Longevity is common in the railway supply business, even though many companies have been through the merger and acquisitions process. Louisville, Ky.-based Road & Rail Services marks 30 years in this industry in 2016.
Railway Age Editor-in-Chief William C. Vantuono asked Vice President Sales and Marketing Brian Koontz to talk about the company’s business strategy and growth prospects.
Railway Age: You have three principal lines of business: Plant & Terminal Operations, Train Services (Industrial Switching, Short Line Operations, Unit Train Handling) and Product Handling (Automotive, Intermodal and Bulk Commodities). Plant & Terminal alone covers just about every commodity. In what areas have you experienced growth? What areas have experienced softness? Can you share some business trends that may affect you?
Road & Rail Services: We have been very fortunate with each of our core business units this past year. Our growth with each principal line of business has overall been very positive. The automotive handling portion of our business has experienced steady and solid growth. As you may be aware, the automotive segment has set industry sales records for the past couple of years and is currently enjoying seven consecutive years of increase. The difference in where the growth is in the auto segment is the shift in a specific customer’s business and the balance in the sales of trucks and cars mix.
We have also experienced steady growth with our switching and train handling business. This is a key strength for us with our customers. We are successful in improving a customer’s overall operation by identifying distinct areas that will improve their operating velocity. As a service provider, we find that through this specialized process our customers greatly enjoy the savings we bring to their business. Every customer we speak with always has key tasks at the top of its business “to-do” list, regardless of the commodity. First is always safety, followed by improving network velocity and helping identify network cost savings. Our day always begins and ends with safety in mind—for our operations that is a must.
Our approach is to ensure that we understand the customer’s perspective and concerns. By understanding the concerns, we can identify direct opportunities that will improve their daily business operations. This is when we begin to capture costs savings or cost reductions for the customer.
A current trend across all product lines is for customers to integrate their service providers into their business. We find that our customers are interested in meeting with the local Road & Rail Services team to help them solve their issues. We thrive on the challenge of identifying opportunities and providing solutions for our customers. Oftentimes, our business discussion begins with a specific concern, and through further discussion, we identify other key opportunities to improve their business. Through this process, we become a true partner.
RA: Describe your locomotive fleet. Are there any plans to purchase and/or lease new power? If so, what types of units are you looking for?
R&RS: Our fleet is based upon our customers’ specific needs and situation. Road & Rail Services takes a “customized and all-inclusive” service provider approach with each customer. We ensure that the equipment provided will be able to deliver the promise of service. When we lease our locomotive power, that allows us to better focus on the service we deliver to the customer. We closely work with our leasing partners. They understand our needs, and that enables us to find exceptional units with great flexibility.
We are excited that we have a current steady customer base and are foreshadowing growth within our locomotive fleet. Frankly, the specifics for these will vary by customer, but the good news is our projected growth.
We always balance the cost of ownership between purchase and lease. As always, we want to capture the operating characteristics of our locomotives that provide the balance between optimal track performance and fuel economy. The keys for us in the selection of equipment are safety, reliability and performance. We ensure that we deliver this for our customers.
RA: Describe some of your technology for railcar handling and processing, loading/unloading, security, etc. How has your technology evolved? For example, are you using wireless devices like tablet computers?
R&RS: Systems and technology have been one of the fascinating growth areas of our business. Everyone is looking for the better mousetrap: How can I best track my operations? As we all know, you can’t manage what you can’t track. Our goal for our customers is to give them tools that will allow us to track, manage and improve our daily performance. Really, for Road & Rail Services we believe that systems and technology are a core strength that we possess and a service that we offer customers, which in turn provides them savings in their daily operations.
The desire for better tracking leads to better analytics for our customers. Have wireless devices become a key part of our core business? The short answer is yes. The technology we provide is programmed to drive yard and network velocity. This improvement in our systems has helped preserve the condition of the cargo for our shippers. We offer hardware solutions to ensure data flow, enhanced communication of processes with both the railroads and shippers. Our system provides data warehousing that allows an enhanced trending of information. Our business intelligence tools allow our customers to extrapolate their information.
As we celebrate 30 years in business, as a service provider for multiple industries, we follow a basic strategy that has served us well:
• Recruit, train and retain exceptional people.
• Provide industry-leading processes for operations and service delivery.
• Deliver a services strategy that has a relentless focus on safety.
• Be an information-based decision-making business.