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How Being a Stock Watcher Puts Money in Your Railroad's Till

The first reason is so railroad investors can see what to look for and how to measure their performance vis a vis the broader market. Second is so railroad managers can compare their own results with those of the public companies. Third - and less obvious - is to give railroad marketers the tools to delve into customers' financials to ferret out trends.

All too often the first indication of customer trouble is a fall-off in carloadings or an increase in demurrage billing as cars sit longer than usual. Yet following the 10-Ks and 10-Qs can help flag problem areas and give you a chance to take pre-emptive action before they smack you up-side the head. For example, a food processor traded on the NYSE - and which lags the industry in many key measurements -- is going through a major restructuring, has a new Processes VP, is shedding certain product lines and is adding others, principally non-US.

The changes have been brewing for a year and have been duly reported in the SEC reports. The savvy railroad marketer who has this account should have seen the handwriting on the wall. As noted above in the grain processing article, there are changes afoot which can affect everything from fertilizer loading to grain car supply. The information is all there in an S&P stock or industry report, accessible from any number of sources.

It's a simple matter to set up phantom portfolios of customer stocks on AOL, Yahoo, or your own brokerage site. Set prices at the Jan 1 numbers, shares to amount to $1000 or so in each company, and track YTD changes. Some servers - Yahoo is particularly good at this - also flag daily news items by ticker so you can track why certain things are happening. Then the next time you visit the customer you can ask about the reorganization, increase/decrease in earnings, shifts in product line-up, etc. and talk in terms of what you can to support the desired ends.

Does this approach work? Dan McShane, former shortline manager at UNP and now head of a group of Midwestern shortlines, writes, "As an old marketing and sales guy I found your letter this week particularly insightful. One commandment that every new marketing person must learn is, to determine what the CUSTOMER NEEDS and develop products and services at competitive prices that satisfy those needs, BEFORE your competition does. A great way to do that is to look at company press releases about product development, 10 K's and 10 Q's, trade magazines, etc.

"For years railroad sales and marketing people have been going around to customers offering the products and services that they [already] had. This strategy leaves customers the choice of doing business 'the rail way or no way.' Since those products and services are meeting customers needs less and less, we are selling price in order to maintain market share. We all know what the result of selling price has been: reduced yields per carload, and the railroad becoming more and more a hauler of low value bulk commodities. I hope not only the short lines, but more importantly, the class 1s are listening."

In other words, what you're selling today may not meet the custoemr's needs tomorrow. And often the best mirror of the company is the company itself.

--Roy Blanchard

THE BLANCHARD COMPANY
2041 Christian Street - Philadelphia PA 19146-1338
Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, 215-985-1445, lblanchard@rblanchard.com