A Rail Company Re-engineers Its Operating Plan and Improves OTP

Client Context

In 2015, the federal FAST Act opened critical long-distance rail routes to competitive bidding, requiring the client—a major American passenger rail company—to compete against private operators based on actual operating costs.

To secure its position and retain business, the company needed to:

• Reduce annual operating costs by $4.3 million.
• Improve on-time performance (OTP).
• Achieve these objectives without reducing its union workforce, given expected retirements and natural attrition.

The company engaged EFESO to design and execute an ambitious improvement initiative focused on its high-volume Chicago terminal.

Key Challenges

• High servicing and inspection costs, putting key business at risk.
• Need for process standardization to improve OTP.
• Labor constraints, requiring efficiency gains without layoffs.
• Lack of coordinated decision-making across mechanical, transportation, and service teams.

Approach & Key Success Factors

EFESO implemented new processes and tools to drive cost reduction and OTP improvements:

1. Cost Reduction & Process Optimization

• Conducted boots-on-the-ground evaluation of servicing and inspection operations.
• Collaborated with crafts and leadership to redesign processes for greater efficiency.
• Coached teams on sustaining operational improvements.

2. On-Time Performance (OTP) Enhancement

• Developed decision matrices to standardize response to train delays and disruptions.
• Established weekly cross-functional meetings, aligning leaders from:
  • Mechanical
  • Transportation
  • On-board services
  • Other key operational areas
• Implemented real-time performance tracking, where deviations from the plan are flagged as exceptions requiring feedback and corrective actions.
• Published meeting outcomes for the entire workforce, fostering accountability and ownership.

Results

$6 million

In annual cost savings, exceeding the initial $4.3M target.

6%

On-time performance (OTP) increased over the prior year.

97.7%

Terminal performance improved (from 88%).

Customer service score

Largest improvement in the company’s long-distance business.

Stronger competitive position in upcoming bids against private rail operators.

By leveraging structured processes, decision matrices, and collaborative performance management, EFESO helped the company achieve cost efficiency and operational excellence, securing its long-term viability in a competitive rail market.