RailTrends to highlight 'The Great Experiment,' next-gen leaders — by Tony Hatch

Every winter we begin the RailTrends^® planning process with apprehension about the agenda, trying to top the prior fall’s success. But usually, events conspire to bring us a theme, and this year was no different.

Last December, Norfolk Southern articulated a new strategy at its investor conference: longer term, through-a-cycle investing (including in labor), a focus on ROIC over OR (mentioned just once in 100+ slides). And with that began what I call “The Great Experiment,” an approach that swept the industry, becoming the focus behind the spring investor conferences from both Canadian carriers (and soon, CSX?).

Not that there’s been an unbroken line of success since the new strategies were unveiled — traffic’s been lousy and lousiest in the critical intermodal sector. Regulatory and legislative fights remain unresolved, heightened by the high-profile NS incident in East Palestine, Ohio.

Despite all that — and aided by NS’ (and his) actions after the derailment, and in the face of intense and often misguided (or cynical and self-serving) pressure — we decided to bestow the 2023 Railroad Innovator Award to NS’ Alan Shaw. And when he receives the award and addresses the crowd at RailTrends ’23 (Nov. 16-17, New York Marriott Marquis), I think you’ll see why. Meanwhile, this year’s emerging themes: Resiliency, Resurrection and The Great Experiment.

The Pivot — is it finally here?

A major theme running through the industry that will be discussed at RT is the correlation between service and growth. And we have two of the most important leaders with this focus in mind: CPKC’s Keith Creel, a prior Innovator Award winner, and CSX’s Joe Hinrichs (a future winner?). In fact, Keith has had so many good seasons in a row, he’s like Mike Trout of a few years back — one looked for alternatives to the same old winners, despite the stats. And over the course of the year, Joe has clearly shown himself to be someone without preconceived notions of how things should be done.

Also in the growth/service category: an intermodal panel featuring the “Glimmer Twins”: BNSF’s Tom Williams and J.B. Hunt’s Darren Field. Their success in share and volume may ruffle a few feathers, but it’s essential to changing the narrative. In addition, CN’s Patrick Lortie will discuss how his railroad views its opportunities, and UP’s new president (and multiyear RT participant) Beth Whited can enlighten us to the changes at Uncle Pete under new management. Finally, and not to be missed: CPKC’s Pat Ottensmeyer, another previous Innovator Award recipient, will talk on nearshoring and the USMCA.

I have always considered short lines absolutely critical to carload growth and first/last mile service, and we have a box car full of ’em. Witness our annual panel featuring the esteemed leaders of Gulf & Atlantic Railways (Ryan Ratledge), Railroad Development Corp. (Henry Posner III) and OmniTRAX (Dean Piacente). And that’s not all! We have broken out two former panelists — Genesee & Wyoming’s North American CEO and RT vet Mike Miller; and on the occasion of R. J. Corman’s 50th anniversary, its CEO Ed Quinn.

We have a few presentations in the “keeping them honest” category, starting with our regulator-in-chief, STB Chairman Marty Oberman — he of the nasty, Clayton Kershaw-like curveball on reciprocal switching. Countering them, professionally and figuratively, are the Washington (& Ottawa) Corps — the AAR’s Ian Jefferies, in session with ASLRRA’s Chuck Baker and RAC’s Marc Brazeau. Also articulating their members’ positions will be the heads of RSI (Patty Long), NRC (Ashley Wieland), REMSA (Urszula Soucie) and IANA (Rob Cannizzaro.)

I’d also put our annual analyst panel in this category, especially the two we have back again to join me (Loop Capital’s Rick Paterson and Gross Transportation’s Larry Gross), as well as the consultants: RT lead sponsor Oliver Wyman’s Adriene Bailey (on a new theme this year) and in a debut, Boston Consulting Group’s David Schaar. These guys have certainly not drunk the Kool-Aid and historically have held Class Is to account; I expect nothing less here.

Knowing GATX Rail’s Paul Titterton as I do, I was tempted to put him in the “keeping them honest” category, wishing to see a carload growth focus; or, I could have placed him under “technology” as a founding father of RailPulse. But I’ll put him in the rail-car market category, along with the irrepressible Dick Kloster. That leaves Nexxiot’s Ken Mannka as the sole presenter on technology, but with five RailPulse members on the agenda, plus all the new technology investments of late (CPKC and hydrogen, NS and DrayNow, CN and air cars, GWR and Parallel Systems, etc.) I suspect Ken will hardly be a lone voice in the wilderness.

Tony Hatch is an independent transportation analyst and consultant, and program consultant for Progressive Railroading’s RailTrends^® conference. Email him at abh18@mindspring.com.