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Railroad baron William Henry Vanderbilt's scornful dismissal of rail patrons ("The public be damned"), which has shadowed the industry for more than a century, at last seems laid to rest. "We are customer driven; we tailor-make our service for our customers," says James Hagen, chairman of Conrail, a firm that was fabricated out of the bankrupt remains of dozens of lines, including the legendary New York Central and the Pennsylvania. Conrail lost $412 million in 1977, the first full year after it was birthed. Last year it made $282 million. Hagen and his cohorts in the rail business are tough businessmen, not the plungers and exploiters who made so much of early rail history.
It is not only the rail behemoths that do well. There are 410 short lines, fragments of old roads that have been reconstituted by adventuresome rail buffs and entrepreneurs to hook customers up with the main lines. The Maryland Midland is one. Nestled in the hills below Camp David, the presidential retreat, it serves 34 customers who need coal and raw materials to turn out cement and lumber products. Paul Denton, 51, a refugee from the Baltimore & Ohio in Baltimore, Maryland, is president, commanding a fleet of 200 cars over 67 miles of track. From a tiny office in the quaint 1902 depot in Union Bridge, he listens to the comforting purr of his six locomotives prowling in the valley at 25 m.p.h. Small potatoes in the big picture. But last year the line grossed $2.3 million and made a gratifying $302,000. And Denton echoes the new call of railmen from top to bottom. "I have three concerns," he says. "The customer, the customer, the customer."
The railroads have computerized terminals and yards so that every engine and car is shown on a screen somewhere. Union Pacific dispatcher John Cazahous in Omaha, Nebraska, once spotted 14 runaway freight cars from another line 1,500 miles away in Los Angeles. Within 11 minutes he had alerted California crews, who placed three locomotives in the path to take the crunch. No lives were lost. Locomotives that used to sit for days waiting for loaded cars are now turned around in hours. Empty cars are shuttled like airplanes. Huge "hump" operations like Conrail's Selkirk Yard, near Albany, New York, can sort 3,200 freight cars a day and send out trains to 70 destinations.
In the Chicago offices of the Santa Fe, they will tell you that "the engine of our growth for the next several years" is going to be intermodal traffic, which means the use of truck trailers and special containers that can be easily exchanged between rail and truck chassis. Santa Fe and the giant trucking concern of J.B. Hunt Transport, in Lowell, Arkansas, pioneered the modern strategic alliances between trains and trucks, which used to be mortal enemies in the marketplace. Increased rail efficiency, rising truck costs and as much as 100% driver turnover a year in trucking drove the two industries together. Santa Fe carries nearly 3,000 trailers and containers a week for Hunt, which, with 7,000 truck tractors, is trying to cut long trips in order to regionalize service areas for less wear and tear on drivers. The advantages trucks have over rails are flexibility and time in shorter distances. Hunt spends $200 million a year on alliances with eight rail companies and plans to integrate further by putting 1,000 newly designed containers a month into service to replace its 17,000 older trailers.