By Jeff Stagl, Managing Editor
A Class I marketing executive and transportation officer from a major rail shipper factored the importance of small railroads in the big freight-rail picture during presentations Oct. 27 at the American Short Line and Regional Railroad Association’s (ASLRRA) Central & Pacific Region Meeting in Milwaukee.
Union Pacific Railroad Vice President of Marketing and Sales-Industrial Jacqueline Bendon said short lines are critical to the company’s success. UP interchanges with 220 short lines, which help extend the Class I’s reach by an additional 20,000 miles of track, she said. Last year, UP moved 1.45 million carloads with small railroads.
“Our volume with short lines is up 4% this year,” said Bendon, adding that much of that traffic involved industrial products.
Another thing that’s crucial to UP: better service performance. Since early summer, the Class I has registered sequential improvements in key service metrics, said Bendon. For example, freight-car velocity has improved 12% to 197 miles per day.
“It was in the 180s not that long ago. We want it to be north of 200,” said Bendon.
In addition, operating car inventory — which best reflects any network congestion — has recently decreased 5% to 191,094 cars. However, “we want it to be 10,000 cars less,” Bendon stressed.
UP’s carload volume with short lines is up 4% so far in 2022 after reaching 1.45 million units in 2021, Bendon said. Much of the traffic involves industrial products. Jeff Stagl Whether with short lines or independently, UP needs to provide better service so it can continue to carry out its foundational customer-centric growth strategy, she said. Building more business is a challenge because key indicators show signs of economic slowing.
“We are seeing housing starts fall off quite significantly … and truck prices are coming down,” said Bendon.
One ongoing charge UP can’t afford to slow down is hiring. UP’s goal of hiring 1,400 train and engine employees by year’s end is within reach, Bendon said. The Class I has graduated 890 employees so far this year and has an additional 518 in training, all of whom are expected to graduate by Jan. 1.
UP is applying more targeted training at recruits to help ensure they pass the required FRA test and get onboarded more quickly, said Bendon. And to attract more applicants, railroad recruiters are calling people who don’t complete an application online to learn the reasons why, she said.
Since sustainability is just as big a push as hiring, UP recently acquired 20 battery-electric locos for testing, launched a three-year locomotive modernization program and implemented a goal to eventually use 100% renewable fuel blends in all motive power.
And because technological advances also are high on the growth agenda, UP continues to pursue rail-car telematics as a recent joiner of RailPulse, said Bendon.
RailPulse was formed in 2020 as a coalition of rail-car owners working jointly to support the development and use of GPS and other telematics technologies on cars. The goal is to provide real-time information and sustained visibility of a car’s status, location and condition to shippers, rail-car owners and railroads. The other RailPulse members are Norfolk Southern Railway, Genesee & Wyoming Inc., Watco, Railroad Development Corp., TrinityRail, The Greenbrier Cos. and GATX Corp.
Packaging Corp. of America (PCA) — a major rail shipper that produces packaging materials and paper — is kicking the tires on rail-car telematics, too. Working with TrinityRail, PCA is testing GPS telematic devices on 10 to 12 box cars, said Ross Corthell, the shipper’s VP of transportation, during a fireside chat-type presentation. The discussion was moderated by ASLRRA Chairman Stefan Loeb, Watco’s executive VP and chief commercial officer.
(From left) Packaging Corp. of America VP of Transportation Ross Corthell and ASLRRA Chairman/Watco Chief Commercial Officer Stefan Loeb addressed several short line-relevant topics during a fireside-type chat. Jeff Stagl Since PCA ships products on thousands of rail cars — and its freight spend has been “through the roof” of late — the company is interested in determining if RailPulse could further move the needle on its transportation needs, he said. GPS devices have been mounted in trucks for decades, but PCA has found 10% of the devices aren’t effective in providing the precise location of trailers.
“With box cars, that dilemma would be on steroids,” said Corthell. “Conceptually this is spot on. We are encouraged by this move in the rail industry, but it’s not proven out yet to see if it can fit our own needs.”
Headquartered in Lake Forest, Illinois, PCA operates 96 box plants and eight paper mills. The company owns the Minnesota, Dakota & Eastern Railroad, which “gives us a unique insight on the intricacies of operating a railroad,” said Corthell.
Touch points are crucial during a shipment’s first and last mile, and that’s where short lines excel, he said. Service performance is critical for all involved railroads, but PCA isn’t afraid to be accountable for its role in holding up or altering shipments, said Corthell. Yet, the bottom line for the shipper is all railroads need to perform and execute.
“What I’d say to railroads is be reliable and consistent, and drive good value for that. Take the variability out,” Corthell said. “Be creative in how short lines manage with Class Is. They need to calibrate the messages given to shippers.”
He cited Watco’s Fox Valley & Lake Superior Railroad (FOXY) — which serves PCA’s major paper plant in Tomahawk, Wisconsin— as a prime example of a railroad working well in tandem with his company. Watco formed the short line earlier this year after acquiring several Wisconsin lines from CN.
“They performed right off the bat,” Corthell said of FOXY, adding that both parties were able to coordinate transportation efforts without building any tension.
