One trend I find that is incredibly challenging is the “Fishing for Information” trend that seems to rise up when we see significant market changes in the industry or new additions to the rail transportation arena. This trend can be when the railroads push for private railcars in certain commodity groups, the raising of rail rates on certain routes or for certain commodities, new mandates from government organizations (AAR/FRA) requiring changes to mechanical requirements of certain railcar types, new railcar designs or specific designs for highly valuable cargos, learning how to interact with the railroads to obtain service from them, the complex world of developing a greenfield site to just plain revamping of existing service parameters that don’t work, to marketing a company’s capabilities, etc. I do appreciate the need to gather basic information so one learns what one doesn’t know before investing in order to obtain market knowledge and expert guidance; however, the challenge becomes: when do you revert to obtaining expert assistance?
First, a classification of what we do and who we are at Tealinc. Here at Tealinc, Ltd. with focus on providing exceptional value and rail support services custom-tailored to meet our customers specific rail needs, we have three main business focuses:
- We buy, sell, lease and broker railcars;
- We then offer a management package for those railcars and through that management package we intensely track and monitor the movement progress and, on behalf of our customers, champion daily communications with the railroads to obtain commitments to move our customers railcars timely. We then summarize the detail movement and delay information into presentable metrics that can be discussed with our customers rail provider to address service, demurrage, equipment issues and/or opportunities. We also manage maintenance in the same intense manner from DDCT management to shop and AAR repairs management and audit to inspecting railcars for into lease or lease turnback situations. We also do the paper / computer work filing with the STB, retag / restencil, OT-57 filing, etc.; and
- We consult on predominately rail transportation issues (operational / management / rate). As well we have significant railroad operations and marketing experience that we capitalize on to create a better understanding for our customers of how the railroads and rail suppliers view their business. I’ve personally spent 10 years working for Class I railroads and 24 years working for or on behalf of rail transportation users. That’s a lot of accumulated knowledge to put to use on behalf of shippers and regional / shortline railroads.
The following is a scenario that we’ve seen that outlines the general “Fishing for Information” approach. This is one of many real-life scenarios that we’ve encountered. We find it amazing that some of the people leading the team were adamant about getting as much “free” information as possible before engaging in a fact-finding assignment that had the depth we’d consider necessary to make large investments.
The multi-million-dollar project that’s destined to magically appear! The project is a new multi-plex in the southeastern U.S combining housing, infrastructure development, warehousing, transload, rail termination and origination and waste to energy plants. The facility is a 640-acre site with access to water, truck and rail transportation. The development of the site will take a constant stream of coal, lumber, steel, aggregates, asphalt, baled municipal solid waste for a waste-to-energy conversion and other goods required to build out a greenfield site and support the daily demands of a community. The site in and of itself is at a great location and has a wonderful concept that requires a lot of work to fill in the pieces. Getting facts straight, prices locked in or at least indicative of nearby prices and not assuming that the origin and destinations are just going to appear (e.g. taking substantial work to bring this to fruition) are a couple of key items for this project. The developers came to Tealinc to obtain our thoughts on rail rates, rail operations, rail equipment type and number required, and infrastructure development and requirements. We provide knowledge backed analysis, research and experience to similar projects for other companies in like-type industries and our focus on the rail transportation integration and focus for this project was fact based. The problem? The developers wanted our thoughts, and on a large scale, free of any engagement costs. We communicated the big picture thoughts but cautioned them that the “devil is in the details” and that would take some work. The investment portfolio for this project was in the hundreds-of-millions of dollars. A note to keep in mind: If you’re going to invest in this type of project with this volume of money, its best to have the people consulting to you receive some type of compensation for their efforts. Just like any properly conducted business with the focus, time and attention of a group of educated and valued-committed researchers, advisers and consultants of any type, any selected transportation professional is required to make a return for their company so they can buy groceries, pay their rent or mortgage, provide transportation and general living expenses for their employees and, from a business standpoint, the income provides the sustainability of the company. While getting something for free has its pro’s, just like anything in life, you get what you pay for. Free advice in this situation only cost more money in the long run than it saves in the short run because the value of the advice is zero dollars, and a company or person can’t justify their time for a zero dollar return. So, the level of effort upon the realization of the value proposition becomes zero. As you would guess, the developers decided not to invest money in expertise and the project is now missing the logistics support necessary to be successful. While we gave great high-level context to the project, the fishing for details yielded nothing. I am certain many of you have experienced many inquiries into as much information you’d provide for no value and have responded in kind.
While it’s nice to get some information for zero investment it’s also important to trade value where you can. If you have some piece of market information that is of value to the other party, then you’ve got trade Fodor to use as the value proposition. If you’re looking to get something for nothing, then you probably can expect the same value in return as that which you’re willing to give. It’s amazing to me how much development is done on “back of the envelope” research that isn’t substantiated in fact. Getting something for free may not have an upfront cost but the costs in the future are immeasurable. It’s difficult enough to make decisions with a lot of fact-based research yet it’s a shot in the dark without any.
We certainly enjoy speaking with current and future clients and adding value where we can. It goes without saying though: if you’re fishing for information you’ll like get suckers because without fully investigating the situation that’s all that anyone can provide.