By Tom Steinert-Threlkeld  |  Posted 2005-04-06 Print this article Print

The freight hauler used to rely on masterly improvisers such as Roy Thigpen and Charlie Grady to get its trains through. Now, it has novices—and software.

Dwell Time'">

Dwelling On 'Dwell Time'

One key measure of whether the One Plan is working, he says, is "dwell time." This is the time a freight car spends in a rail yard before being attached to a new train and sent on its way.

In December, dwell times went up every week in the CSX system, according to railroad performance measures kept by the Association of American Railroads. For the week ended Dec. 10, dwell times were 27.5 hours. Then, 28.0 hours the next week, then 30.6 hours, then 41.3. Dwell times dropped at the start of the year, but went back above 30 hours in the last week of January and every week in February.

Broughton calls the performance "abysmal.'' Not only are dwell times up, but train speeds are down. CSX will only be able to get additional revenue by increasing its prices—until it improves efficiency, the analyst says. Otherwise, CSX cannot handle any more traffic, curtailing revenue growth.

One area where the pinch can already be felt is in CSX' automotive freight business. After CSX ran its blocks through the MultiModal software, "we came to the conclusion that we had to restructure how automotive business was handled,'' says MultiModal president Carl Van Dyke.

Before the software ran its algorithmic analysis, most auto freight was processed through a rail yard in Cincinnati. But autos are expensive and easily damaged. Which means they must be handled carefully—and slowly.

The software identified unused capacity at Louisville, Ky. Now, Louisville handles auto traffic coming out of auto plants in Southern states and heading for the West. A yard in Walbridge, Ohio, takes output from Michigan and Ontario plants. A Columbus, Ohio, yard also helps out.

Has it helped?

Clarence Gooden, CSX' chief commercial officer, reported in January that the company's auto revenue in the fourth quarter was $218 million, down 4.4%, or $10 million, from a year earlier. Light-vehicle production in the U.S. was up 3% from the previous year—but downtime at CSX-served plants was "more than four times that of the fourth quarter of 2003,'' Gooden said.

One place where One Plan has clearly come through is in disaster recovery, according to transportation applications director Kathleen Brandt and assistant vice president Dharma R. Acharya, an operations researcher. CSX is based in Florida and, last fall, three major hurricanes disrupted operations, almost back to back to back.

"Because it is an outdoor sport, there's a lot of variability,'' says John L. West, president of CSX Technology.

In the past, such sport would have knocked CSX' roads out of commission for two months. Instead, it took just two weeks to fix rails and resume normal, scheduled operations.

Undetermined, to date, is whether CSX will achieve two major benefits touted by proponents of the One Plan: saving 1.5% of the miles its cars must travel each year through better routing, and cutting by 5% the number of times each car must be handled as it moves through rail yards toward a destination.

Part of this uncertainty is because the first phase of the One Plan concentrated on scheduling CSX' main long-distance traffic. In the second phase, just now beginning, the efficiency drive will focus on local railroad operations.

That means a lot of idiosyncratic knowledge, held in the head of managers like Thigpen, has to be built into the scheduling system. For instance, until now, models have continually shown that more traffic should be moved through the Atlanta yard.

But managers knew that wasn't the case, Brandt says. Why? Getting over the hump. In yards like Atlanta, cars are pushed over humps and thus slide into place on a new train.

In Atlanta, hump A has a physical limit: It can only handle 42 cars at a time. That makes it hard to create long trains—a factor not taken into account by the system out of the box.

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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