working for a dairy farmer and at the end of the day he would pull pure milk from his dairy cooler (just milked) and add chocolate powder. What a drink at the end of a hot day.
Greyhound, I do not see UP or others adding these types of facilities. Not in their bandwidth...but a regional or shortline could do it, as they look for transportation revenue, rather than railroad revenue. I do think these are better served by 3rd party providers that can tap into other aspects of the supply chain.
Ed
My first experience with harvesting hay was a mowing machine with a seven foot sicyle. We then raked the hay and with a 'buck rake' we pushed it onto a stacker where the hay was thrown up onto what was to become a 'hay stack'.
The balers came later.
greyhoundsDid anyone else work on a hay rack behind a baler. The bales weighed around 75 pounds. They'd first mow the hay and then mechanically rake it into rows.
Indeed, I did. During summer vacation one year I joined my cousins baling hay for a week - made $19! Learned how to stack the bales so they'd stay stacked on the trip from the field to the barn.
Didn't work in the mow, fortunately - that's hot, dusty work.
"Kick" balers were all the vogue for quite a while. Hopefully the baler was doing a good job tying the bales or you got a heck of a mess.
The baler I dealt with had a metering problem - you'd get a nice "pony" bale out - short and easy to pitch - but the baler made up for it with the next bale, which would be long, heavy, and unwieldy.
These days most farmers around here are doing the big round or square bales. No pitching them.
The local farmer where I grew up had a John Deere baler that would automatically toss the bales into a wagon. The farmer could tilt the mechanism to compensate when going around corners, but sometimes would miss.
Sounds similar to a facility opened in North Dakota:
https://www.agweek.com/business/6765078-Minots-new-intermodal-rail-ramp-%E2%80%98ramps-up%E2%80%99
Mark Meyer
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