Kansas City Southern touts Precision Scheduled Railroading, pandemic-related operational improvements

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Locomotives at the front and rear of a freight train
With a GE up front and an EMD distributed power unit shoving on the rear, a southbound Kansas City Southern merchandise train runs over the Laredo Subdivision near Realitos, Texas, in November 2017. KCS is making more use of distributed power to boost train length across its system.
Bill Stephens
KANSAS CITY, Mo. – Kansas City Southern officials on Tuesday outlined a host of operational changes that have made the railroad faster, more fluid, and better able to handle traffic growth.

KCS says its implementation of Precision Scheduled Railroading provides a balance between growth and customer service on one hand and reducing costs and better using locomotives, cars, and crews on the other.

And the improvements in average train speed and terminal dwell at KCS since October 2018 have outpaced the rest of the industry, railroad officials said on a webcast with Citi transportation analyst Chris Wetherbee.

The pandemic and related traffic decline in April and May accelerated operational changes and trends that were already under way on KCS and the other Class I systems. KCS executives say those changes – including moving tonnage on fewer but longer trains, using less horsepower per train, and tightening connections between trains to keep cars moving – will be sticking around even as volume recovers.

Before the pandemic hit, KCS was operating two pairs of daily merchandise trains between Kansas City and its hub in Shreveport, La., for example. The trains, symboled M-KCSH and M-SHKC, averaged 6,694 feet.

When traffic fell in April and May due to the unprecedented economic impact of the pandemic, KCS scaled back to one train in each direction daily. But when volume began to return in June, service did not go back to twice daily, or 28 train starts per week.

Instead, KCS boosted train length by 40%. The railroad now runs daily 15,000-foot northbounds that exceed siding length. Southbound, KCS builds trains up to 10,000 feet so that they can still fit in sidings. The southbounds run 10 times per week, giving KCS a total of 17 train starts per week, or 11 fewer than before the pandemic.

“We’ve got plenty of 10,000 foot sidings to put those smaller trains into,” says Olivia Daily, vice president of purchasing. Locomotives and crews are balanced between K.C. and Shreveport using other trains.

KCS plans to build 14 extended sidings – seven in the U.S. and seven in Mexico – that will give the railroad the ability to meet 12,000-foot trains, says Sameh Fahmy, executive vice president of precision scheduled railroading.

KCS executives say the operational changes that have improved average train speeds and cut terminal dwell time are not just about reducing costs. They’ve improved service and enabled the railway to grow under its mantra of “service begets growth.”

The 25% faster cycle times for unit grain trains that link Midwest origins with destinations in Mexico, for example, freed up 600 hopper cars. Rather than sell or scrap the cars, KCS sought to put them to work. “We’re constantly looking for opportunities to sell into the capacity created by the operational improvements,” says Cary Tippins, assistant vice president of international asset utilization.

The result: KCS won new grain business from the Port of Veracruz to Mexico City, saw growth in grain exports from the Midwest to Apaseo and Monterrey, Mexico, and gained domestic U.S. soybean meal shipments, all using the surplus cars.

KCS has taken several steps to improve fuel efficiency, including reviewing locomotive needs by train type and line segment. Five districts in Mexico now carry lower horsepower per ton ratios, for example, and similar reviews are under way on other line segments across the system to better match power to tonnage, says Chad Devenney, assistant vice president of operating practices.

Increased use of distributed power has helped boost train length by 20%, reduced the number of locomotives needed, and helped reduce the number of train starts.

On the mountainous route from the Port of Lazaro Cardenas to Morelia, Mexico, running heavier trains – particularly by combining manifest and intermodal traffic – has improved fuel efficiency 19% compared to 2018. Overall, KCS has improved its fuel efficiency 8% in the past year.

Moving tonnage on fewer but longer trains has enabled KCS to reduce its active locomotive fleet by 30%, or 319 units, since the end of 2018. The resulting fleet is newer and much more reliable, with road locomotive failures down by 54%.

To ease congestion at the U.S.-Mexico border, KCS aims to do away with the six-hour directional windows at its single-track International Railway Bridge in Laredo, the busiest rail border crossing in North America.

KCS has taken several steps to improve fluidity at the bridge over the past few years, including joint customs inspections and the use of international crews that shift the crew-change point from the bridge to Laredo Yard.

“Those did a lot to speed up velocity while you’re actually on the bridge, and greatly reduced the time it took to get across the border and allowed us to put more trains in a window,” says Mike Walczak, vice president of network planning and finance.

But the directional windows remain an unacceptable source of delay and congestion, he says.

Anywhere from 23 to 30 trains use the span per day. If a southbound arrives just as the window shifts to northbound traffic, the train typically incurs at least a six-hour delay. KCS wants to adopt a “ready train” strategy that would coordinate movements across the bridge based on which trains arrive first.

KCS is working with U.S. and Mexico customs officials, along with interchange partner Union Pacific, on technology and process improvements that will provide better visibility for bridge-bound traffic and speed customs inspections. These changes will allow KCS to abandon the directional windows as a near-term solution as cross-border traffic grows.

Ultimately, KCS wants to build a twin single-track span across the Rio Grande that will permit directional running across the border. President Donald Trump last week issued a presidential permit for a new span. But a new bridge is at least two years away as engineering work and further permitting is required.

“That bridge that we have today has a velocity of 1 mph. Think of what it’s doing to the rest of the network and how much it’s constraining our 17 or 18 mph from getting to 20 or 21,” Fahmy says.

The new span might cost $60 million, Fahmy says, adding that’s not a lot of money for the operational benefits it will bring by eliminating the need to stage trains on both sides of the border.

Fahmy says the operational and cost improvements at KCS, combined with growth in cross-border traffic, should mean that the railway can ultimately have the best operating ratio in the industry. It’s only a question of when, he says.
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