Union Pacific CEO: PSR is dead. Long live PSR.

Credit: Pixabay

LOMBARD, Ill. — Precision-scheduled railroading (PSR) is an outdated phrase, Union Pacific Railroad CEO Lance Fritz ​told the Midwest Association of Rail Shippers’ Winter Meeting in Lombard, Illinois, Wednesday. The concept has morphed from late CSX CEO Hunter Harrison’s prescriptive playbook to fundamental principles, which Fritz laid out as: “Don’t do work you don’t have to.” Move cars as deep, as quickly as you can. Have one primary service instead of boutique services. Think of the service as a conveyor belt. Use assets wisely. Union Pacific has completed much of the conversion work, which started in October 2018 and resulted in 500 job cuts. During the railroad’s operational shift, Fritz said conversations with customers were difficult. The question now is, will 2020 bring smoother sailing for Union Pacific shippers? Fritz said yes, for those that are ready to work on the railroad’s terms — adding that some shippers took the changes in stride and some are still angry, more than a year later. “Our service experience is fundamentally different today,” he said. The PSR playbook has served the railroad well so far , said Fritz. As of October, terminal dwell was down 20% year-over-year for the third quarter. Freight car velocity was up 10%. Trip plan compliance was up 10%. And the benefits go deeper than stats and scores. A year ago, a massive snowstorm severed the railroad’s East-West mainline — a line that sees roughly 60 trains a day. Fritz called it one of the biggest challenges Union Pacific has ever had to overcome “We just did not have the capacity to find alternative routes for all of that traffic,” he said. The CEO credited the railroad’s Unified Plan 2020, rooted in PSR principles, for a relatively quick recovery to regular service. A recovery that would have taken three to four months before took just five weeks, he said. PSR may be an outdated term, according to the CEO, but based on his description of Union Pacific’s 2020 plans, that’s only because it’s no longer new or novel — it’s the norm. How the railroad will fair in 2020 is less certain due to dips in freight volume that have affected all Class I railroads to varying degrees. Fritz, one of the more optimistic railroad CEOs in terms of volume expectations, said he expects this year to be better than the last. The state of the railroad’s operations, said Fritz, is what drives his optimism. Union Pacific will announce its full-year 2019 results Jan. 23.

Credit: Pixabay    Author   Emma Cosgrove   for supplychaindive.com @emmacos   Published Jan. 16, 2020  

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