Death of Conrail legend recalls bygone days of railroad business

Death of Conrail legend recalls bygone days of railroad business

The recent death of Sen. Robert Dole was time for reflection on a man who personified what Tom Brokaw called “The Greatest Generation.” Although this historical cohort has been ravaged by time, their significance remains undiminished, and, similar to Bob Dole himself, their accomplishments — and the manner in which they achieved them — stand in stark contrast to our current condition.

Ironically, on the same day — Dec. 5 — as Bob Dole’s passing, an icon of our industry, Richard B. Hasselman, former head of operations for Conrail, passed away. And while I would not seek to equate the two men, Dick Hasselman stands out for what he accomplished during his career, and how that stands in contrast to accepted norms today.

For those of us who worked at Conrail (“ex-Cons”) during his tenure, Hasselman was often an object of fear. Similar to Donald Rumsfeld’s “snowflakes,” his hand-written, scrawled questions were known as “Hasselgrams.” However, just like his staccato-like questioning during morning conference calls, they were driven by an intolerance for failure, sloppiness, or wasted money.

I first met him only three months after I started, when as a financial analyst, I found $7 million in unbilled charges to another railroad. At a time when Conrail was losing $1 million every day, he wanted to know how such a control weakness had gone undetected for so long — and how quickly his subordinates would solve it so that it would never happen again. He also constantly followed up with me to make sure that these charges were rebilled — and collected.

For his generation, railroading was a calling — not just a job. He had an incredible mind for detail. His knowledge extended to other systems as well. There are stories of business car trips on other railroads where he seemed to know more about where they were traveling than his host railroad counterpart.

He was also the personification of the apocryphal anecdote of firing people today and wondering why they were not at work the next morning. This style of management, heavily focused on the micro-management of details, is eschewed today. However, to some, there is a belief that “kinder and gentler” has created a collective culture of accepting a certain degree of failure as inevitable — and that a cultural atmosphere has evolved whereby nobody is ever held responsible.

Today’s railroads are much larger and complicated enterprises than they were a generation ago. When BNSF CEO Matt Rose discontinued the companywide conference call, it was a reflection that the scale of merged railroads had obviated the need for that tradition.

Hasselman’s obituary omitted the fact that he had an MBA from New York University – a fact that he seemed to want to keep secret himself. When I joined Conrail, there were consultants and MBAs everywhere. Much to his frustration, McKinsey (and numerous other firms) was charging astronomical fees to repackage existing ideas of current personnel. He believed that given sufficient resources — that had heretofore been unavailable — that there was nothing that could not be achieved without outside “expertise.”

Open to new ideas

Despite his old-school persona, I found him open to new ideas. When double-stack started, the equipment was not certified for interline movement. However, he allowed it to move on Conrail. Unlike many of his peers, he believed that information technology was essential to enhance execution, reduce cost, and improve service. He was exceptionally proud that he had personally designed the 80-column DICCS (Demurrage and Industrial Car Control System) computer punch card.

Precision scheduled railroading had nothing on his generation of railroaders. Managers who got ahead were those who could cut the most costs the fastest. When deregulation allowed accelerated line abandonment, Hasselman immediately recognized the cost-cutting opportunity. However, rather than blindly chopping to minimize costs, he worked with his commercial peers to maximize profit. Together, Conrail created the short line industry by converting “Light Density Lines” into traffic extensions that preserved business — at increased margins.

I believe his greatest contribution was recognizing that intermodal was the future for Conrail — and that it required excellent service for every load. Hasselman was all for reducing costs — but he never allowed cost-cutting to impact intermodal service in any way. He and his core lieutenants, Elmer Priebe and Don Swanson, reinforced this doctrine throughout the Operating Department. He was immensely proud that Conrail, in 1987, was the first railroad to handle one million intermodal shipments.

Hasselman not only believed that you needed to spend money to make money, but that improved service lowered expenses. Core lanes required seven-day service — and intermodal ramps needed to operate 24-7 to support them. Circus ramps needed to be mechanized in order to grow and he supported those investment efforts by reducing switch crews — and not affecting service. When the company considered an “on-time or on us” commercial initiative, he committed to achieving that level of service.

Hasselman also believed that intermodal needed to be truck competitive and he raged against schedule padding. Today, CSX and Norfolk Southern both run trains along the same routes that Conrail did; however, not only are schedules longer, but the on-time performance is not as good. Yes, volume is higher, and trains are longer, but Conrail ran long trains without the technological advancements that are common today.

Hasselman’s career originally started in marketing, and he was incredibly customer-focused. Not only was he a regular at shipper events, but he took on leading sales roles with major intermodal accounts, such as USPS, UPS, and APL. He personally assured them that they could entrust their business with Conrail. He relished the opportunity to take them on business car trips to show off the railroad’s capabilities. I do not know how he would have dealt with social media; however, I am sure that he would never post and fail to respond to customer replies, as is common today.

Similar to the Greatest Generation, it is impossible to compare specific situations and outcomes. Our country has undergone major cultural and societal shifts, and railroads are no exception. However, as railroads have transitioned from close to bankruptcy to enormously profitable in just 40 years, it seems appropriate to consider how the treatment of all stakeholders — not just Wall Street — has changed. The passage of those who led us previously seems like an appropriate time to consider what could be.

Theodore Prince is chief strategy officer and co-founder of Tiger Cool Express. Contact him at ted@tigercoolexpress.com.