Railroads Install A Peacemaker In Washington - Ed Hamberger to run Association of American Railroads - Brief Article

Railway Age, March, 1999

If egos, arrogance, and a churning of CEOs restrained, as some say, the Association of American Railroads from performing on the advertised, consider the recent sign in its window: "Under new (and hopefully stable) management.

The new fellow in charge is 48-year old lobbyist Ed Hamberger, whose peers voted him one of Capitol Hill's 50 finest before he was recruited as AAR's top strategist and spokesperson last July. Where many in the rail industry view battle as an extension of diplomacy, Hamberger characterizes it as a failure and frets that for too long railroads have been at war with their customers.

He prefers discussing customer satisfaction instead of influence peddling, investing in intellectual capital rather than political action campaigns, and solving problems of Main Street (where shippers dwell) to those of Wall Street. In an industry that is infamous for issuing demerits for creativity, such behavior can be risky to longevity. Then again, railroad CEOs who employ Hamberger-make no mistake, he's a hired hand-know from personal observation what they purchased.

In Hamberger's boyish face there is something of the straight-arrow Wally Cleaver, a touch of the impish Beaver Cleaver, and even a hint of the nerdy Bill Gates. That's one helluva disarming combination to take into a congressional lawmaker's office. As for substance, take a peak behind Hamberger's desk. His informal library is haphazard stacks of obviously oft-handled-and, we're promised, well read-pronouncements from the Alliance for Rail Competition, Consumers United for Rail Equity, plus dozens of more scholarly bundles documenting the best and worst of today's freight railroading. In terms of heft, "worst" exceeds "best" by a furlong.

For sure, Ed Hamberger knows freight railroads suffer a problem largely of their own making. Unlike the industry's chief legal officers, who prefer courtrooms to meeting rooms, Hamberger hopes to turn antagonistic customers into collaborators through dialogue aimed at mutually conceived, constructed, and completed solutions. Give Hamberger credit for those shipper-praised AAR listening sessions.

He wants for customers a single point of contact to learn the status and estimated delivery time of their freight shipments. With AAR's 85 computer experts in a more amiable environment of North Carolina's Ph.D.-dominated Research Triangle bounded by Raleigh, Durham, and Chapel Hill, Hamberger expects the industry's delay-plagued Interline Service Management project to begin delivering on its promises this year. When trucking prodigy Don Schneider told a congressional panel last month his tractors and trailers communicate with satellites to provide real-time location on every ounce of freight in transit, Hamberger fidgeted with embarrassing knowledge that railroads often can't inform a customer if their load even reached Illinois.

At AAR's Transportation Technology Center in Pueblo, Hamberger expects his 321 engineers and support staff to serve up from their testing of heavy-axle loads, composite-steel rails, and sonar wheel-defect detection systems big-buck savings proving there still is low-hanging fruit on the productivity improvement tree.

"Only when customers take our commitment to service more seriously will we begin to earn more business," says Hamberger. "I know most customers have a choice. Improving service is the only way to grow revenue. Premium service also begets premium rates." He is under no illusions: "Our 1.2% traffic growth last year is not knocking 'em dead."

More sobering is his calculation that for every gallon of locomotive diesel fuel burned, railroads pay $1.93 cents to own and maintain the right-of-way, plus another almost $2 to own and maintain rolling stock and motive power. To meet customer demand for consistent ontime delivery, Hamberger says railroads should be investing more than $8 billion annually. The current figure is under $7 billion and even that amount, he says, can be sustained "only by growing the top line."

Capitol Hill, of course, is Hamberger's strength. Even should shipper detente be achieved, there are such political objectives to be attained in the 106th Congress as maintaining the freeze on growth of truck lengths and weights.

Nothing is more galling to railroads than paying a 4.3 cents per gallon locomotive-fuel tax--$160 million annually-for deficit reduction. Truckers escape the tax and there no longer is a federal deficit.

Burying the Kyoto protocol, which could devastate the coal industry, energy independence, and coal-dependent railroads, is a "must," Hamberger says. He also is troubled by Environmental Protection Agency regulations that would "limit use of abundant, affordable reserves of American coal, thus driving up energy prices."

Hamberger also will press Congress not to attach mandates to FRA safety reauthorization that could "interfere with cooperative and productive voluntary approaches." He's also wary of a one-size-fits-all solution to fatigue, preferring imaginative and collaborative approaches.