Q&A with railroad technologist Steve Ditmeyer

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Steven Ditmeyer
Steven Ditmeyer’s long career in railroading and related industries began as a transportation trainee for the Missouri Pacific Railroad. He has been a transportation economist at The World Bank; chief engineer of research, communications, and control systems at Burlington Northern; and held positions with the Federal Railroad Administration. He is currently the principal at Transportation Technology and Economics, an industry consultant.

Q: As a longtime participant with and observer of railroads, what is your opinion of the state of the overall industry?

A: The railroads are quite profitable these days. Most of the big ones have adopted Precision Scheduled Railroading, which in my view is neither precision nor scheduled. It’s rather a phrase to describe a strategy that involves reducing the asset base of the railroads, tearing up double track, closing yards, closing shops, closing intermodal terminals and so on, and reducing operating costs by running fewer, longer trains.

As such, railroad traffic is remaining, I think, quite constant, but railroads are losing market share vis-a-vis trucks, and there’s no growth in traffic now.

There’s only one railroad that has not adopted Precision Scheduled Railroading, and that’s BNSF. [Retired BNSF Executive Chairman] Matt Rose has given some excellent explanations of why they’re not doing it. The other railroads that have adopted Precision Scheduled Railroading seem to be focusing on near-term profitability ... and reducing their operating ratios. But their CEOs do not focus on long-term infrastructure investments.

None of the PSR railroads ever mentions using [positive train control] to help them implement their so-called Precision Scheduled Railroading. Only BNSF is talking about taking its existing PTC system and enhancing it, [by] going to moving blocks, getting rid of wayside signals, integrating their PTC system with locomotive health reporting, maintenance of way operations, precision dispatching, and so on.

All the big railroads each spent about $2 billion on PTC, but only BNSF at this time seems to be focused on getting the business benefits from that investment.

Q: You’re talking about the overlay type of PTC here, as compared with the more advanced systems, correct?

A: Yes. Even these overlay systems all involve GPS receivers on locomotives. The GPS receivers can give real-time train location and speed information. And the railroads seem not to be using that real-time, speed and location information.
There’s a great concern about customer service. In fact, Union Pacific issued a press release [recently] announcing 475 people being laid off, because they’re having difficulty with provision of service and with congestion on their lines. So their solution was to lay off people. And there was no mention in this press release of “We’re going to use the continuous real-time information from our PTC system to help us manage our railroad better.”

Q: Can you expand on that? How would this information be of use to them?

A: Dispatchers on most of the railroads are still working from a traditional centralized traffic control board. They know what block a train is in. They know when a train enters the block and when the train leaves the block, but unless the dispatcher has a stopwatch, they don’t know how fast the train is going, and therefore they don’t have a prediction of when the train will arrive, either at meet points or at their terminals.

The continuous real-time information from GPS [tells] them precisely where things are and precisely how fast they’re going. This gives the railroad a better opportunity to forecast arrival times at meet points and junctions and terminals. It’s information management. So many of the railroads viewed PTC simply as an advanced signal system, rather than really an advanced communications network that gave better quality information.

The challenge is better service to customers. One of the big railroads a few months back called me and said, ‘You know, we’re having difficulty telling our customers accurate information on when our cars are going to arrive.’ Giving better information to customers helps with several things. One is better service you can charge a little more for, and it encourages the shipper to send more business your way. As far as laying off people, it’s just, starting with Hunter Harrison and now some of the other railroads, it’s just “We’re going to lay off people. We’re going to cut our operating costs.” The strategy of laying off people is only to improve the operating ratio.

With this accurate information, you can do a better job of asset management. Knowing when locomotives will become available at other terminals, you could do a better job of crew management, freight car utilization, and so on. Better asset management comes with the better information.

Portions of this interview were originally published in the July 2019 issue of Trains.

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