Case Study
Largest North American Class I Freight Railroad Transforms Its Post-Merger Organization and Operating Processes, Improving Service and Market Share While Generating $157M+ in Cumulative Profit Improvement
$157M+
Cumulative Profit Improvement
Strategic Imperative
To increase shareholder value by $56M through service improvements that enhance market share, internal process optimization, and elimination of post-merger subcultures
Client Background
- Rail network spans more than 32,500 route miles across 28 states and three Canadian provinces, supported by approximately 35,000 employees
- Post-merger operating scope spanned organizational structure, train crew utilization, service reliability, and core rail processes across the network
- Network performance depended on coordinated train plans, crew deployment, asset utilization, measurement standards, and front-line supervision
- Economic growth increased freight capacity demand, intensifying pressure to improve service reliability and network efficiency
- Improved service reliability and market share were critical to increasing shareholder value across the newly combined railroad
- The merger combined two historic railroads with 150-year-old cultures, but the post-merger structure remained unimplemented
Key Issues & Barriers
- Management and employee goals were poorly aligned, weakening accountability for service, market share, and operating efficiency
- Core rail processes were missing, only partially utilized, or inconsistent across legacy operations
- Existing work methods created non-value-added activity and underutilized train crews and network assets
- Measurement standards were inadequate, limiting visibility into service, plan attainment, staffing, and operating performance
- Deeply ingrained legacy subcultures impeded integration and consistent execution across the newly combined railroad
- Supervisory roles and responsibilities were unclear, limiting front-line ownership and performance control
Key Implementation Components
- Established clear goals to align management and employees around service, market share, and operating-efficiency priorities
- Realigned and streamlined the organizational structure to clarify roles, accountability, and post-merger operating ownership
- Improved train crew personnel utilization to increase productive capacity and reduce underutilized network assets
- Eliminated non-value-added activities and standardized core operating processes across the newly combined organization
- Implemented automated reporting and standardized measurement practices for on-time performance, plan attainment, staffing, and asset utilization
- Created a continuous improvement process extending from senior management through front-line supervisors
Benefits & Results
$157M+
Cumulative Profit Improvement
87%
On-Time Performance Improvement
19%
Plan Attainment Improvement (Right Train, Right Day)
25%
Staffing Reduction