February 22, 2019 – Precision scheduled railroading, or PSR, is the most-discussed strategy in North American freight railroading today. The concept of scheduled railroading (versus tonnage railroading) has been around for some time, but the specifics of PSR have come into focus due to the vision of the late E. Hunter Harrison. As the CEO of first Canadian National, and subsequently Canadian Pacific and CSX, Harrison restructured these railroads based on his PSR operating strategy.
While controversial, mostly due to some negative impacts on customer delivery and service reductions, all three of the railroads saw significant improvements in their operating ratios and stock prices. In the last 18 months, most of the other class I railroads have committed themselves to developing operating plans that put PSR at the core of the operation.
Much of the talk about PSR assumes that we know what it is. To make a complex concept simple, I suggest that precision scheduled railroading can be described in four bullet points:
- Trains are operated according to their schedule and not held in yards to add more cars.
- Car velocity is more important than train velocity; origin to destination car trips take precedent over train performance.
- A railroad should run more manifest trains, mixing merchandise, auto, intermodal and other classifications on the same trains; reduce the number of unscheduled unit trains.
- Maximize asset utilization, including network, locos, cars and crews.
To put the idea into a single sentence, PSR seeks to provide customers a more reliable, predictable and cost-effective shipping experience by creating train operating plans that seek to speed cars through the network, with the most efficient use of assets.
Not all aspects of PSR are without controversy. There are shipper and regulatory concerns that in their efforts to reduce assets, the railroads will apply too little to capital spending. Other concerns relate to quality of customer service and responsiveness to shippers. I also see a disconnect between the elimination of hump yards and the focus on car velocity. If an operating plan is properly designed (with a reduction of car handling in mind), hump yards are not, in themselves, an impediment to the goal of dwell reduction. Yard operation to a better plan is needed.
But my core message to you is – You can’t adhere to a PSR operation without an appropriately designed operating plan. Sometimes called a train plan, the PSR operating plan must be designed from the ground up, and as an integrated plan.
In our next post, we will discuss the key elements of an operating plan, the types of tools needed for your Service Design group, and how this approach can lead you towards a well-planned PSR operation.