As if competing with trucks on the basis of price isn't hard enough, short lines have to cope with a cumbersome system of rate making and coordination with more than one railroad. How well we beat the system to get back to the shipper with rate quotations and how well we coordinate the car movement will make or break us when we're trying to sell a new customer.
Here's one little horror tale, drawn from my personal expe- rience working with one of my client short lines, to show just how wrong one new test move can go. The names have been changed to protect the guilty.
Friday, March 8. Revenue requirements are agreed upon by Alpha, the two intermediate Class Is (Beta and Delta) and the destination line (Omega). Omega tentatively agrees to a requirement of $600 for its 200-mile move. Initial rate relayed to the processor's traffic manager.
Monday, March 11. Omega calls to raise require- ment to a firm $788. By this time the processor has reduced the move to one car, thanks to the slow response to the rate request and a perceived car supply limitation. New rate still marginally cheaper than truck, and would we please let them know when the car would be placed for loading. Alpha orders a car through normal channels.
Tuesday, March 12. Beta locates a suitable car (ABCD 12723) about three hundred miles away and advises Alpha it will be delivered to the interchange the morning of Friday, March 15, making it available for loading the same day. Alpha advises the processor.
Thursday, March 14. Alpha calls Beta to check on car's progress. Advised the car missed a connection, so won't be at the interchange until Monday, March 18. Alpha advises the processor.
Monday, March 18. Alpha receives ABCD 12723 at interchange and delivers it to shipper at 1:25 p.m. for loading.
Time passed since original rate request: 11 days
Tuesday, March 19. Shipper faxes release to Alpha on night shift.
Wednesday, March 20. Alpha interchanges car to Beta at 12:40 p.m. Meanwhile, a derailment causes Beta Train PQXR 1234 not to run. As a result, the car misses its intended connec- tion.
Thursday, March 21 (early morning). Beta moves the car from the interchange halfway to the yard some time before dawn. That afternoon, its intended connection runs late, and Beta decides to kill the job. Crew taxis back to home base, leaving locomotives behind. ABCD 12723 stands still.
Friday, March 22. Crew taxis back, completes local work assignment, and returns to yard with ABCD 12723.
By now the processor is gravely concerned, so Alpha tells Beta yardmaster and stations department that expediting the car for- ward to Delta interchange is essential.
Saturday, March 23. ABCD 12723 interchanged with Delta approximately 8:00 p.m. The car is still 1,000 miles away from its destination.
The Moral of the Story: Interchange with Delta occurred...
The rail rate may be marginally better, but the added cost of delays and unknowns puts the railroads' ability to compete in serious jeopardy.
Clearly, something needs to be done. The short line/class I relationship can be profitable for both parties, since each does something well that the other can't do effectively.
The short line can make use of its economies of operation -- smaller crews, system tolerance of slower speed and other subop- timal operating conditions -- to transform a series of onesies/twosies from several shippers into one move from the class I. The class I then does what it does best by moving large numbers of cars long distances at higher speeds.
But unless both parties find ways to make the system work for them, the class I gets a black eye and the short line loses the business.
The class I/short line relationship is unique. Some times the class I is a vendor, as in the case where a move can come or go over one or more competing connections. Some times it's a customer, as in the case where you're trying to sell a particular price/service package.
But today, when the vendor's business and the customer's business are becoming inextricably intertwined all across indus- try, both parties have a responsibility to make sure that re- quirements are met and expectations exceeded.