Railway Age, May 1992

How to Get First Class Service from Your Class I

"Stop demonizing your Class Is," we admonished our short line readers a few months ago.

A note in response from Conrail's Jim Hagen, commenting that "the philosophical underpinnings are exactly correct," provided the inspiration to explore Conrail's view of the Class I/feeder line partnership.

And so we arranged a time to talk at length with three Conrail staffers who help make the critical difference in the Conrail/short line partnership: Charlie Marshall, Senior Vice President of Development, Kelvin MacKavanagh, Director-Short Line Marketing, and Adam Bridges, a market manager in the forest products group. In a free-ranging discussion at a recent New Jersey Short Line Railroad Association meeting, Marshall shared some thoughts on the feeder line's key role in industrial development, MacKavanagh spoke on enhancing partnerships in general, and Bridges held forth on forest products. Their observations highlight what the Class I railroad in general, not just Conrail in particular, can offer a feeder line.

As Marshall pointed out, Conrail has positioned itself as a transportation wholesaler. This means, he says, that someone has to fill up the trains, and Conrail is increasingly looking to the feeder lines to do it.

Short Lines Key to Class I Growth

There are some clear and compelling reasons, according to Marshall, that much of Conrail's growth in the years to come will depend on its network of feeder lines.

For one thing, Conrail is literally running out of development space along its rights-of-way. There's precious little real estate left. The growth will come from new industrial sites located along the feeder lines.

Use Conrail as a "multi-list broker," Marshall suggests. Conrail's industrial development staff has a network of contacts throughout its entire system and has access to a potential customer base that far exceeds the reach of the average feeder line.

Bring Conrail into the industrial development partnership early, too. Conrail can help fine-tune the transportation service package that will win the business. (Conrail will protect your confidentiality, too. Because Marshall controls both industrial development and feeder line development, he is particularly sensitive to the interrelationships among the two.)

For another thing, the feeder lines are already making a significant contribution to Conrail's freight gains. On average, traffic on former lines sold to local carriers is up 40 percent over what it was under Conrail auspices.

Making Partnerships Work

Local presence is the driving force in increased freight revenues, and Conrail recognizes the importance of following the lead of its local partners. In fact, one of Conrail's short-term goals is setting up the wholesale systems -- from daily communication to timely billing -- that back up the retail activities of its short line network with first-class support. MacKavanagh's group takes the lead in making this happen.

Let's say, for example, that you have a customer on your line whose vendor bills him on the tenth day following shipment, but the car takes 15 days to get there. In essence, then, your customer is being billed five days before delivery. MacKavanagh's group can help you adjust the service package to satisfy the needs of this shipper.

This group can put short line managers in touch with the right players in marketing, operations, billing, customer service. Since management time is at a premium in short lines, where managers wear many hats, the time saved in negotiating the maze to get to the appropriate Conrail resources is invaluable.

Market Managers Meet Short Line Needs

Adam Bridges serves as an example of how market managers can help create win-win situations for both short line and the Class I.

Bridges' specialty -- lumber and paper products -- is a particularly strong candidate for transloads. Conrail has a commitment to keep carload business as carload business wherever possible. And that means not using a Conrail lumber or paper transload to stop carload traffic short of the short line, as so commonly happens with some other Class Is.

Transloads are geared to making rail customers out of customers not served by rail direct, Bridges observes. In Conrail's case, shippers are sometimes even steered toward transloads on feeder lines in preference to ones on Conrail's own tracks when the logistics make sense.

This is one example of Bridges' market-specific approach to the short line/Class I partnership. In addition, he brings a wealth of knowledge of the lumber and paper products industries to bear on the needs of his shippers, knowledge the short line can tap for their own customers' needs as well. Other example abound, both within Bridges' market niche, and with other market managers at Conrail.

Receptive to Change

Like any other Class I, Conrail has managers who resist change as well as managers who embrace it. According to Marshall, though, the short line that does its homework and can demonstrate the benefits any proposed change offers Conrail as well as the feeder line will find a receptive ear.

Conrail's mission is to provide the best transportation product for the customer's needs and protect the stockholders' interest in this process. The feeder line plays a vital role in this mission. Other Class Is have other Charlie Marshalls, Kel MacKavanaghs and Adam Bridges, receptive to innovative proposals to help strengthen the Class I/short line partnership.

Class I lines offer a varied menu of services to their feeder line partners. To get first class service, in many cases, all you have to do is ask.

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Created July 31, 1995. Send comments to lblanchard@aol.com