HIGHLIGHTS FROM THE JUNE ISSUE

Breaking News
  • Late Breaking Industry News

Traffic & Market Trends
• Industry Indicators

In This Issue
• New urgency for backup control centers

• Beyond 1 million miles

• SEPTA looks westward

Commentary
• From the Editor: "The amazing speed of one inch per second"

• Point of View: Class I classwork at Notre Dame

Class I classwork at Notre Dame

By Edward F. Hums

In the summer of 2001, I was updating my accounting information systems class at Notre Dame to expand coverage of e-business. While passing Norfolk Southern’s Robert Young yard in nearby Elkhart, Ind., I began considering similarities between railroads and the Internet in how they transport commodities. Packet switching, routers, and high capacity fiberoptic networks are reflections of train compositions, classification yards, and multiple-track main lines. Several days later, I noticed the new e-business text that I selected discusses “disruptive technologies” that reshape the business environment. The authors, Glover, Liddle, and Prawitt, include a brief reference to railroads as one of these technologies.

How does one encourage college students to explore an industry that many consider arcane and obsolete? Some perceive railroads in terms of waiting incessantly at a grade crossing while a lumbering, graffiti-laden train slowly passes. Others relish in relating their worst trip on Amtrak or a commuter line. Still others view railroads as totally devoid of any modern technology, perhaps to go the way of the horse-drawn carriage.

With a course development grant from PricewaterhouseCoopers and the assistance of several Class I railroads, I created a web-based, semester-long research case covering e-business and railroads. Business students begin not by looking at computerized accounting systems, but rather by writing a brief history of railroading in North America. Geography lessons of grade school are revisited when students discuss obstacles like mountains, lakes and rivers, deserts, prairies, and distances. Discussions turn to the individuals who pushed (and handsomely profited from) the expansion of rights-of-way. Other observations include government regulation (even nationalization during World War I), eventual deregulation, overcapacity issues, recognition of a “golden age,” and periods of mergers, abandonments, and revitalization through regional and short lines.

After reviewing the industry, students concentrate on a specific Class I, and again recount a historical journey. Besides the statistical review of track and performance measures, they discover a corporate philosophy, performance standard, or better yet, a series of core competencies and responsibilities of these major railroads. A commentary on the current e-business practices is required. By selecting a case study, students develop e-business strategies to meet confusing and ever-changing transportation challenges: acquiring cars, assigning motive power, scheduling track, alerting crews, fueling locomotives, tracing shipments, timing deliveries—and when all this is somewhat comprehended, responding to a customer who changes the mix of variables instantly with an Internet order.

Finally, students draw comparisons between the history of the railroads and the Internet. Can one view the history of railroading in North America as a disruptive technology in the truest sense—a precursor for another disruptive technology, the Internet?

Upon completing their case studies, students have developed a healthy respect for the magnitude of railroads and the industries they serve. They describe coal mines or classification yards in dimensions of football fields and trains in terms of miles.

Perhaps more important, students are amazed by the technology currently in place or soon to be deployed by the industry. Students envision further development of Internet-delivered train-cams on all locomotives, real-time information on expected train movement to commuters in autos, Internet auctions for freight services, “value pricing” arrangements to fill empty freight cars, and Internet-based virtual warehouses. One student suggested creating a train operation simulator for grade school students that combines fun with lessons in track safety. Using UPS and FedEx as examples, students expect railroads to use global positioning technology for tracking and displaying the real-time status of trains, cars, and individual shipments via the Internet. One individual expressed his insight that you can only improve locomotive and freight car efficiency so much—the real value-added opportunities are software-based shipping and operating solutions. These creative interpretations from my students show that they finally make the connection between high technology and railroads. Without this connection, no student is likely to consider a career in railroad management.

If there is one thing that perhaps we all forget in our day-to-day labors, it is that we should have a little fun in our careers. My students constantly remind me of this by enhancing their reports with light-hearted images of a family rail vacation, a hometown passenger depot, or perhaps a vintage railroad photo.

Speaking of enhancing our lives, I wonder if this fall Norfolk Southern would consider the loan of a 4,000-hp locomotive to open some holes for our Fighting Irish running backs on Saturdays. One can only hope.

Edward F. Hums is Adjunct Assistant Professor of Accountancy at the University of Notre Dame, South Bend, Ind.