Economic and Management Consulting

Rail Supply Chain Strategy

Rail customers in North America are facing an increasingly congested railroad network, a unique set of rules and requirements and ever escalating prices. Competing in this environment requires an understanding of rail operations and commercial decision making and a creative, analytical and collaborative approach to managing your rail supply chain. We will work with your team to understand the overall needs of your business and develop a sustainable rail supply chain strategy that will meet those needs.

Rail Commercial Contracts

With many years of Class I railroad marketing and pricing experience we will provide an understanding of how railroads view your business, and the strategy they are likely to pursue in a negotiation. Our analytical approach includes:

  • Based on the specific operating parameters of your rail movements we will estimate the railroad costs and margins on your business.
  • We will analyze the markets for your products, benchmark your rail rates and analyze the impact of your business on the railroad’s bottom line.
  • We will analyze your rail service and identify potential opportunities for your company to improve efficiency for the rail carrier that may provide value in negotiations.
  • We employ a team approach with participation from the people in your organization that can help generate the most creative ideas and who would have a role in implementing a new rail contract.
  • We will help you work on the relationship with your rail carrier to achieve a successful outcome including the best possible rates, a clear understanding of the level of service to be provided by the railroad and a process for resolving issues.

Rail Operations, Service and Management

Rail transportation costs include more than just the rates you pay the railroad. Manufacturing plants, mines and other rail served facilities have infrastructure and internal operations that can affect safety and costs for your rail carriers and your facility. Optimizing the efficiency of these operations can improve rail service, make your company a better railroad customer, improve railcar cycle time and reduce supply chain costs.

Our approach to rail operations improvement includes working with your team to map the current processes, comparing the current processes with industry best practices, analyzing the gaps between current processes and best practices and working with your team to develop and implement a supply chain management operating system that will close the gaps.


We address all key rail management factors:

  • Facility operations including, internal switching, bills of lading, empty car handling and interactions with the Class I or shortline railroad serving the facility. We will develop a rail operating plan for each facility that will improve safety and efficiency and minimize demurrage and accessorial charges.
  • Network rail management including developing and implementing processes for tracking shipments, resolving tactical issues, managing and distributing empty cars, analzing data and working with the railroad on strategic approaches to service issues.
  • Rail fleet management including fleet size, maintenance management and railcar lease administration.
  • Commercial activities including processes for rail rate and service negotiations, contract administration and strategies and tactics for managing the commercial relationship with your rail carriers.

Supply Chain Organization Design

A supply chain organization structure designed with clear responsibilities and accountabilities will enable your organization to implement its supply chain strategy and effectively interface with rail carriers and other supply chain partners.

  • KEP will analyze the current supply chain organization and its performance in meeting the company’s strategic objectives.
  • Based on our experience we will identify any gaps in performance.
  • We will then work with your team to develop roles, responsibilities, job descriptions and an organization design that will enable the supply chain organization to meet the needs of the internal stakeholders.
  • We will provide training and coaching to help your people succeed in their roles.

Litigation Support

We have submitted expert testimony on behalf of clients in U.S. Surface Transportation Board (STB) rulemaking proceedings and consultations before the Canadian Transportation Agency. We have also assisted clients in strategy and rail cost analysis in U.S. STB rate cases and final offer arbitrations in Canada.


Training and Education in Railroad Subjects

KEP has developed four training modules and workshops to provide basic knowledge of railroad subjects and an understanding of how railroads operate. These courses are taught in a workshop format by John Schmitter. Over 1,000 people have participated in these courses over the last ten years.

  • Railroad 101 – Introduction to Railroad Operations.
  • Railroad 201 – Introduction to the Commercial Side of Railroading.
  • Railroad 301 – Introduction to Rail Fleet Management.
  • Railroad 401 – Introduction to Intermodal Transportation.

We can customize the content of these courses to meet the specific needs of your organization.