KCS' shift to Precision Scheduled Railroad seen as key to growth
February 26th, 2019
February 26, 2019 - TRA Newswire -
Kansas City Southern's CEO Patrick Ottensmeyer, speaking at the Citi 2019 Industrials Conference, indicated that Precision Scheduled Railroading (PSR) implemented in late 2018 has already helped to increase efficiency throughout its network.
KCS's changes in operations began by combining traffic into longer trains. Coupled with improved terminal operations at the Laredo, Texas, bi-nation gateway, has enabled KCS to store 50 locomotives and about 2,000 freight cars.
Ottensmeyer indicated that the implementation of PSR can raise concern with customers, employees and regulators but told investors last week that “there’s nothing about the way we’re going to move forward that is inconsistent with our values and culture." He expects KCS to meet growing demand with the same or fewer assets.
Initial changes with PSR resulted in eliminating 42 crew starts throughout the network that resulted in better labor, fuel and equipment utilization. “You can in fact do more with less if you are running a smoother, more fluid network,” Ottensmeyer said.
KCS expects to see a 3-4% growth in volume and a 5-7% growth in revenue in 2019. Ottensmeyer expects that the operating ratio to be 60-61% in 2021. Capital expenditures are expected to be above 20% this year in the $640-$660 million range.
Ottensmeyer said that KCS had not grown as fast as it could last year because of congestion issues.
Precision Scheduled Railroading was refined by E. Hunter Harrison, former head of Canadian National and Canadian Pacific railroads. The heart of PSR is having an operating plan that allows you to schedule shipments and know how a car is supposed to move, on which trains, to which yards, through what connections and when it will arrive at the customer or interchange.
Kansas City Southern's CEO Patrick Ottensmeyer, speaking at the Citi 2019 Industrials Conference, indicated that Precision Scheduled Railroading (PSR) implemented in late 2018 has already helped to increase efficiency throughout its network.
KCS's changes in operations began by combining traffic into longer trains. Coupled with improved terminal operations at the Laredo, Texas, bi-nation gateway, has enabled KCS to store 50 locomotives and about 2,000 freight cars.
Ottensmeyer indicated that the implementation of PSR can raise concern with customers, employees and regulators but told investors last week that “there’s nothing about the way we’re going to move forward that is inconsistent with our values and culture." He expects KCS to meet growing demand with the same or fewer assets.
Initial changes with PSR resulted in eliminating 42 crew starts throughout the network that resulted in better labor, fuel and equipment utilization. “You can in fact do more with less if you are running a smoother, more fluid network,” Ottensmeyer said.
KCS expects to see a 3-4% growth in volume and a 5-7% growth in revenue in 2019. Ottensmeyer expects that the operating ratio to be 60-61% in 2021. Capital expenditures are expected to be above 20% this year in the $640-$660 million range.
Ottensmeyer said that KCS had not grown as fast as it could last year because of congestion issues.
Precision Scheduled Railroading was refined by E. Hunter Harrison, former head of Canadian National and Canadian Pacific railroads. The heart of PSR is having an operating plan that allows you to schedule shipments and know how a car is supposed to move, on which trains, to which yards, through what connections and when it will arrive at the customer or interchange.