Railroads: Commercial Process and Shipper Pain Points

 The seven Class I freight railways in Canada and the US, Union Pacific, Burlington Northern & Santa Fe Railway, Kansas City Southern, CSX Transportation, Canadian National, Canadian Pacific, and Norfolk Southern. These seven railways are presented as case studies. To enable comparison, the information provided in relation to each railway is consistent. An overview of each railway is provided, followed by the manifest rail, bulk rail, and intermodal rail options available. Each of the three shipping options is then examined in the context of sales, account management, pricing, consumer experience, and technology. This information has then been synthesized to determine the key commercial shipper pain points and the touchpoints in the commercial shipper journey. All of the companies have opportunities where the implementation of digital and analytics would benefit their operatios.

DEFINITIONS

  • The definitions that have been relied on when preparing this report are detailed below.

Intermodal Rail

  • Intermodal containers are those that can be used across different modes of transport, including rail, sea, road. When changing transport modes, the freight, itself, is not touched, just the container. This reduces handling, which flows on to breakages and damage. It also provides added security. Intermodal transport requires a transport document to be produced for each mode of transport.
  • Intermodal transportation is not usually sold by the railway. Typically, these containers are sold by third party logistics companies, who arrange for transportation door to door via multiple modes of transport. The Intermodal Association of North America helps connect logistic companies and consumers.

Manifest Rail

  • A manifest train is one that is made up of a combination of mixed railway carriages. These can include box cars, tank cars, piggyback cars, and flat cars, among others.

Bulk Rail

  • A bulk train is one that carries a single commodity (with the exception of coal) and car type. These trains typically carry ore, soda ash, and ore.

UNION PACIFIC CASE STUDY

Overview

  • In the 1860s, Union Pacific embarked on the unthinkable, to build a transcontinental railway. The idea being to span the West from Sacramento to Omaha, across some of the most inhospitable lands on the continent, or as a Boston paper described it, a "ruinous space." The railway would span what had, in many respects, become two countries. Prior to this, only carts and wagons had made the journey, but the railway was seen as the key to expansion into the West. Six years and 20,000 men later, the railway was finished, although the human and financial cost remains unknown to this day. New kid on the block, Union Pacific built from the east, while Central Pacific built from the West.
  • Union Pacific celebrated its 150th anniversary in 2012. It has benefited over the years from several mergers and acquisitions that have helped it extend its reach. With its headquarters in Omaha, Nebraska, Union Pacific services the Western two-thirds of the US, with 32,000 miles of track, covering 23 states.
  • Passenger travel came to an end in 1971. Since then, Union Pacific has become one of the fastest growing transportation companies in North America. It transports many of America's raw materials and finished goods. Between 2005 and 2014, Union Pacific invested $31 billion in infrastructure to meet the transportation needs of its more than 10,000 customers. In 2019, it had an annual revenue of $5.2 billion.
  • Union Pacific has evolved with the times. It no longer considers itself a railroad, rather it has become one of the leading transportation companies in North America.

Manifest Rail

  • There are two manifest rail options offered by Union Pacific:
    • Small manifest, which is typically 1-10 rail cars, It ships or receives limited cars from multiple points across the US, and carries cardboard, lumber, municipal waste, plastics, sand, scrap metal, and sodium,
    • Medium manifest, which is typically 10-40+ cars. It ships or receives from multiple points across the US, and carries beer, cardboard, cement, LPG, municipal waste, sand, and plastics.

Bulk Rail

  • There are two bulk rail options offered by Union Pacific;
    • Bulk unit train, which is typically 90-150+ rail cars. It ships an entire train to and from a single point, and carries coal, grains, ethanol, fertilizer, rock, sand, and soda ash.
    • Premium unit train, which is typically 60-100+ automotive rail cars.
  • Coal is treated differently from the other commodities, with it subject to certain surcharges Union Pacific services coal mines in Colorado, Utah, Wyoming, and Illinois.

Intermodal Rail

  • Union Pacific offers "door to door intermodal shipping, transloading, and logistic solutions." There are a range of different options within the intermodal category, that can be used to minimize costs, save time, and create efficiencies.
  • Premium unit trains of 90-250+ intermodal cars, ship an entire train to a single point. It is then trucked to its final destination. It carries appliances, auto parts, clothing, finished vehicles, housewares, packaged food, and retail goods.
  • Intermodal transportation is, in simple terms, freight that is transported by more than one mode of transportation, although many rail transporters use it to refer to freight transported in containers. Transloading is a derivative of intermodal transportation, the primary difference being unlike intermodal transportation the freight does not stay in the same container for the entirely of the journal (For example, steel may be moved to a truck by a crane, or gravel may move by forklift from one bin to another).
  • The logistics experts work with the consumer to leverage intermodal and transmodal transportation, which helps unlock some of the economic benefits of shipping with rail, auto parts, clothing, finished vehicles, housewares, packaged goods, and retail packages.

Sales

  • The sales and marketing team is divided into three different commodity groups. Finance and operational expertise are included in each commodity group to better serve the consumer. A dedicated Shipment Quality team and an Industrial Development expert are included in each team to address site and location analysis, which is part of the specialist services offered. This is on the bulk transport side of the operation.
  • Union Pacific´s intermodal sales are handled by their subsidiary company Loup, that works with the consumer to ensure their needs are met. The areas that Loup is responsible for include:
    • Door-to-door delivery;
    • Logistics — visibility assistance across a border, supply chain management support, or a customized logistics solution ; and
    • Specialized services — warehousing, packaging, and everything in between.
  • The team at Loup will work to provide cost solutions that will enable cost-savings. The website is unclear, but it appears the sales and account management aspects of Loup´s service are largely fulfilled by the same person, The logistic expert role covers these aspects of the job.
  • Part of the sales strategy adopted by Union Pacific emphasizes the benefits of rail transport. which include the large cargo capacity, the lower cost per ton mile, increased market reach, scalability, reliability, and sustainability.
  • So they can better serve the consumer, Union Pacific has adopted railports, where it partners with transload operators, while investing in plant and equipment, so they can better serve strategic markets.

Account Management

  • Union Pacific has relationships with 200 short line and other Class I railways, trucking and shipping companies, so freight can be shipped all around the globe. Consumers are given a logistics expert to manage their accounts. These logistic experts serve as the first port of call for consumers when they need the service.
  • When shipping with Loup, a logistics expert is responsible for each consumer account. Part of this role exists to minimize the stress felt by the consumer, while maintaining control over the shipping process. For the consumer, in addition to the aforementioned, customized reports, real-time GPS tracking, visual analytics, data filters, and pipeline health checks in combination with their account manager serve to make the whole process as painless as possible.
  • The logistics expert effectively works with the consumer to manage the account. Other services provided include:
    • Helping to pre-plan production and staffing levels;
    • Managing capacity;
    • Assessing performance of the supply chain, and assisting in future planning;
    • Stage resources; and
    • Identifying issues with the supply chain before they become problems.

Consumer Experience

  • One of the strengths of Union Pacific is recognizing one solution does not fit all circumstances. so concentrates on providing flexibility. Union Pacific aims to optimize the customer experience by recognizing everyone has their own needs.
  • Available options include, multiple carriers, expedited service, door-to-door delivery, and cost-effective shipping. Union Pacific encourages consumers to work with its logistic experts, to ensure their needs are met.

Pricing

  • Addressing another common consumer pain point, price, Union Pacific aims to provide consumers with the most effective solutions, that meet their needs. As their role is not confined just to the railway any longer, Union Pacific is better placed than some of its competitors to find alternative solutions for consumers.
  • A full list of the products that Union Pacific Transports, some limited pricing information, and details of each area are detailed here.
  • To obtain pricing information for intermodal transportation, consumers are required to register on the site or fill-in a web form, with their details, and a logistics team member will contact the consumer with pricing information.

Technology

  • Union Pacific uses technology to provide transparency. It employs GPS tracking on all locomotives, allowing automatic equipment identification to streamline inventory management. While the shipping management software, which they employ can be used allowing Union Pacific across carriers, strategically manages, and tracks freight items.
  • ShipVision is the shipping management used by Loup. Using GPS tracking, Union Pacific can create customized reports and real time tracking, which gives the consumer some peace of mind, as well as greater control over the shipment. In addition, ShipVision is able to provide predictive analytics on the shipment.
  • There is less opportunity presented by Union Pacific, compared to some of the other shippers for digital and analytics, simply because the company has this capability already incorporated into its ShipVision software, although the extent of the analytics available could not be determined based on the available information.

BURLINGTON NORTHERN & SANTA FE RAILWAY (BNSF) CASE STUDY

Overview

  • Over the last 170 years, more than 400 railways have merged or been acquired. The result is the Burlington Northern & Santa Fe Railway (BNSF). In 2010, BNSF became part of the Berkshire Hathaway family, when it was acquired by the company, Today, BNSF´s 32,500 miles of track services the western two-thirds of the US, parts of Canada and the Mexican gateway.
  • The company has a proud history of innovation throughout its development, having previously carried mail to meet the Pony Express, introducing mail cars, so mail could be sorted en route. The company was the among the first to operate the printing telegraph and adopt train radio and centralized traffic control. America´s first streamlined electric-diesel train, the Zephyr, was introduced by BNSF. BNSF and its predecessors are proud to have contributed to the development of the largest logistics system in the world, pioneering and developing the intermodal system used today.
  • BNSF has its headquarters in Fort Worth; Texas, employing over 40,000 people in its operation, In the 2019 financial year, BNSF had an estimated revenue of $13 billion. The service area of BNSF is detailed in the map below.

Manifest Rail

  • The manifest rail service incorporates the individual rail car service offered by BNSF. The types of commodities transported within this service are canned goods, steel, lumber, and paper. This service provides access to most major markets in the western US.

Bulk Rail

  • Bulk rail is known as dedicated rail at BNSF. The dedicated train service offers "the most efficient and economical way to move high-volumes of single commodities from a single origin to a single destination" Three types of dedicated rail are offered by BSNF: coal dedicated trains; shuttle trains; and other unit trains.
  • The dedicated train service is used to transport single bulk commodities. These commodities include "coal, grain, minerals, liquids, special project cargo and oversized commodities," offering a non-stop service that contributes to supply chain efficiencies.
  • Coal unit trains are, generally, 110-150 cars in length.
  • Grain unit trains are divided into two categories:
    • Shuttle trains, which must meet certain requirements to qualify for shuttle rate, This is a non-stop origin to destination service.
    • Destination trains are 110 cars in length and have being specific rules relating to what qualifies as a destination efficient train. They are able to be split en route to enable multiple destinations.
  • Other unit service trains are available for other commodities, such as lumber, steel, wind blades, pipe, with the train length varying in length depending on the commodity. There is capacity for single units to be included in the train. This is a non-stop origin to destination service.

Intermodal Rail

  • Considered the pioneer of intermodal railway, BNSF offers intermodal transportation to those owning containers and those needing to lease them. BNSF ships more than one million intermodal loads more than its nearest competitor annually. It offers a standard and expedited service. For companies needing to lease a container, BNSF provides links to several logistic companies that can arrange this.
  • The process is relatively simple. For those with containers, an intermodal agreement must be signed and credit approval granted. BNSF has a suite of online tools that will then assist in utilizing the intermodal network. These include track and trace, submitting bills of lading, managing invoices, and managing storage charges.
  • BNSF´s intermodal network and details of its partners are detailed in the map below.

Sales

  • A process has been developed, utilizing different tools, that enable companies or individuals to input specific details, and receive information on pricing and routes, prior to contacting the company directly to arrange the service. This serves the purpose of acting as a filter, prioritizing customer service options to those that are more likely to engage with the company.
  • BNSF has a customer-initiated web form. Consumers fill in the details of the type of freight they wish to transport, and how they wish to be contacted. BNSF will then get back to the person with a price and other pertinent information within one working day. BNSF has adopted for a simple process for becoming a freight customer. It is the same process, irrespective regardless of the size of load or type of transportation required.

Account Management

  • Account management is largely a consumer-directed task, with consumers given access to the necessary tools once an agreement with BNSF has been signed. Clearly, there is a push by BNSF to adopt technology that enables all aspects of the account to be addressed by the consumer themselves. Unfortunately, a login is required to review this system.
  • The details relating to BNSF´s account management are sparse on their website. The details that can be gleaned from the information available suggest that accounts are managed on a commodity and type of transportation utilized basis. Consumers are directed to contact various team leaders, who assign team members to deal with the accounts.

Consumer Experience

  • The consumer experience provided by BNSF is based upon the premise that they offer the most complete service out there in respect of rail freight. The website gives no direct information that the company offers more than just the rail aspect of freight transportation, although, the intermodal service is a door to door service, suggesting the company has partnered with other transport providers.
  • The BNSF experience, lacks the coherency and completeness, which seen in companies like Union Pacific, who have created the complete experience "in-house." BNSF refers clients to a list of third party logistic companies if the needs of the consumer extend beyond its rail network. This means the consumer is dealing with a company independent of BNSF, that is under no obligation to protect BNSF´s business. The net effect of this is it makes for a somewhat disjointed consumer experience.
  • For the motivated and tech savvy, there is the opportunity to control all aspects of the account independently of BNSF from booking the service required, though to the final delivery and payment. While some will always require the "personal touch," there is an increasing number of people that prefer to control these aspects of the relationship themselves, enjoying the perceived efficiencies it creates.

Pricing

  • Despite touting a new level of transparency around pricing and directing consumers to the Get a Freight Rate tool, an account and a login is required to access the tool and other information. Although, in fairness, some of limited details around rates and surcharges are available on the respective pages of each of the different services.
  • The price authority and public price list are also presented as being available on the BNSF website, but actually require an account and login to access.

Technology

  • BNSF utilizes an Intermodal Advisor tool on its website that allows consumers to compare the various options based on speed, cost, and sustainability prior to contacting the company directly. Third party logistic companies are also able to utilize this tool to arrange intermodal transportation. This is the only one of their planning tools that is available for public use. The others require a login to access.
  • The information on the website suggests that technology is a high priority for the company, and it has invested heavily in account management software that places control of the account, to a large degree, in the hands of the consumer. There are a number of tools available that can assist consumers in this task.
  • No information or data was available on the BNSF website regarding the use of digital and analytics. This suggests there is potential for expansion into this area, which would provide additional data that would benefit the shipper and the railway. This would ultimately make the railway more cost effective, and enable consumers to optimize their loads, and ensure the right service is being used for transportation.

CSX TRANSPORTATION (CSX) CASE STUDY

Overview

  • CSX Transportation (CSX) has a rich (almost) 190 year history, spanning from the time of horse-drawn rail cars to the new age of electric locomotives, which are capable of pulling hundreds of tonnes of freight. America´s first common carriage was horse-drawn, provided by the Baltimore & Ohio Railway, which was later became part of the CSX family.
  • The first railway was just 13 miles long. It is dwarfed by the 21,000 mile network covering 23 states that CSX services today. Another company that has since become part of the CSX family, B&O debuted the first American locomotive. Known as Tom Thumb, due to its small size, the steam engine had a top speed of just 10-15 miles per hour.
  • In 1980, Jimmy Carter signed the Staggers Rail Act, which reduced some of the regulation that had hampered the industry. The Chessie System and Seaboard Coast Industries (already the result of a number of mergers and acquisitions) was born, when the two companies merged and became known as CSX Transportation.
  • Today CSX is a publicly traded company, with a 2019 revenue of $11 billion. It has its headquarters in Jacksonville, Florida and employs over 21,000 Americans throughout its network. CSX´s rail service area throughout the eastern US is detailed in the map below.
  • Like Union Pacific, CSX has expanded beyond a railway, and now incorporates 70 ports within its network. The transportation aspect of its operation is known as ShipCSX.

Manifest Rail

  • There are a range of products that are able to be shipped through manifest rail. Automotive (not privately owned), energy products, building materials, agricultural products, food products, manufactures goods, metals, machinery, paper, and waste are able to be shipped through ShipCSX.
  • CSX´s ShipFX division handles this freight. Information, such as pricing is available only once an account is established.
  • The manifest rail operates on a scheduled service basis to improve safety, and efficiency. It also provides for better utilization of resources.

Bulk Rail

  • Bulk rail at CSX is dependent on the commodity that is to be shipped.
  • Grain trains are divided into two categories;
    • 90 car Grain Express trains, where consumers benefit financially by taking responsibility for uploading and unloading the grain, provided they meet certain criteria; and
    • Grain Unit Trains are typically longer trains that may be added to en route to create efficiency on the network.
  • A unique service is available for finished vehicle distribution involving 35 auto distribution centers throughout North America. Consumers can only use this service by engaging TDSI Vehicle Distribution Services, a subsidiary of CSX. The service transports 5 million vehicles per year.

Intermodal Rail

  • CSX recommends intermodal transport for those who are shipping freight more than 500 miles. One of the advantages of using CSX intermodal is they will work with the customer´s current transport provider to integrate intermodal into the transport solution. This means that the transition is as stress-free and painless as possible. However, a transport provider is required to access the network. CSX can assist in finding a provider, who will be the customers point of contact.
  • There are few additional details available regarding freight that can be shipped and the way it is shipped. The terminal destinations for freight transported intermodally is below,

Sales

  • The sales process for intermodal begins with the information provided on the consumer website offering a intermodal expert´s assistance in preparing freight for intermodal transport, creating an indirect relationship between the consumer and CSX. This is offered on a complimentary basis. Bearing in mind, the consumer will not be directly dealing with CSX. CSX also offers the consumer assistance, in a consultation-type role to optimize the supply chain on an ongoing basis.
  • By contrast, the sales process adopted for the transport providers is straight to the point and requires the completion of a web-based form and contact with an expert to initiate the sales process.
Non-intermodal sales are driven by the consumer via the ShipCSX technology. This requires an account to be established and approved prior to use, but once the preliminary issues are resolved, the consumer is given access to book freight, as required.

Account Management

  • The information available publicly suggests that most accounts do not require an account manager. Consumer´s must book freight for the intermodal system via a third party logistics company or a transport provider.
  • Bulk and manifest freight is managed through the ShipCFX system, which puts the control for all aspects of the service in the hands of the consumer. If there are issues with the account, its management, or different freight options, a team of customer service representatives are available to assist.

Consumer Experience

  • Given a transport provider is required to access intermodal transport, the company has created a dual point of entrance on its website, so that transport providers are directed into a separate stream apart from those who are looking to ship goods. This means the consumer is directed to content orientated toward them, and adds to the overall customer experience.
  • The system for managing manifest or bulk freight through the ShipCFX will add to the customer experience for those that are tech-savvy. They will benefit from real-time data, billing, inventory management, and loading options that are available 24 hours a day. Switch requests can also be made via this system. This creates convenience and efficiency for the consumer.

Pricing

  • No pricing information was available in the public domain. Once an account has been established, this information is available via the ShipCFX system, with a secure login.
  • Pricing details regarding intermodal transportation are not publicly available. Third party logistic companies and transport providers are directed to contact an expert for this information.

Technology

  • For intermodal transportation, an interactive map is available that enables consumers to build a shipment, After entering the necessary details, a brief analysis of the viability of the proposed shipment is provided, with directions on how to contact an expert. No pricing information is given.
  • The primary technology used by CSX is the ShipFX account management program. This technology puts control of the account in the hands of the consumers. Within the ShipFX software infrastructure, provision has been made for two sets of tools, an intermodal and a carload set of public tools that assist in decision-making.
  • The ShipFX system offers:
    • The most up to date information;
    • Saves time and eliminates cost by offering digital service;
    • Reduces errors and delays;
    • Real-time transactions; and
    • Convenience.
  • The company has largely opted for a hands-off, technology-based approach to the shippers. No analytics capabilities were suggested in any of the literature that was available on the technology the company was employing. There is potential for development in this area, although, this may not be a path that the company wants to go down, having largely adopted a hands-off approach. The opportunity to advance the use of analytics would in all likelihood be better received by the individual shippers, who could benefit from the software.

KANSAS CITY SOUTHERN RAILWAY (KCS) CASE STUDY

Overview

  • KCS was founded in 1887 by Arthur Stilweil and Edward Martin and was known as the Kansas City Suburban Belt Railway. It soon became a vital link between the North and the South. The route the company established bucked the trends of the day, as instead of running east to west, it ran North to South. starting in Kansas City, navigating its way through Louisiana, before terminating in Port Arthur, Texas.
  • It took on its current name in 1900. A luxury passenger service, Southern Belle was established between Kansas City and New Orleans. This service was used by Harry and Bess Truman when they traveled. Kansas City Industries was set up in 1962 by KCS to pursue non-railway opportunities.
  • A series of mergers and acquisitions have made KCS the company it is today. Among the acquisitions was that of TFM, which enabled KCS to expand its network into Mexico. KCS has its headquarters in Kansas City. They currently employs 7,200 staff across the US and Mexico. In 2019, it had an annual revenue of $2 billion.
  • The network map of KCS´network is detailed below. It contains 3,400 miles of track, through ten states.

Manifest Shipping

  • No reference is made to manifest or bulk shipping on the KCS website. Aside from intermodal shipping, the only other option is carload shipping, which appears to be a variation on manifest and bulk shipping. Carload shipping appears to be a variation of manifest rail.
  • All volumes and commodities are able to be shipped via this option. No details are provided regarding the trains themselves, the other commodities transported on them, or the number of cars. This shipment option can be used for international freight going to Mexico.
  • The commodities that KCS ships include, aggregates and minerals, agricultural products, appliances, automotive, chemicals, consumer hoods, food products, paper, metals, and petroleum and LPG.

Bulk Rail

  • Bulk rail is availale for grain. No further details were provided.

Intermodal Rail

  • Internodal rail is available for the shipping of freight within the US or to Mexico. There are also two facilities available in Panama City. All comodities can be shipped via intermodal rail.
  • The service provided by KCS, includes a premium international service that is designed to avoid the issues that occur when shipping internationally, such as customs clearance issues, congestion at the border, limited truckload capacity, imbalanced shipments and time inefficiencies. No details relating to the number of cars was available.

Sales

  • Consumers were directed to contavt KCS representatioes to discuss options.
  • There is very limited amount of information available on the KCS website, The majority of the details around sakes required an account and login to access. One passing observation: is how little information about the company operations was available, compared to the other lager players in this landscape.

Account Management

  • KCS operates a web-based invoicing system, Present and Pay, which provides invoice management and disputed invoice procedures for consumers.
  • It should be noted that the language on the KCS website is ambiguous, and at times unclear as to whether it dealt exclusively with third party logistics companies, or the consumer directly.

Consumer Experience

  • For those shipping internationally, the benefits of using the intemodal system for cross border shipments improves the experience of international shipper, although, a lack of available information aroind the shipping options, and ambiguous language regairding who the customer seems to equally do the opposite

Pricing

  • For freight transported by the carload, KCS has two models of pricing:
    • Percentage based commodity shipments; and
    • Mileage based commodity shipments.
  • All other information, including the circumstances and commodities that apply to each pricing model were not available without registration and login.
  • Pricing for international shipping is governed by international regulations and rules, while the rules are freely available on the website, the pricing is only available with a login. However, this pricing model covers, not only the cost of transportation, but any costs associated with crossing an international border,
  • Intermodal pricing information is available only with a login.

Technology

  • Present and Pay is the electronic invoicing system used by KCS. It is a web-based platform that allows consumers to "view, download, dispute and pay invoices" in an easy and convenient manner. The payment management system allows consumers to initiate payments via ACH, setup recurring payments, or make one-off payments. The invoice management system allows consumers to view and print invoices, and disppute invoives electronically.
  • There was very little information available about the technology employed by KCS, and no mention of analytics software being used. This suggests there is an opportunity to advance this technology at KCS.

NORFOLK SOUTHERN CASE STUDY

Overview

  • Norlfolk Southern has a history that spans two centuries. The route that it established over the Blue Ridge Mountains via Saluda Greene in 1878 was the steepest track on the main line. It was also responsible for the longest railway bridge in the US, building the bridge accross Lake Ponchartrain, Louisiana in 1883.
  • 1925, saw Norfolk Southern use its first diesal locomotive as a switcher. it became the first railway to complete the diesalizaton of its fleet in 1953, and the first railway to computerize its operations in 1965. In 1987, Norfolk Southern became the first railway to transport 1 million intermodal containers in a year.
  • It has its headquarters in Norfolk, Virginia. With an annual income of $11 billion, Norfolk Southern employs nearly 25,000 people in its operation. Norfolk Southern's service area is detailed in the map below.
  • Norfolk Southern has evolved to provide, not only shipping options, but logistics solutions as well to its consumer clientbase. It´s 19,500 miles of track covering 22 states, services every major Eastern port.

Manifest Rail

  • Norfolk Southern has established several rail corridors that assist in moving commodies throughout North America in a timely fashion. These corridors include, the Southeast/Northeast Crescent corridor, the Midwest Heartland corridor, the Meridian Speedway, and the Pan Am Southern between New York and Boston. Manifest rail options are available within these corridors.
  • No other mention is made regarding mainfest rail on the Norfolk Southern website.

Bulk Rail

  • Bulk rail options are available for a range of different commodities. Within the Norfolk Southern network, there are over 400 general warehouses that are available to consumers should storage be required.
  • For those transporting lumbar products, Norfolk Southern has over 60 Lumber, Panel, and Engineered Wood mills, scattered throughout its network. The company also has a range of wood treatment plants within its network.
  • A dedicated finished vehicle service is available daily between assembly plants and distribution facilities. There are similar autopart delivery options.
  • Various chemical transfer facilities are also available throughout the Norfolk Southern network. These are provided by independent partner organizations.
  • Bulk rail for coal is provided through 21,000 coal cars available on the network.
  • There are 20,000 rail cars available for the transportation of metal and construction materials, with 50 steel processors, 150 scrap metal processors, 67 quarries, and 30 aggregate distributors available through independent partners within the network.

Intermodal Rail

  • Norfolk Southern's intermodal network is one of the most extensive in North America, connecting 58 major Eastern ports to the rest of the world. It has created partnerships with "intermodal marketing companies and asset-based carriers such as truckload and less-than-truckload companies," that ensure its intermodal sevice is available throughout the US.
  • The core triangle between Chicago, IL, Harrisburg, PA, and Atlanta, GA is one of the fastest and most efficient intermodal networks in the US. A premium service, offering expedited shipping and personal and constant supervision of freight is also available. The service provides for containers owned by consumers. It also offers leased containers for use.
  • Express intermodal services are available from the terminals listed here. Storage is also available at a number of facilities.
  • Transloading is available, with storage available at a number of Norfolk Southern facilities. Through its logistics company, Norfolk Southern is also able to arrange door to door delivery with its partner trucking network.

Sales

  • Sales information is available based on the commodities being transported, with each of the major commodities having a team available to assist with enquiries from consumers. There is less of an emphasis from Norfolk Southern on the type of rail services available, and more of a focus on the type of commodity being transported, the service used comes second, after the consumers needs have been properly assessed. Email details and web-based forms are available to consumers to assist in this process.
  • Norfolk Southern has developed an extensive network of partners that are available in respect of certain commodities (previously listed). This places Norfolk Southern near the top of rail providers, in terms of making key support networks available to consumers, which sees the service provided by Norfolk Southern being one of the most comprehensive available.

Account Management

  • From the limited information available, it appears that account management is primarily consumer directed, with an extensive range of tools available to assist consumers in this process.
  • Account management tools available include invoice management, freight tracking, diverting and switching options, and claims management. Access to these tools is provided via a secure login once the consumer has registered their account and it has been approved.

Consumer Experience

  • Norfolk Southern has invested heavily in providing a comprehensive consumer experience. Of the seven Class I railways discussed in this report, the network of processing, treatment, storage, and transport providers, Norfolk Southern works with, would have to be the most extensive.
  • The company looks to provide the complete experience for consumers, and through its network, attempts to provide for all aspects of operation, that a consumer may require once the product leaves their facility. This one-stop shop approach creates efficiency, convenience, and certainty for the consumer.
  • The non-discrimatory approach of dealing with consumers, logistics companies, and transport providers also means that consumers have the convenience of dealing with only one operator for all of their ongoing transportation needs. It creates options, that would not otherwise be available, for the consumer.

Pricing

  • No pricing details are available publicly on the Norfolk Southern website, consumers are instead required to contact the company directly for this information. A webform is provided.
  • Logistics, Distribution and Transportation Companies that require pricing information are also required to submit a full explanation of the participants and the competition before the pricing information is made available to them.
  • Pricing is done via a quote based system, with the pricing options provided to consumers valid for one week from the time it is communicated to them. Pricing is provided according to the company divisions of intermodal, agricultural goods, and chemicals. Rates are provided upon receipt of an email containing details of details the commodity or product, origin, and destination.
  • Further information regarding pricing is available for registered users through the AccessNS system.

Technology

  • The eFreightBill software used by Norfolk Southern allows consumers to manage their accounts electronically. It incorporates all aspects of the financial relationship between Norfolk Southern and the consumer.
  • Eectronic shipping management software is employed by the company to manage its fleet, load its fleet, manage the loads, and to coordinate onward transportation with partner networks.
  • AccessNS is the software that provides the consumer with the information they need regarding rates and scheduling. It also enables consumers to manage their account and to input and book freight onto different services.
  • Tracing technology is also available, although no further details were available on the website.

CANADIAN NATIONAL (CN) CASE STUDY

Overview

  • Canadian National (CN) celebrates its 100th anniversary in 2020. It all started with the Champlain and St Lawrence Railway back in 1830, Canada[s first railway. CN was incorporated in 1920, made up of several railways that had merged or been acquired over the years. In 1948, the company added diesal locomotives to its fleet, adding to its efficiency.
  • In 1960, the last steam locomotive pulled into Winnipeg, with CN retired these historic workhorses. Just three years later, CN launched its first transcontinental passenger service, the Panorama. The passenger services later became VIA Rail, a crown corporation. CN, on the other hand, was privatized in 1995.
  • CN has its headquarters in Montreal, Quebec, moving nearly $250 billion of goods each year. It has an annual income of $11 billion, and employs 25,000 people throughout the US and Canada. CN offers freight services throughout Canada, the Eastern US, and Mexico. CNs network is detailed in the map below.

Manifest and Bulk Rail

  • CN does not provide information on its website regarding these two options separately, in fact, no details are provided on the various rail options available to consumers. Consumers are instead directed to contact an "expert" directly. This ensures that the option that best fits the needs of consumer is selected.
  • Bulk rail options are available for grains and finished vehicle distribution.

Intermodal Rail

  • The intermodal network comes with a range of different options that help to ensure that the consumers complete needs are met. These options include temperature controlled carriages, port partnerships, distribution and logistic centers, trucking options, and customs brokerage means consumers have a door to door service available to them.
  • Intermodal options can extend to 300 cars and 10,000 feet in length.
  • Given the amount of grain transported across its network, CN has invested in intermodal grain options, which offer the following benefits over non-container options:
    • Increased capacity makes it easier to secure shipping;
    • Increased market options, as some consumers are unable to receive grain in bulk, but can receive containers;
    • Better freight rates through economies of scale;
    • Availabilty of increased industry financing when shipping by container instead of bulk; and
    • Better and more secure option for grains that are processed prior to shipping.

Sales

  • A customer center is available on the website that attempts to answer all initial questions regarding the shipping process and the options available.
  • A consumer journey schematic is located on the website which consumers can use as a guide. This shows where they are in the grand scheme of things and directs them to the appropriate person or team to best meet their needs.
  • CN works on the principle of person to person contact to ensure that all the required information is available when a decision is made regarding the best available shipping option. In CNs words, "The more information you can share with us, the quicker we can build a price and route that works for your business. "
  • Consumers are directed to contact a sales "expert" to discuss their shipping needs, and to ensure that the service chosen is the most appropriate for them.

Account Management

  • There is little information available on account management on the parts of the website that are publicly available. Most of this information is only available with a login. It appears consumers have several options available to them, which impact how the account is managed.
  • Consumers can elect to manage their own accounts. Access to invoices and payment options are provided via the client portal. These consumers need to contact a member of the customer service team to book transportation, when required. This can be done on a recurring basis.
  • For consumers with more complex transportation needs, needs requiring services beyond rail, freight crossing international borders, and those not wanting to manage their own account, there are logistics, customs brokerage, and distribution experts available to manage the account on their behalf.

Consumer Experience

  • Part of the service available to consumers is a customer brokerage option. This effectively unlocks markets outside of CN´s network to consumers, while minimizing the need for them to deal with third party providers. This creates convenience and efficiencies. while adding to the overall consumer experience.
  • The distribution, logistics, and storage facilities available within the network for certain commodities does similar. It also contributes to better overall cost management for consumers. CN believes that this comprehensive service ultimately improves the supply chain and increases the competiveness of its respective consumers.

Pricing

  • No pricing details are available publicly on the CN website, consumers are instead required to contact the company directly for this information.
  • There is also information regarding relevant transportation rates available to consumers once they have established an account and have a secure login.

Technology

  • Whilst the sekf management options for accounts were mentioned on the website, there was no mention of the technology that was being employed.
  • There was also no indication that the company employed analytics software, suggesting opportunities exist around analytics within the company.

CANADIAN PACIFIC CASE STUDY

Overview

  • Canadian Pacific was established in 1881 with the purpose of uniting all Canadians from coast to coast. Over the years the company has played a major role in the promotion of tourism and immigration. It also played a major role in distributing goods to Canadians over the war years. Over 11,000 Canadian Pacific enlisted, experiencing the war effort firsthand. 10% never returned home.
  • Over the years, the services provided by the company have evolved, and it diversified to include steamships, hotels, airlines, mining, oil and gas exploration, delivery, and telecommunications companies. In the 1980s, Canadian Pacific began to revert to its core business as a railway, acquiring several smaller railways to extend its influence.
  • These acquisitions also gave Canadian Pacific access to the eastern US states and ports. "Today, Canadian Pacific is a transcontinental railway in Canada and the US with direct links to major ports on the west and east coasts. Canadian Pacific provides North American customers a competitive rail service with access to key markets in every corner of the globe. Canadian Pacific is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise"
  • Canadian Pacific has its headquarters in has its headquarters in Calgary, Alberta. It employs more than 12,000 staff and has an annual revenue of $5 billion. The service area of Canadian Pacific is detailed in the map below.

Manifest Rail

  • Grain transportation is offered on a carload basis via manifest rail.
  • Unfortunately, there was almost no information available on bulk and manifest rail options. What information was available, was in a guide. However, despite trying to access this document numerous times over two days, we were unable to do so. The link appears to be vroken.

Bulk Rail

  • Grain transportation services are available for consumers.
  • Dedicated trains are available.

Intermodal Rail

  • There are two options avalable to consumers for intermodal rail at Canadian Pacific. They are
    • Door Direct: This option includes delivery and pickup, use of a standard container, and direct shipping transfer from rail to truck,
    • Terminal Direct: This option can utilize either consumer owned containers or containers provided by Canadian Pacific and includes rail to truck transfer, and one in-gate or out-gate.
  • Canadian Pacific´s intermodal network is illustrated in the map below.
  • Canadian Pacific offers a range of different options with its intermodal system, including a comprehensive range of containers for the consumer to use in their shipping. These options are detailed in the following chart.
  • The intermodal network is a scheduled network. If customized solutions are required, consumers are directed to CP Logistics by there account manager, CP Logistics is equipped to provide customized solutions.
  • Canada Pacific provides the most information about its service of any of the companies discussed in this report, with a helpful intermodal shipping guide,

Sales

  • Prior to shipping on the intermodal system, consumers must have developed a line of credit with Canadian Pacific. Part of the sales process will include connecting the consumer with their account manager to arrange this.

Account Management

  • Account managers are assigned to each account when it is established. The account manager acts as a contact point for the consumer over the course of their relationship with Canadian Pacific. They also help the consumer to select the rail option that will best meet their needs
  • One of the first roles of the account manager is to assist the consumer in establishing a line of credit with the company. This is required before any goods are uploaded on the intermodal system.
  • Once a line of credit is established the intermodal counsumer is connected with an onboarding team, who works with the consumer to determine their requirements and provide the best solution that fits their needs.
  • The onboarding team also assists the consumer to set up their on-line presence and familiarize them with the online tools available to self-manage their account.

Consumer Experience

  • Canadian Pacific seems to provide the best customer service of the seven companies in this report. They provide clear and comprehensive guides that explain the options to consumers. This is accompanied by proactive customer support and seemingly each consumer touchpoint in their journey. There is customer support available that is specific to each stage of the customer journey, with this additional support being accessed through an account manager who serves as a liasion, of sorts, with different divisions within the company.
  • Once the consumer has set up their account, the account provides the ability for them to book trains online, switch loads, or raise issues. Should consumers prefer the personal touch there is the account manager to facilitate whatever it is they need addressed. This provides a mix of human and digital interactions, the degree to which either is used is largely in the hands of the client and their personal preferences.

Pricing

  • Like all of the other companies, pricing information is not available until an account has been established and the consumer given access to the account management tools. Alternatively, consumers are able to obtain details regarding rates directly from the "experts," with details available on the website regarding how to contact them.

Technology

  • The Grain Request System allows consumers to login to the system and order the transportation of grain. The consumer is able to choose from intermodal, dedicated grain trains, or carloads. This system does not allow cutomized requests, but does take the stress out of arranging transportation.
  • Like the other companies, Canadian Pacific has an invoice review and payment system, which allows commercial shippers to manage their payments and the associated paperwork via an online payment platform.
  • Electronic Data Interchange (EDI) technology is employed by Canadain Pacific to ensure all of the necessary documentation required to transport a load is completed appropriately. A list of the documents that can be uploaded via this technology is available here.
  • Canadian Pacific uses technology to its advantage. There is nothing to suggest that analytics technology is being employed, suggesting an opportunity exists at all levels within the operation.

COMMERCIAL SHIPPER PAIN POINTS

  • There are several key pain points for commercial shippers. The pain points are aptly summarized in the material provided by Union Pacific, who has listed the main pain points for the commericial shipper, and then focused on providing solutions for each of these pain points. The key pain points are as follows:
    • Price: As always, price is one of the primary pain points, with commercial shippers looking to minimize the costs associated with transportation. Most of the companies have tried to overcome issues around price by offering a tiered service, with consumers paying more for a fast and convenient transport solution, and a more economical service being offered for those where speed and convenience are less of an issue. It seems when commercial shippers are looking for shipping options, there is a balancing act required, which requires them to balance their price requirements with the need for a faster and more efficient service.
    • Services Offered: The type of transportation available is a major pain point for commercial shippers, It is vital that any company chosen as a transporter offers the service that the commercial shipper requires. This will be a major pain point for commercial shippers, especially those who have very specific requirements around the transportaion of their loads.
    • Speed & Efficiency: As discussed above, speed and efficiency is closely related with price, with each moving in the same direction. For example, when the price is lower, the speed & efficiency is reduced (and vice versa). When a commercial shipper is chosing the company they wish to transport their goods, one of the key determinants will be the company that is best able to meet their requirements in terms of the balance thery are looking for between price and speed & efficiency. This tiered approach attempts to provide a continuum for commercial shippers, so they can choose where they want to sit on that continuum based on their individual needs.
    • Goods Transported: If a transporter is not able to transport the goods the commercial shipper is looking to ship, this will be a deal-breaker. There is no way around this pain point, with a compromise seemingly impossible.
    • Areas Serviced: The areas serviced is another key pain point, and one that will ultimately be a decisive factor in whether the rail transportation services of one company are chosen over that of another. This pain point is largely fixed, with the respective companies either servicing the required area or not. There may be some room for movement by companies that are running logistic companies or who have a truck or sea network in addition to the rail network, but issues relating to cost, speed, and efficiency are then going to come into play.
    • Convenience: This is a variable pain point depending on the requirements of the commercial shipper. For an irregular shipper, convenience may be less important, however, for a commercial shipper that ships on a regular basis convenience becomes more of a pain point. If the shipper is shipping regularly then any inconvenience around transportation is going to become a factor for them in terms of lost efficiency, the associated costs of overcoming the inconvenience, and any delays in getting their product to its final destination.
  • Although it is not directly stated in the material provided by the companies in the case studies, the ways in which they have structured their operations suggests that these pain points have influenced them, with most of the railways offering different options that can accomodate the variable pain points of the commercial shipper.

COMMERCIAL SHIPPER TOUCH POINTS

  • There are several potential touch points in the commercial shipper journey that were consistent among the companies detailed above. One of the difficulties with this list is that there is clearly a considerable amount of information available when the consumer has created an account, which could not be accessed- It is possible that the information consumers have access to which negates some of these touch points. They are as follows:
    • Initial Inquiries: This is the first contact the commercial shipper has with the company when deciding whether to engage the company´s services. Most of the companies took advantage of this opportuntiy, and did not provide key information freely on their websites. In almost all instances their was a requirement that the shipper speak to the rail company, be it by email or phone.
    • Account Setup: Based on the information available, Canadain Pacific seemed to be the only rail company that actively engaged with the consumer for this, and the following two touchpoints. Canadian Pacific has invested human resources in ensuring that accounts are set up properly, the shipper understands the technology and tools that are available to them, and the capabilities of that technology. The advantage of availing themselves of this opportunity means it builds the foundation of a good ongoing, and long-term relationship. It also means there are less likely to be issues further down the track, with the shipper becoming frustrated with the technology or being unable to arrange shipments due to the account application and credit process not being completed properly.
    • Understanding the technology: (see above)
    • Credit Process: (see above)
    • Pricing: The rail companies were split on making contact in relation to pricing. The majority of the companies provided access to the freight rates of the different services via self service resources accessed through a consumer portal. Some companies required direct contact to book loads, while others gave consumers total control over their accounts without requiring them to speak to the rail company directly. All had some form of customer service representative available should the shipper need personal assistance in relation to this issue.
    • Shipment Booking Process: Booking shipments is another potential touchpoints. There was some variation from the companies around booking. Some companies required contact to book loads onto trains, while others had opted for a total self-service option. Others were somewhere in between on the continuum, with both options available, and the choice largely coming down to the personal preference of the shipper.
    • Shipment Loading; The definition of loading and delivery means that there will be a touchpoint on these occassions. A number of the companies had produced extensive resources, most within the consumer portal that addressed issues around loading and delivery ensuring that all the necessary requirements are met, and that all potential issues are properly addressed.
    • Shipment Delivery: (see above)
    • Invoicing & Payment: All of the companies had adopted an online invoicing and payment system, where the shipper has total access and control over their account, perhaps negating the need for a personal touchpoint at this stage in the consumer journey.
    • Dispute Resolution: A similar pattern of automating the dispute process has largely negated the need for a personal touchpoint if there is a dispute between the parties, with the invoicing & payment software of most of the companies allowing shippers to lodge disputes independently, along with all the supporting paperwork. The process that is to be followed in a dispute is another consumer resource within the consumer portal, so consumers can independently access this information without further reference to the company.
  • What was interesting in the case studies presented is no company seemed to be motivated to focus on these key touch points in the consumer journey. There was an overwhelming trend on the part of the railways towards using technology rather than human resources at the majority of these touchpoints. This finding may be a result of the information that requires a login simply not being available.
  • It may be that as technology advances around AI and machine learning they become options for the railways at some of these touch points.

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