One of the problems that have traditionally challenged private railroad fleet operators is that of customers holding cars too long. Excessive customer holding time (ECHT) increases the number of cars needed in a supplier fleet, thereby increasing capital costs, and it can result in higher railroad storage charges. While there are many factors that contribute to ECHT, the major fleet operators have identified four principal causes: (1) insufficient customer storage capacity, (2) inaccurate demand forecasting, (3) poor order triggering, and (4) ineffective communication mechanisms. A further underlying theme is that most customers neither incur nor appreciate the supply chain costs of holding supplier-owned rail cars. Using major fleet operators as an expert panel, this research identifies potential solutions to the problem of ECHT, solutions that both improve buyer-seller relationships and increase the sharing of information. The panel determined that single supplier contact and a single customer contact enables clear, meaningful communications. Managers of fleets as well as marketing and sales departments require access to timely, accurate information (1) to understand the true costs that both they and their customers are incurring, and (2) to manage the holding of loaded railcars by customers. Because the problem of ECHT is multidimensional, the panel agreed that one solution could not fit all situations. Moreover, each customer's circumstance is unique, exhibiting distinct differences in operating environments driven by industry, plant size, plant location, seasonality, and product.
|Original language||English (US)|
|Number of pages||9|
|State||Published - Sep 1 2002|
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