RAIL PROFIT RESPONSIBILITY AND PROFIT MEASUREMENT: REORIENTING DEPARTMENTAL STRUCTURES AND INFORMATION SYSTEMS TO THE COMTEMPORARY DEREGULATED RAILROAD ENVIRONMENT

The Staggers Act of 1980, by increasing freight railroad exposure to competition, substantially affected the need for, and uses of, profitability data. While consulting on profit data issues, the authors found that the questions of (1) how successfully and completely rail profit measurement systems meet contemporary needs and (2) how these systems affect rail management (including devolution of profit responsibilities and use of profit criteria in employee evaluation and compensation) is not well addressed in the transport literature. To fill some of these voids, the authors interviewed seven Class I carriers. The study concludes: First, the kinds of profitability information needed have dramatically changed. Line-of-business marketing, tapping resources across departmental lines, has largely displaced hierarchical arrangements. Pricing and operational managers now are expected to be directly concerned with profitability and need detailed information to support their decisions. Second, due to these changes, the key management issue related to profitability information has been how to achieve major concurrent improvement in accuracy and specificity, timeliness, and user access. Third, improvements in accuracy and detail, timeliness, and accessibility of profit data are reinforcing changes in rail management. Further broadening of profit responsibilities is continuing. Finally, profit measurement requires continued improvement. Existing systems fail to meet current needs completely. Conflicts among accuracy, timeliness, and accessibility require resolution, and greater effort is needed to achieve consistency among related systems. The continuing evolution of profit responsibilities is creating demands for new and expanded reporting. Profit management systems are now expected to address equipment and other investment issues, perform "what if" studies that assume changing operational patterns, and assist with incremental pricing. Despite substantial adaptation to a more competitive rail environment, massive changes in profit measurement systems will extend well into the 1990s.

• Record URL:
  https://catalog.hathitrust.org/Record/001070572/Home
• Availability:
  • Find a library where document is available. Order URL: https://www.library.northwestern.edu/find-borrow-request/requests-interlibrary-loan/lending-institutions.html
• Authors:
  • Lawrence, M B
  • Sharp, R G
• Publication Date: 1989

Media Info

• Features: References;
• Pagination: p. 38-46
• Serial:
  • Journal of the Transportation Research Forum
  • Volume: 30
  • Issue Number: 1
  • Publisher: Transportation Research Forum
  • ISSN: 1046-1469
  • Serial URL: https://trforum.org/journal-of-the-trf/
• Publication flags:

  Open Access (libre)

Subject/Index Terms

• TRT Terms: Accuracy; Competition; Deregulation; Information systems; Information, data, and knowledge; Management; Measurement; Profitability; Railroads; Reports
• Uncontrolled Terms: Data needs; Reporting; Responsibilities; Timeliness
• Subject Areas: Administration and Management; Data and Information Technology; Highways; Railroads;

Filing Info

• Accession Number: 00490252
• Record Type: Publication
• Files: TRIS
• Created Date: Dec 31 1989 12:00AM