Panel Discusses Pros, Cons of PSR

The precision scheduled railroad operating model might seem to be the same at all railroads that use it, but panelists said during the Midwest Virtual Rail Conference that there are differences from railroad to railroad in how the model is practiced and the consequences for shippers.

Panelists said some shippers have benefited greatly by the use of PSR by Class 1 railroads, but others have suffered.

In some instances it is not the model itself that caused that but the lack of adequate personnel that railroads have to support their operations.

That latter point was emphasized by Dan Sabin, president of short line Iowa Northern.

His the 253-mile railroad interchanges with three Class 1s practicing PSR, Canadian National, Canadian Pacific and Union Pacific.

When the late E. Hunter Harrison implemented PSR at CN and CP, a byproduct was staff cuts that resulted in the loss of institutional knowledge by experienced local operating personnel.

Those positions were either eliminated or replaced with inexperienced people who have proven difficult to work with.

Sabin said CP has a responsible marketing team, but its interchange service is unreliable. As a result, some of his customers refuse to route freight via CP.

CN personnel, Sabin said, have a condescending attitude that reflects a lack of understanding of the benefits of traffic growth that can come from working closely with short line railroads.

Of the three Class 1s that Iowa Northern works with, Sabin said Union Pacific is the best.

He said UP kept experienced local operating people in place while reducing bureaucracy at its headquarters.

It has focused on Iowa Northern’s role of providing first- and last-mile service, has communicated well, has assigned a liaison who can get through any department at headquarters within a day, and has been open to suggestions Iowa Northern has made.

“They adopted a lot of their operations to fit what our customers needed and showed an incredible amount of appreciation for what we are doing with them. They are making changes quickly to identify and rectify service issues,” Sabin said.

Tyler Dick, a lecturer and principal research engineer at the Railtec program at the University of Illinois at Urbana-Champaign, said Harrison sought to combine elements of two opposing strategies in railroading.

One approach, known as hold-for-tonnage, is to hold onto freight cars in yards until enough of them have accumulated to operate one train.

The other approach, known a schedule adherence, seeks to use shorter trains to provide more frequent service with shorter transit times.

In Harrison’s vision, PSR sought to provide consistent, frequent service to reduce terminal dwell and transit time but doing so with long trains and reduced rolling stock requirements to minimize costs.

Hence PSR practitioners seek to operate general-purpose trains instead of dedicated single-commodity trains.

PSR also has changed the way local service is provided. Rather than use multiple crews on the same shift, railroads are using one crew per shift that shares motive power.

This might be a more efficient use of assets but it comes at the cost of service flexibility.

Dick said PSR also did away with the practice of locals gathering traffic, taking it to a yard and then sending it to a hump yard for classification into blocks organized by destination.

Under PSR, there is more emphasis on pre-blocking outbound traffic at origin or local yards.

That has meant less need for sorting with hump yards, which in turn can be converted to flat-switching in order to reduce costs.

In short, Dick said PSR simplified traffic flows and switching requirements while maximizing train size and minimizing dwell time.

Yet he said PSR is not one thing but a collection of actions that change operating practices and culture.

Peter Swan, an associate professor of logistics and operations management at Penn State Harrisburg, said PSR has resulted in more efficient railroads that use less equipment and have reduced the variability in transit times by reducing the use of hump yards.

That has benefited some shippers and been useful to the railroads during the COVID-19 pandemic-related changes in freight traffic.

On the other hand, Swan said, other shippers are in worse condition because they’ve seen their transit times get longer and they now need a larger car fleet to compensate for that.

That has particularly been the case, he said, with freight originating on light-density lines that have seen reduced service frequency.

Swan cited the case of an unidentified short line that used to receive 50 cars three times a week from a Class 1 connection. Now it receives 150 cars once a week.

He noted that short lines fortunate enough to have their interchange located in close proximity to a busy Class 1 terminal might see five day a week interchange on a reliable schedule.

PSR has also resulted in Class 1 railroads forcing demurrage and accessorial charges onto shippers. Railroads used to bear those costs.

“Normally in a service business you try to provide some service the customer wants,” Swan said.

“Under PSR the railroads provide a service and the customers can take it or leave it to a large extent.”

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