PSR- Is It Working?

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PSR- Is It Working?

This was the big question attendees had at the spring conference in Baltimore for the North East Association of Rail Shippers (NEARS) earlier this April. Who started Precision Scheduled Railroading (PSR) that is radically changing the railroad industry, and has all the promise of benefit come to fruition? What has been the impact on carriers and customers, good and bad?

The speaker lineup was pretty impressive, from the kickoff by Gil Lamphere, Chairman, MidRail LLC, to the Friday morning presentations by Alan Shaw, EVP and CMO of Norfolk Southern, and Todd Tranausky, VP Rail and Intermodal of FTR. Every speaker or panel was focused on this one topic, PSR. To no surprise the carriers presented why PSR is essential to the future of railroading and why all class I’s but BNSF have adopted its practices. Suppliers, financial wizards, and analyzers presented different perspectives of its intentions, successes, and failures.

Here are a few takeaways from what I heard and saw both from the speakers and from conversations throughout the conference.

  • Hunter Harrison is THE name associated with PSR, but his is not the only one. Gill Lamphere made the case that Ed Moyers, former CEO of Illinois Central, was at minimum one of the founding leaders of PSR if not its original architect in theory.

  • Operating Ratio is allegedly one of the key metrics for PSR’s success, but Tony Hatch suggested at least if not more important is if ROI is higher than CAPEX. If not, service, equipment and track, etc. all suffer regardless of other measures.

  • According to presentations by shippers and analysts the jury is still out on whether PSR has significantly benefited anything by stock prices and operating ratios.

  • Cycle times typically increase as PSR rolls out, and the promised decreased cycle times have yet to materialize.

  • Even if shippers claim a shortage of cars the Class I’s tend to reduce the fleet.

  • Private car ownership or leasing is expected to grow as a percentage of the national fleet as a result of PSR.

  • Most shippers (anecdotally) see PSR as a lot of promise but mostly creating more challenges, less options, less overall service, and more hope than anything else.

For some suggestions on how to cope with all the changes see my November article by clicking HERE>>.

To learn more about how PSR is changing the industry and steps you can take to minimize its towering impact contact me at (330) 617-4104 or dennis@ihlogistics.com.

By | 2019-04-30T14:38:02+00:00 April 30th, 2019|logistics|0 Comments

About the Author:

Dennis Wilmot started Iron Horse in January 2002 after eleven years working for rail carriers and sixteen years for private corporations. My full details are available @ https://www.linkedin.com/in/dennisewilmot

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