Wednesday, 26 December 2012

Lessons from the past...yes, there are some

As I've mentioned before, this blog is not about remembering the 'good old days' - it's about pitting new and proven ideas against the entrenched ideologies of Australia's current rail executives and their industry. Still, having said that, there are some examples of rail operation dating back to the 1930s - now largely lost in the modern Australian rail freight sector - that if implemented could reduce costs, increase capacity and do so at virtually zero charge.

Let's start at the beginning. In the early 1920s, a mid-sized mid-western railroad in the United States found itself with a simple route structure, a low operating cost model and plenty of much larger competitors unable to match its service reliability. This was the New York, Chicago & St Louis Railroad - more commonly known as the Nickel Plate Road (NKP). With literally a fraction of the assets (about one ninth), the NKP was able to move 33-percent of the tonnage its largest competitor could. With almost no branchlines and very little double track, the NKP's sole focus was getting freight from its western terminals to its eastern terminals in the least amount of time. It knew what it was good at, and it stuck at it. It's busiest single track mainlines received centralised traffic control that could handle up to ninety trains a day when pressed. Rather than running long drag freights weighing over 10,000-tons, it focused on several mid-sized 4,000-ton trains leaving its terminals throughout the day - providing multiple alternatives for shippers - and powered each train at about 1hp/ton. The NKP also did its best to run all of its trains at similar speeds, to keep traffic flows fluid. And in an era when steam locomotives might travel just 100-miles a day, the NKP could service its modern fleet in fifteen minutes and haul the same tonnages with 300 locomotives that took nearly 1,000 on neighbouring railroads. And this was all happening by the mid-thirties. Fast forward to the 1990s and the great US rail renaissance relied on many of these techniques to coax time sensitive intermodal traffic off the freeways. However there was one other aspect of these operations that few US rail executives chose to replicate until the last decade. It was the NKP senior management's hyper vigilance of on-time arrivals for its most important freight services. Throughout the 1940s and 1950s, the first thing the NKP's CEO read every morning was the arrival reports for each terminal - if there was an issue causing repeated late arrivals, it was dealt with quickly - and from the top.

Delays are an everyday distraction for rail operators the world over, however containing them, and avoiding them is something largely lapsed in Australian intermodal operations. If the CEOs of Pacific National and Aurizon read the daily reports for terminal arrival times there's not a lot of evidence they do much about delays. A train that fails between Melbourne and Sydney might spend 24-hours awaiting rescue. If trains run endlessly late due to an infrastructure provider's assets, they might do so for months without any apparent direct attention from senior management. Frankly, its not good enough. For some seventy years the NKP has equipped the rail industry with a model for providing the fastest and most efficient means of delivering rail freight - yet in Australia it is a model consigned to the history books. Well, PN and Aurizon, its time to dust off those books. If the NKP could achieve the shareholder returns it did with a fraction of the technology now available, what should PN and Aurizon investors be expecting in return? If you want to know more, then call me...I actually own the book.

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