No. 2: The impact of Precision Scheduled Railroading
Hunter Harrison may be gone, but the former CN, CP, and CSX CEO lives on in an annual spot in the Trains Top 10 through his . Harrison himself was the No. 1 story in 2017; since his passing, PSR was No. 2 in 2018 and No. 6 a year ago.
The high ranking is understandable. In some form, PSR has officially been embraced by every Class I railroad except BNSF — the one not wedded to quarterly reports to investors highlight operating ratio, the return-on-investment stat of choice for PSR proponents. For railroads, it’s a winning proposition for driving costs down — running fewer but longer trains, a key tenet of PSR, means using fewer locomotives and fewer people. That last point is a big reason PSR is not popular with employees, or furloughed workers — and probably does much to explain how railroads took three of the top five spots in a recent MoneyWise ranking of the worst places to work.
It also has made the hump yard an endangered species — Norfolk Southern has idled six humps in a year, and UP has shut down six since launching its version of PSR in October 2018 (although it has temporarily reopened one at North Platte, Neb.).
CEOs say the lowered costs that come with PSR prove “more opportunity to bid on more markets” (Union Pacific’s Lance Fritz); has added $1 billion in carload traffic, with the prospect to “add another billion topline to this company” (Canadian Pacific’s Keith Creel); and that it has improved service to the point that “many of our customers … refer to our service today as trucklike.” (CSX’s Jim Foote).
At least some customers don’t necessarily agree. An Oliver Wyman survey found all shippers preferred trucks because of better on-time performance, ability to track shipments, and equipment availability. At least some blame Precision Scheduled Railroading for their issues with railroads: “PSR has not yielded positive results in service, transit, or reliability,” one said. And a coalition of shipper groups is seeking more local service information from the Surface Transportation board, saying there is a gap between current data reported to the STB and actual service. PSR has figured into that problem, they say.
However, for railroads — and their investors — the pros of PSR outweigh any cons. So don’t be surprised to see Precision Scheduled Railroading on next year’s Top 10 list, too. It’s not going anywhere.
Additional News Wire reading:
“Kansas City Southern touts Precision Scheduled Railroading, pandemic-related operational improvements,” Aug. 5, 2020
“Panel looks at PSR impact on Class I, shortline railroads,” Aug. 14, 2020
“Shippers ask regulators to order Class I railroads to report on local service performance,” Sept. 2, 2020
“Norfolk Southern to idle its sixth hump, and yard in Macon, Ga.,” Oct. 28, 2020
“Shippers, critical of railroad service, continue to shift to trucks,” Nov. 20, 2020
“Class I railroad executives tout growth prospects, customer focus,” Nov. 24, 2020
“Union Pacific CEO says Precision Scheduled Railroading will unleash volume growth,” Dec. 4, 2020
Coming Monday: The No. 1 story
Previously: Top 10 stories Nos. 8-10; Nos. 5-7.
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December 24, 2020 at 08:20PM
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News Wire Top 10 stories of 2020: Nos. 2-4 - trains.com
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