Western Railroad Discussion > KCS hires exCN Exec to implement Precision Scheduled Railroading

From the KCS 2018 4th Quarter investor conference call,

Presentation Slide -
"Throughout 2019, KCS will be focused on implementing the PSR principles
that are most relevant to our network."

Jeff Songer, EVP and Chief Operation Officer -
"To assist in this process, we have entered into a consulting agreement with Sameh Fahmy.
Mr Fahmy is a former Canadian National executive with 27 years of experience at CN.
Twelve of those years spent working as part of Hunter Harrison's executive management team."

"Initial areas of focus include improved labour and asset utilization,
train start rationalization and fueling efficiency, among several others."

"Providing some real life examples of recent initiatives.
We have re-designed our intermodal and manifest product between Kansas City and St. Louis,
and have reduced eight train starts per week in this segment.
Initial rationalization of our Mexico network has provided an additional 28 train start per week reduction.
Combined, these two initiatives will save over $2 million per year in labour cost alone,
in addition to locomotive, fuel and equipment savings"

"PSR initiatives will allow us to reduce the overall locomotive fleet.
While we have not identified a total number for reduction at this time,
as compared to the peak number of active locomotives in 2018,
we have returned 25 leased units, and are in process of storing an additional 20 units.
Acquisition of the fifty new units is in line
with another of our PSR initiatives of reducing locomotive failures."

KCS also announced the arrival
of the first of 50 new "high horsepower" locomotives late in January.
Thirty-three "lower horsepower" locomotives are to be sold as part of the transaction.

Pat Ottensmeyer, President and CEO -
"it's important to point out and realize the recent management change at Union Pacific,
which is our largest interchange partner, particularly at the border.
Jim Vena, and Sameh, worked together, side by side,
on the same executive team for a dozen years or more.
So, I think, the level of coordination and communication that we'll have with UP
as they continue to implement their own version of PSR will be enhanced."

"Sameh will be with us ....   for two years."
"The incentive structure that we've put together has a two year measurement period on it."
"He will not be full-time."

Mr. Songer gave an analyst a list of anticipated changes from PSR -
"train start rationalization"
"simplifying networks, total train starts"
"right-sizing equipment, taking some excess equipment off the system"
"right-sizing locomotive fleet"
"consistency is what we need to achieve most"
"from a Union Pacific perspective, with PSR, to streamline and efficiencies through Houston"


According to Sameh Fahmy's Linkedin profile,
he was CN's Senior VP Engineering, Mechanical and Supply Management,
from 1994 to 2013.
He later worked for GE from 2013 to 2016, to advise on Sales.
He has most recently worked as a Management Consultant to CSX
from July 2017.

https://ca.linkedin.com/in/sameh-fahmy-59510a121
 



Edited 5 time(s). Last edit at 01/18/19 14:11 by Marcus.

Aw crap, another one.

Kiss KCS goodbye. A clone of that jerk EHH.  If anything and if anyone came to me saying they worked for EHH, id tell them to go pound sand, simply put with a few other choice words. 

Michael Fair
Royal Oak, MI

Just so BNSantaFe doesn't do this PSR crap!

Randy Lundgren
Elgin, TC

And to boot, they have record revenue in 2018.  So why the heck go PSR.

Yeah, goodbye KCS.  They have run off business left and right along the Meridian to Shreveport mainline as quickly as possible.  The new Continental Tire Plant being built near Clinton, Mississippi will be the largest tire plant in North America.  The KCS Shreveport to Meridian mainline runs along the southern border of the plant property.  You would think that KCS would be serving the plant.  According to recent information and a check of the plant construction, they are not.  The plant will apparently be served solely by trucks.  The new motto seems to be "If we have to switch it, we don't want it."  PSR does not promote customer service and revenue growth through increased business, despite what the "experts" may claim.  Regardless of what you do or don't believe, the long term results will likely push the railroads back into regulation due to poor customer service or, in some cases, a refusal by the railrioads to serve new customers.  I guess that with PSR, KCS will only run 2 trains daily between Shreveport and Meridian instead of 4.  MidSouth Rail ran 4 daily, and they went after every dollar of revenue that was out there.  I was optimistic about the future of KCS when Mr. Haverty was in charge.  Now, I just hope they are absorbed by another Class 1 before their lines are turned over to WATCO because running trains is just too much trouble.  It was nice while it lasted.  

"Because running trains is just too much trouble." Had a general manager of a railroad tell me one day that this place would be a lot easier to manage if we didn't run any trains. That's the mentality these days.

     Still makes me always wonder how they can hire someone to come in and tell them how to run their own business and still hold their jobs if they were apparently this stupid. Didn't these managers know anything? Irregardless if it works or not, they pay someone a lot of money to tell them how to do their jobs.
     Apparently the entire bunch should be fired including the incoming consultant. Get some farm kids in there, they are already pretty sharp. Gee, ask the employees for their thoughts too, that would be a unique idea.

texchief1 Wrote:
-------------------------------------------------------
> Just so BNSantaFe doesn't do this PSR crap!
>
> Randy Lundgren
> Elgin, TC

As more and more railroads adopt this practice, and it proves to be successful from a financial standpoint, it's only a matter of time before BNSF leadership begins to be urged to follow suit. . .

Marcus Wrote:
----------------------------------------
> Mr. Songer gave an analyst a list of anticipated
> changes from PSR -
> "train start rationalization"
> "simplifying networks, total train starts"
> "right-sizing equipment, taking some excess
> equipment off the system"
> "right-sizing locomotive fleet"
> "consistency is what we need to achieve most"
> "from a Union Pacific perspective, with PSR, to
> streamline and efficiencies through Houston"
>

If a “consultant/PSR expert” has to be brought in to examine these issues, one wonders what KCS managers have been doing, if anything. These things are all items that rail management, regardless of philosophy, should be examining on a daily basis.
BSB

Posted from iPhone

BigSkyBlue Wrote:
-------------------------------------------------------

>(SNIP)
>
> If a “consultant/PSR expert” has to be brought
> in to examine these issues, one wonders what KCS
> managers have been doing, if anything. These
> things are all items that rail management,
> regardless of philosophy, should be examining on a
> daily basis.
> BSB
>
> Posted from iPhone

You'd think they should, but it doesn't usually happen that way. 

Having an outsider come in and look around often reveals ways a job can be done better, or if it should be done at all.

Railroads have long suffered from the "we know how to run this place" at the same time the employees routinely describe management as a bunch of idiots.
 

Wow.  Just wow.  Very surprising move by KCS, and shows, in my opinion, how perverted Wall St. pressures have had on this industry.  

portlander Wrote:
-------------------------------------------------------
> texchief1 Wrote:
> --------------------------------------------------
> -----
> > Just so BNSantaFe doesn't do this PSR crap!
> >
> > Randy Lundgren
> > Elgin, TC
>
> As more and more railroads adopt this practice,
> and it proves to be successful from a financial
> standpoint, it's only a matter of time before BNSF
> leadership begins to be urged to follow suit. . .

"successful from a financial standpoint"...  This "success" will likely be shortlived, but long enough so the Wall Street "guys" can have their financial success and leave before the pain really starts.

Hopefully, BNSF will be smart and stay with their own successfully proven philosophy.  Then, if UP implodes, which there is good historical evidence that this might be likely, BNSF stands to gain a lot of new business and succeed even further at UP's expense.  Warren Buffet has done this very thing many times in his long, successful investing career - staying stead fast to what he knows to be true, let the others crash and burn, and then he makes big money off of their mistakes.

I'm curious about why KCS felt a need to jump on the PSR band wagon. Their numbers are good, no visible investment vultures.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> I'm curious about why KCS felt a need to jump on
> the PSR band wagon. Their numbers are good, no
> visible investment vultures.
>
> Posted from Android

You answered your own question; "good" is not good enough any more.

spwolfmtn Wrote:
-------------------------------------------------------
> portlander Wrote:
> --------------------------------------------------
> -----
> > texchief1 Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > Just so BNSantaFe doesn't do this PSR crap!
> > >
> > > Randy Lundgren
> > > Elgin, TC
> >
> > As more and more railroads adopt this practice,
> > and it proves to be successful from a financial
> > standpoint, it's only a matter of time before
> BNSF
> > leadership begins to be urged to follow suit. .
> .
>
> "successful from a financial standpoint"...  This
> "success" will likely be short lived, but long
> enough so the Wall Street "guys" can have their
> financial success and leave before the pain really
> starts.
>
> Hopefully, BNSF will be smart and stay with their
> own successfully proven philosophy.  Then, if UP
> implodes, which there is good historical evidence
> that this might be likely, BNSF stands to gain a
> lot of new business and succeed even further at
> UP's expense.  Warren Buffet has done this very
> thing many times in his long, successful investing
> career - staying stead fast to what he knows to be
> true, let the others crash and burn, and then he
> makes big money off of their mistakes.

I agree, and I hope I'm wrong. However, CN, CP and CSXT haven't "exploded" yet. With the exception of some very serious issues during implementation.

''Another One Bites The Dust''........