Q&A: New Conrail president sees ample intermodal opportunities in Northeast

Brain E. Gorton, Conrail’s president and chief operating officer since April, recently chatted with FreightWaves about his vision for Conrail, a U.S. Northeast terminal railroad jointly owned by CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC). As described in an October 2019 FreightWaves piece, Conrail “performs car switching and yard classification work for its two owners, Norfolk Southern and CSX. It does not bill shippers or participate in the waybill. Strictly speaking, it serves as the railway local operating agent for its two owners.”

Gorton began his railroad career at Conrail, serving as a conductor in 1987. He most recently served as general manager of Union Pacific’s (NYSE: UNP) Houston and Gulf Coast service units. He succeeded Timothy Tierney, who retired.

This question-and-answer interview was edited for clarity and length:

FREIGHTWAVES: What’s your vision for Conrail?

GORTON: “After coming back after 30 years, it’s great to see the growth. What North Jersey looked like 30 years ago looks nothing like what North Jersey looks like today. The amount of intermodal business that has come to the area — not to mention the growth in the oil trains, the garbage trains — is exciting to see.

“The vision is really to enhance customer service. And I know that sounds tongue-in-cheek, but the reality is that we provide world-class service to the customers we serve and to the owners that we represent. We are the face of both the CSX and the Norfolk Southern. We want them to know that their service has been provided in a quality, efficient manner by the Conrail team supporting the owners, both the Norfolk Southern and the CSX.

“Number two, I really want to look at the quality of life for our employees. I look at where some of our extra-board employees are working the extra-board list. [Editor’s note: Extra-board employees are those under special terms and usually don’t qualify for benefits or entitlements.] I want to improve their quality of life. I want to level load that work so the extra boards aren’t taxed the way they have been. We have a pretty aggressive hiring plan in place, and we’re looking to get some good, quality people on property.

“And when it’s all said and done, ultimately I’d like to grow the business. We’re at a perfect time in rail history to do so. I look at the infrastructure, especially in the Northeast, and it’s aging. It’s in dire need of some infrastructure improvements. And I believe not only Conrail but the rail industry itself is poised to handle those raw materials to get to these worksites to modernize, update and improve the infrastructure that is no doubt aging over the years. The average structure in the Northeast — it’s not uncommon to have bridges that are upwards of a hundred years old and it’s time to renew and replace and we’re poised to make that happen.”

FREIGHTWAVES: What are some ways that Conrail is thinking of to enhance customer service?

GORTON: “I call it leading measures. … What did we do to get those cars there in a timely and efficient manner? It starts with the arrival of the trains and then the components to get those cars on appropriate locals going out. The time between touch and the flat switching yard, the hump yard. How quickly can we flip the crews from the classification yard out to the departure yard back in? Modernization of some of the equipment we have. How can we be more efficient to improve the customer experience?”

FREIGHTWAVES: What challenges do you see for Conrail and the freight rail industry in general?

GORTON: “I think the biggest challenge we have right now is getting people. Quality people on property. Not to make it a political discussion, but we have to make it enticing for people to walk away from the government subsidies they’re getting and get them back into the workforce. …

“We have to have the right people apply for these jobs and get them on board. We are interviewing 200 to 300 people to get 20. We’re trying to attract the right people to fit into this industry.”

FREIGHTWAVES: What opportunities do you see for Conrail and for the rail industry in general?

GORTON: “I think the opportunities are definitely in the intermodal business. It looks to me like a huge growth engine for the country. Not only for the Class IIIs but for the Class Is. If you look at the Amazons, the Costcos of the world — as they grow, so does the intermodal demand and I think it’s a great problem to have. We have to make sure we have enough equipment to support that growth and the right people in place to move it. So, as I look across the entire network, including Union Pacific, which I just left, the focus on intermodal is crucial at this time.”

FREIGHTWAVES: Are there any challenges to meeting intermodal growth in the Northeast?

GORTON: “I would say the challenge is getting the right equipment in place to move it. You’ll see what our owners are doing. You’ll see them repositioning equipment to make sure they’re protecting the outbound loads. … So, I would say the allocation of equipment and then meeting demand. …

“For the trucking industry, you’ve got to make sure they have the ample amount of chassis to do what they need to do locally to get them to the rail yards and out. So, I would say that the equipment is critical.”

FREIGHTWAVES: How is port congestion now? Has it improved since earlier this year?

GORTON: “It actually has. There is a great dwell initiative that’s been happening at not only our major production yards but also at our terminal yards. We’re striving for sub-20-hour dwell. You’re seeing Oak Island Terminal in Newark hitting that on a regular basis, averaging about 20 hours of dwell, which is absolutely tremendous, which just opens up capacity for the inbound trains coming from our owners.”

FREIGHTWAVES: In addition to intermodal, what are other opportunities?

GORTON: “You’re seeing growth in North Jersey and Staten Island [where] you’ll see the containers of trash moved from the country. You’re seeing the oil moving down from the North Dakota, South Dakota area coming off the CN — you’re seeing that especially with the Phillips 66s of the world. You’re seeing that type of growth. Even at the smaller ports. You look at the Port of Paulsboro in South Jersey — that has a tremendous growth opportunity as well. No matter where you look in the New York, New Jersey, North Jersey, South Jersey area, there’s opportunity for growth, and I think we’re in a great position to handle that.”

FREIGHTWAVES: Anything else you’d like to add?

GORTON: “I had an interview earlier today asking me how I feel about coming from a Class I to a Class III railroad. You look at Conrail and I don’t see it as a Class III railroad. You look at the infrastructure that we have: We have the New Jersey Transit traversing our railroad, we have major terminals, we have major flat switching yards, we have a dispatching center. Everything you would see at a Class I that is housed right here in Conrail. So, it’s operating on a Class I attitude or mentality.

“At Conrail, I believe we already have a Class I attitude and mentality and so I don’t consider us as a Class III or a short line. I look at us as just as integrated into the business as any of the Class I railroads. So, it’s pretty cool. I was pleased to see that upon my arrival. I couldn’t be happier to be here. It’s nice to be home.”

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