Railway Center at MSU Aims a Wide Lens at a Complex Industry

The MSU Center for Railway Research and Education provides expertise in strategic business leadership, supply chain integration, technology decisions, and interface between the different stakeholders while cultivating a multi-disciplinary approach for railway systems and management.

Andreas Hoffrichter first became intrigued by trains at a young age. "There are pictures of me playing with trains when I was about two or three years old," Hoffrichter said. "So basically I made my passion into a profession."

That early fascination with trains is pretty common among those who study railway systems. Nicholas Little has been involved in the railway and management certification program since its inception.

"The first photograph of me connected with a train was taken when I was about three years old. I was standing on the foot plate of a steam engine. My dad was working in an army supply depot—this was a local train that took supplies to the main line—and I went into work with him most Saturdays," Little recalled. "I wanted to be the Fat Controller (Sir Topham Hatt) from Thomas the Tank Engine. That was my wish in life."

The memory of a model train set, chugging around a Christmas tree, however, belies the complexity involved in the business of transporting freight and people by rail. The simple task of moving a train car from Point A to Point B is complicated by numerous concerns. For example, railway companies do not typically own all the tracks over which they operate—they often operate over lines of other companies, through so-called trackage rights. They may also own or lease the locomotives that pull the cars, and they may also own or lease those cars. The tracks that they do own are leased out to other companies. Some of their most important assets are constantly moving from one location to the next. Then they manage and control the train movements through signals similar to traffic lights on the road. For reliable and safe operations, railway companies invest around 20 percent of their revenue in modernizing their assets, but that revenue is shackled to the vagaries of the economy. There are also the traditional business tasks, like marketing, sales, and accounting, as well the job of educating policy makers in government about the needs of the industry.

Hoffrichter came to Michigan State in April 2016 to head up what was then the Railway Management Programs in the Eli Broad College of Business. The Center for Railway Research and Education (CRRE) was established a few months later. According to Hoffrichter and Little, the center is different from other centers or departments in the country that conduct railway research.

"There are other centers, but they're all engineering based," Little said. "We're the only one that we're aware of that is management based or business based."

Hoffrichter agreed. "We look at the industry as a system, all the different parts have to come together and work together. You might have the best track in the world, but if your trains are not able to utilize the infrastructure appropriately, you don't get a lot out of it. It's necessary to integrate the various parts, and the associated management, that's why we look at railways as a system."

This approach allows the center to pull from multiple disciplines—from marketing and administration to agriculture and geography—looking at the industry through a myriad of lenses.

Railways and Change

The railroad industry has continually driven technological change since it began 200 years ago. From steam to diesel to hydrogen, the industry continually pushed for more efficient and cost effective means of moving cars.

"To some extent, the rail industry has been more advanced than the automotive sector," Hoffrichter explained. "Take, for example, the electrification of drive systems, which is a big deal for automotive right now. The rail sector completed that before the 1960s. Trains are typically pulled by a diesel locomotive, but really it's an electric locomotive with a diesel power plant on board."

"If you look at the widest definition of the rail industry and include transit and light rail, then there were electrification systems around in the nineteen teens and twenties all over this country with lots of local lines," Little said.

It's not just technology that's changing, railways are expanding. There's been a resurgence of rail freight since the 1980s, and more people rely on trains for transportation every year. This is especially true on the East Coast and other places with a dense population, but growth in passenger rail is being seen in the Midwest, California, and other pockets around the country.

Change is always a challenge for industry leaders. If more people are interested in traveling by train, there needs to be strategic planning about where to invest in infrastructure, and perhaps a different approach to marketing. On the freight side, growth can mean opportunity, but it can also mean more competition. Autonomous trucks, for example, represent a real threat to rail's freight business but could also be an opportunity to connect the last mile where there might not be rail track.

The Certificate Program

This is where the CRRE's certificate program comes along. Since it began in 2007, close to two hundred people have graduated from the program. According to Little, they come primarily from three different areas of the rail industry: railway operating companies (passenger and freight), suppliers to the railway industry, and railway industry customers (particularly, freight customers).

"The certification program has been the backbone of what we've done, and with Andreas joining, it gave us the opportunity to expand the scope," said Little. "We've now started to build some customized programs, working with individual companies in the rail industry so we can help them develop their future leaders, rather than just offering the open enrollment course. It's also given us the chance to look at some research areas as well, based predominantly around the management and motive power side of the industry."

The program was developed with the help of a 30-person curriculum advisory committee, made up of industry professionals. Feedback from participants is used to continually hone the shape of the program. Participants are taught by some MSU faculty, supplemented with many sessions led by carefully selected subject matter experts from the industry.

"We always get positive feedback on how we structured the program. It's already aimed at people in the industry," Hoffrichter said. "We provide wide-ranging content, and then have subject matter experts from industry who can say, 'This is how it is actually applied in the industry.'"

The academic component is supplemented with on-site visits to railroads and shops around the country, where participants see how what they are learning is actually implemented. Each week of the four-week program takes participants to a different part of the country. The first week is on the MSU campus, where they hear about business administration and leadership. Later they will meet in Chicago, the "rail hub of North America"; in Pueblo, Colorado, at the Transportation Technology Center; and then to the East Coast in Washington, D.C., and Newark.

Value to the Industry

Many organizations, from Amtrak to CSX, send their managers to participate in the CRRE's certificate program. These companies value the program's business-based approach for developing the leadership the industry needs. It is a way for managers rising through the ranks to see how the industry operates as a whole—how all the different pieces are related. It's also a way for managers and executives coming from other industries to learn about rail.

Lee WanVeer is the director of talent management for Amtrak. A number of managers and leaders from Amtrak have completed and contributed to the CRRE's railway and management certification program. According to WanVeer, the certificate is a quick way to educate people who are either new to the company and unfamiliar with rail systems, or are only familiar with a particular area of the industry.

"The program keeps our leaders from being myopic, in terms of only focused on our challenges alone and only looking at it from our perspective and not from the perspective of other carriers," he said. "For example, Amtrak only owns a very small portion of the rail lines we run on. They're mostly owned by freight lines. Without an appreciation of what their challenges are, it's hard to see how their interests affect our operations."

According to WanVeer, there's also value in gathering leaders from across the industry to spend time learning together. It creates connections across the industry that are valuable for everyone.