Railway Age: Short Line and Regional Marketing Advocate
December 1999


RAILROAD.COM

sed to be you could call 20 truckers and get 20 rates in not much more than 20 minutes. Fast-forward and that 20 minutes is about to be compressed into 20 seconds as shippers log on to an internet-based rate clearing house and post their transport needs.

Picture this listing: "Wanted to ship 500 pallets of wooden widgets, total weight 500 tons, Baltimore to Seattle, need delivery guaranteed no later than Jan 15, willing to negotiate rate-service package." The buyer gets to sit back and wait for offers to come to him. No need to play phone-tag with vendors or wait for quotes to come back. The first satisfactory bid on the screen wins.


You can
buy and sell stocks,
books, and plane
tickets on line.
Why not rail freight
transportation?

To be equal opportunity competitors, the rails absolutely must offer dot-com solutions. As noted railroad financial analyst Tony Hatch points out, "The rail economic advantage in the variables of cost, distance, bulk, weight, etc. will not go away in a electronic world. First and foremost the service issue must be addressed." And step one is making it easier to buy rail service.

The railroad website that best meets that goal is Canadian Nationalís. At www.cn.ca you can do all the usual things Ė order cars, initiate a waybill, trace a shipment, and so forth. However CN offers one important addition. You can request a price quote for a specific commodity to move between specific points.

The CN website is also the only class 1 railroad site offering links to shortline profiles, meaning that e-customers can use CN connections with the shortlines to do everything they can with CN. And thatís most encouraging. One of the most frequently voiced shortline concerns is being frozen out of the e-commerce network, but CN address this head-on.

The sense Iím getting from CSX, for example, is that routings involving shortline partners will be included in the e-commerce net. Thereís no reason they shouldnít be, either. Weíre long past the time when you had to negotiate divisions of everything and there were always nine ways to route anything. The time is coming when a buyer can post a requirement on the net and have all suppliers bid on it. You can buy and sell stocks, books, and plane tickets on line. Why not rail freight transportation?

Some would argue that reducing transportation pricing to a web-based auction makes the business of moving goods from here to there a commodity in and of itself. Well, maybe it is and itís time we railroaders recognized that. The internetís strength is in letting you simplify where you can yet preserves the opportunity for dialog where you need to be creative. And as every Marketing 101 student knows, itís the value added by the seller in the eyes of the buyer that moves commodities.

And you, Mr. Shortliner, are in this game to add the value. Value in terms of access and responsiveness. Finding a new customer costs you six times what it does to keep an existing one, so itís paramount to keep the current crop surprised and delighted with the value you bring to the table. Moreover, in spite of your best efforts, your customer base is going to change over time. Thatís why you have to be easy to find and easy to understand and easy to do business with. The web helps you do all this and more.

Becoming e-business proficient is not all that difficult, but it does takes time and focus. The first step is to figure out how to replace the repetitive phone and e-mail transactions with an interactive, secure website. Second, you need applications that are flexible and expandable. Third, you need to be able to leverage what you learn in doing business over the Internet to expand service offerings and grow the franchise.

There is a lot of help available, too. Check out some of the major truck sites, like www.yellowfreight.com. Go behind the scenes of the class 1 sites. See how e-Bay and Amazon.com do it. And for help in how to do it and why, the e-business section at www.ibm.com is unequaled.

Several shortlines are well up the learning curve, and one of the best is the I&M Rail Link in Davenport, Iowa. At www.imrail.com theyíve put up an intuitive, informative, easy-to-use site that tells the viewer who I&M is and what it does. It tells you the operating schedules between major points, and even provides some rate information. The important thing is that Dennis Anderson and his team have thought about what shippers need and made it accessible. Best of all, thereís room to expand.

To sum up, www.shortline.com is no longer an option. Itís a matter of staying in business or joining the fallen flags. As Alice Saylor of the American Short Line and Regional Railroad Association told me, "The short line and regional railroads must be part of the e-commerce process to survive. After all, this is just one more way small railroads can maximize their traditional user-friendliness."


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