Western Railroad Discussion > How are UP's PSR Efforts going ?

Just Wondering - TIA

talked to a UP conductor this morning at work and he says things are slowing down on his extraboard covering the Iowa grain lines.
JC

Posted from Android

OMAHA, Neb. — The first phase of Union Pacific’s shift to an operating plan based on the principles of Precision Scheduled Railroading appears to be going smoothly.

Federal regulators have not received shipper complaints about service and are satisfied that the railroad is keeping its customers informed as it methodically rolls out operational changes on its Mid-America Corridor linking the Midwest and the U.S. Gulf Coast.

Kansas City Southern officials say they’ve experienced no disruption related to UP’s new operating plan. KCS’s cross-border network relies on UP trackage rights for much of its route across South Texas, and UP is a major interchange partner at the Laredo gateway, the busiest U.S.-Mexico border crossing.

And Union Pacific executives say they are confident the changes, which began Oct. 1, are bearing fruit on routes that handle half of the railroad’s traffic.

“We’re feeling really good about the early traction of our Unified Plan 2020,” Chief Financial Officer Rob Knight told an investor conference on Wednesday.

UP’s key operating metrics — including terminal dwell, average train speed, and the number of cars online — are all moving in the right direction, Knight says.

The operational improvements come as UP is handling more traffic. As of last week, UP’s fourth-quarter volume was up 2 percent compared to a year ago thanks to gains in intermodal and industrial products volume.

UP is implementing operational changes gradually and in four regional phases. UP has turned to planning the second phase, on the Sunset Route linking Southern California and Texas, earlier than expected, Knight says.

The railroad has not yet said when it will begin making operational changes on the Sunset Route.

Thus far it’s clear that UP’s approach — which independent analyst Anthony B. Hatch has dubbed PSR 2.0 — is far different than the way the late E. Hunter Harrison brought change to three Class I railroads.

“So far, PSR has only been implemented in a revolutionary, go-for-broke manner,” Hatch says.

Harrison, who wrote the book on Precision Scheduled Railroading, implemented his operating model more rapidly at each of the railroads he led: Canadian National, Canadian Pacific, and CSX Transportation.

The operational changes created months of service problems, generated shipper complaints, and attracted increased scrutiny from federal regulators. Eventually, each railroad became more reliable — but not before alienating everyone but shareholders, Hatch says.

Hatch says it remains to be seen if UP’s more measured approach can produce the same financial results as the Harrison-led transformations, which also involved broad changes involving everything from labor agreements and freight rates to the engineering and mechanical departments.

This week, UP notified customers of several changes designed to improve the utilization of locomotives, cars, and crews.

Unit train customers will be required to provide UP with a 30-day rolling forecast and a 72-hour pre-release notification, and will face penalties if the train release date or destination is changed or if the unit train is canceled less than 48 hours prior to the scheduled release date.

Unit train customers also will have 24 hours to load or unload a unit train for free. After 24 hours, UP will impose a $200 hourly fee for each locomotive on the train. UP will impose hourly fees for unit trains that are halted en route at customer request.

UP also will raise its daily fee, to $140 from $100, to store cars in its yards.

The changes are scheduled to take effect on Jan. 1.

Posted from Android

The 30 day load forecast is interesting. Similar to how wholesale electric customers have to operate.

Faster loading and unloading should increase velocity.

Posted from Android

Apparently, the "all is going well" is from UP.  No word from customers yet.  Just wait a couple of months and we'll all have better information.

frankie87 Wrote:
-------------------------------------------------------
> The operational changes created months of service
> problems, generated shipper complaints, and
> attracted increased scrutiny from federal
> regulators. Eventually, each railroad became more
> reliable — but not before alienating everyone
> but shareholders, Hatch says.
>
> Hatch says it remains to be seen if UP’s more
> measured approach can produce the same financial
> results as the Harrison-led transformations, which
> also involved broad changes involving everything
> from labor agreements and freight rates to the
> engineering and mechanical departments.
>
> This week, UP notified customers of several
> changes designed to improve the utilization of
> locomotives, cars, and crews.
>
> Unit train customers will be required to provide
> UP with a 30-day rolling forecast and a 72-hour
> pre-release notification, and will face penalties
> if the train release date or destination is
> changed or if the unit train is canceled less than
> 48 hours prior to the scheduled release date.
>
> Unit train customers also will have 24 hours to
> load or unload a unit train for free. After 24
> hours, UP will impose a $200 hourly fee for each
> locomotive on the train. UP will impose hourly
> fees for unit trains that are halted en route at
> customer request.
>
> UP also will raise its daily fee, to $140 from
> $100, to store cars in its yards.

You hear about this so much - how customers play the "car release game" and "demurrage game" to try to get out of paying the railroad to hold on to their cars until they are ready to receive them, or to get the railroad to move them within their facilities (interplant switch) with out a charge, or to release the cars as though they were ready for pickup (so the clock will stop on their loading or unloading times), even though the cars are not ready for pick up, are a few examples.  So Hunter Harrison swoops in and cracks down hard on these games and pisses the customers off.

Initially, and in it's simplest form, there seems to be good reason behind what EHH is doing.  However, what's left out of this issue is the fact that the railroads are notoriously unreliable and erratic with their service.  Customers don't know when their cars are going to show up, so they order extra inventory so that they can supply their business, but then attempt to use the railroad as their inventory storage, without paying the fees for this.  For all of EHH's hype of "Precision Railroading", there is nothing precision about it and creates havoc for the railroad's customers.  There would probably be a lot less of this game being played if the railroads did their part and provided the transportation service that they promised.

spwolfmtn Wrote:
(SNIP)
> There would probably be a
> lot less of this game being played if the
> railroads did their part and provided the
> transportation service that they promised.

Amen!

If Union Pacific doesn't cut switching, and introduce 28 hour days, and close humps, they may have a shot at Precision, SCHEDULED, Railroading

Posted from Android

So far, the Sunset Route in Arizona has been busier than normal for this time of year.  Trains are a bit different.  Like this one: IDICAX-16 (Intermodal-Dallas Intermodal-Calipatria, CA-Extra)

SouthWest RailCams
CA, NM, CO, TX, AZ
https://SouthWestRailCams.com

>Thus far it’s clear that UP’s approach — which independent analyst Anthony B. Hatch has dubbed PSR 2.0 — is far different than the way the late E. Hunter Harrison brought change to three Class I railroads. 

“So far, PSR has only been implemented in a revolutionary, go-for-broke manner,” Hatch says. 

Harrison, who wrote the book on Precision Scheduled Railroading, implemented his operating model more rapidly at each of the railroads he led: Canadian National, Canadian Pacific, and CSX Transportation. 

The operational changes created months of service problems, generated shipper complaints, and attracted increased scrutiny from federal regulators. Eventually, each railroad became more reliable — but not before alienating everyone but shareholders, Hatch says. 

Hatch says it remains to be seen if UP’s more measured approach can produce the same financial results as the Harrison-led transformations, which also involved broad changes involving everything from labor agreements and freight rates to the engineering and mechanical departments. 

I think this is the most important point, UP seems to be making their changes slowly, and are trying to avoid causing disruptions like what happened at CSX. Seems like the right way to do this, they at least seem aware that angering your customers is a bad idea. I'm surprised, but maybe UP has actually learned from its countless meltdowns over the years.

RailFanAZ Wrote:
-------------------------------------------------------
> So far, the Sunset Route in Arizona has been
> busier than normal for this time of year.  Trains
> are a bit different.  Like this one: IDICAX-16
> (Intermodal-Dallas Intermodal-Calipatria,
> CA-Extra)

During my recent quick visit to SoCal, I was surprised to see a good string of marine containers in front of a long westbound stack train on the Sunset Route, with the usual Z-train type UPS trailers and 53' boxes towards the back. It's the first time I've seen such a mix on a train that has UPS trailers.

The usual westbound Sunday parade of manifests came into West Colton about 3 hours later than I'm used to (behind the Robertson Rock Train instead of ahead of it), although that could have been the result of slow orders near Niland for that "mud geyser."

I'm not sure if this cost-cutting practice and "PRS" are the same deal, since PRS is supposed to be "in the process of being implemented" on the North/South routes in the Midwest. Yog-Sothoth's comments above seem reasonable, that Omaha might have learned from their past mistakes and might be exercising moderation in changing their way of doing business.

My opinion hasn't changed regarding the suspicious stock price jump after the PRS "announcement" more than a month ago. THAT had nothing do with railroading.