Railway Age, July 1995

Time to shed your ice cream shoes

First of all, ice cream shoes is a metaphor.

It's the invention of Central Railroad of Indiana engineman Darwin "Dead-Eye" Fisher. Eyeing his new general manager's tassel loafers dubiously the man's first day on the job, he remarked, "You're not going to try to run this railroad wearing those ice cream shoes, are you?"

Of course, Dead-Eye is dead right. While there certainly are occasions when ice-cream shoes are appropriate, the short line manager who spends too much time in tassel loafers and not enough time in his FRA-approved steel-toed shoes with a definite heel is going to miss a lot of chances to improve service and build business. Here's what I mean:

When you've got your ice cream shoes on, you can't go out and ride with a crew as they switch a customer. You can't see where, for example, the rails in the driveway have become so spread over the years that rim-ride has worn a groove in the ball of the rail and the only thing that's keeping things on the rack is the guard rail. I discovered exactly that the other week and turned it into a productive sales call -- I sought out the plant manager and asked him to walk the track with the conductor and me. We watched as the train pulled through the wide spot. The plant manager had a crew out in a matter of days to rebuild the crossing. While we were at it, we explored reopening a different siding that had been out of service for some time to facilitate internal flows of commodity.

You certainly don't want to go railroading at night in your ice-cream shoes, either: besides the safety risks, there's no telling what glop you could step in. With your Approved Shoes, on the other hand, you can go out and ride with the midnight crew and get a first-hand look at the kinds of problems that plague their worknight, things like customer guards not opening gates promptly or cars out of place because the car-movers moved cars without telling the yard office. When the railroad's general manager bears personal witness to the plant manager, these problems get the attention they deserve. You also get an opening for contact with your customer, which may lead to even more efficiencies or possibly even new freight.

And what about when you're not getting new freight? What if, instead, you're losing it? Take the case of the lumber yard, candy maker, or plastic injection molder whose inbound lumber, corn sweeteners, or resins show a drop in carload volumes. This is a two-pairs-of-shoes problem. They're still in business, so they're still using product. Where's it coming from? Could be a transload ten or a hundred miles away on another railroad. Whatever the reason, it means that some other vendor is providing a better product than the serving railroad. What can be done?

You can keep your ice cream shoes on to start finding the solution. First, determine the exact nature of the competition and why it's perceived as a better value. (In fact, you'll probably be better off wearing your ice-cream shoes here: your customer will be more apt to think of you as a management/marketing/finance professional).

Chances are the price is higher but the landed cost is less. We often miss this point and confuse price and cost: price isn't the determinant; cost is. John Sammon, Conrail's SVP-Core Group) hit the nail on the head when he spoke at the Cincinnati short line meeting in April: "Freight has and will move in the way that incurs the lowest cost."

So a shift to a transload terminal off the serving road doesn't necessarily mean somebody's out beating the short line's price. What it does mean is that the transload offers better value. It could be a function of inventory control: timely delivery, reducing days in transit, lowering storage costs, etc. If the serving railroad had the business once and then lost it, there has to be a reason.

Now it's time to take off those ice cream shoes and find out why. (Take your hard hat, too, and your safety glasses, while you're at it.) Going nose-to-nose with your customer in the yard shows you mean business and are in a position to help them make better use of their railroad asset, whether it's a one-spot siding or a fleet of 100 covered hoppers. Walk the area and see how the railroad process fits the customer's production process. It's the most effective way I know to gain new insights into how to increase business.

For example, we found a liquid sweetener user that used 4,000 gallons a week and could store 12,000 gallons. He was trucking it in 4,000 gallons at a time for $3,000 a truckload. Now, one railcar holds 16,000 gallons -- and we found that, by using the railroad asset more productively, our user could bring in one car every four weeks, pump off 4,000 gallons the first week and empty the rest into his tanks and release the empty for reloading. The car would be back at the end of four weeks to begin the cycle anew.

Because of the economies of rail, our user is now paying $9,000 for sweetener that used to cost him $12,000 -- in other words, he's getting every fourth truckload-equivalent for free.

As a matter of fact, that's how we sold it -- buy three, get one free. Of course logistics managers aren't accustomed to managing their businesses the way they manage their grocery shopping. Buy three, get one free isn't part of their office vocabulary. It's up to us as vendors to open new eyes.

This means that railroad managers have to look at their own shops with new eyes just as well (and just as often). Is the closest interchange the best one? Do I need two crews to do the job? Do I have to run every train daily? Are my rates high enough to cover car hire under deprescription? And so on. As NS's Jim McClellan reminded the short line folks in Cincinnati: " A very careful balancing act is required; trade-offs are made between customer service and financial returns."

Like anyone else on a short line, the general manager must wear many hats. Or many pairs of shoes. Ice-cream shoes and the management skills they represent will always be important -- but the best short line managers always have their well-broken-in Approved Shoes in their cars.

Return to:

Created December 6, 1995. Send comments to lblanchard@aol.com