You can't amputate your way to better health

Dear Railroad CEO:

I recently received a report from Morgan Stanley, some of the best money guys on Wall Street. It was an overview of internet strategies by railroad companies. It made for very interesting reading.

One part of the report covered what your customers expect from you. I am afraid that, on a scale of one to ten, your industry did not make a passing grade.

In the Morgan Stanley report, BNSF customers rated the carrier a 5.4 out of 10 on their e-commerce service. CN/IC got a 5.6, Canadian Pacific 5.2, CSX scored 5.3, KCS 4.6, NS 4.7 and UP 5.3.

All of these scores rank far below your trucking competitors. It seems as if your customers like what they get from the truck lines a lot better than what they get from you. It appears that each railroad is very proud of their individual system. They resist efforts to have a common system throughout the industry. Heaven forbid that your competitor, another railroad, may gain a little information. Someone better bring in the coffee to wake you up, because your competition is not another railroad, it is e-commerce-friendly truck companies.

In today's competitive world, you are getting about 10% of the freight transportation dollar. Roll over with your big executive chair and look out the nearest window and count the trucks that go by. You better bring a calculator because your fingers and toes will not do it. The shippers know that not only can the trucking company quote a rate, they can also promise delivery. Not only that, the shipper can find exactly where his shipment is at any given time. You see, he designs an e-commerce system that is customer friendly. You designed a computer system to cut off clerks. At the rate you guys resist new ideas and cut costs, there soon won't be any industry left.

I am aware that some of you are attempting to build consumer-friendly websites. Customers will be able to make inquires through this site. Even so, they will not be able to get either a price or a definite commitment of when their freight will be delivered.

While the rest of the world is using space-based global positioning satellites, we are stuck with old trackside boxcar scanners. These scanners are not much better for communications than two tin cans and string. When you finally decide to use the GPS method, your customers can find out just exactly, within a few feet, where their shipment is, how fast it is moving and exactly when it is expected to get there. Heck, most of your trains are wandering around North America hauling a bunch of no bills, causing higher fuel consumption and higher costs and the darn cars end up in the wrong place. But look at the cost savings that you've made from the clerks that you have cut off.

Do you really think that your customers are going to stay with you when they can't find out where their shipments and equipment are? The reason that they can't find out is because you don't know yourself. Most customers would ship with you if you could just get the shipment there consistently. It would be better if you just told the truth about what you can't do, so that the customers can make their plans, rather than counting on you to give them inaccurate information. That just makes them angry.

We have always hoped that you treat your customers better than you treat us. The difference between them and us is that we stick with you and they don't. We are ready to help move this industry into the 21st century. We are ready to help do what the Wall Street money people tell us needs to be done. You must do what we have done and come to the realization that this industry is going to be saved, and this industry's bottom line will increase only when the top line increases, not simply through cost cutting. You cannot amputate yourself to health. You must grow.

James M. Brunkenhoefer (L-83)
304 Pensylvania Avenue SE
Washington, DC 20003
Voice (202) 543-7714
Fax (202) 543-0015
E-Mail: UTUNLD@aol.com

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