Changes in Freight May Upend How America Moves Its Stuff

A chronic logjam in a freight yard in Central Illinois has led Norfolk Southern Corp. to rethink how it moves freight, and the change will call on manufacturers to get products to the shipyard or get left behind.
Freight railroads have operated in the same way for more than a century: They wait for cargo, then leave when customers are ready. Now railroads want to run more like commercial airlines, where departure times are set. Factories, farms, mines or mills need to be ready or miss their trips.
Called “precision-scheduled railroading,” or PSR, this new concept is cascading through the industry. Under pressure from Wall Street to improve performance, Norfolk Southern and other large U.S. freight carriers, including Union Pacific Corp. and Kansas City Southern, are trying to revamp their networks to use fewer trains and hold them to tighter schedules.
The new approach was pioneered by the late railroad executive Hunter Harrison, who engineered turnarounds at two major Canadian railroads and Florida-based CSX Corp., by radically revamping their logistics. His template won over Wall Street but caused chaos on the tracks.
CSX spokesman defended the changes by pointing to results. He said CSX trains are running faster and with less downtime, and the railroad is hauling more cargo with fewer locomotives, railcars and employees.
Norfolk Southern estimates that its own plan will cut about 3,000 employees from its current workforce of about 26,000 and shed 500 locomotives from its fleet of about 4,100.
Ideally, the end result would be a more fluid railroad network that operates much like a moving conveyor belt, with fewer jams. It would allow shippers and customers to ship finished goods on a just-in-time basis, reducing carrying costs across the board.
Source: Wall Street Journal