Now I know the Railroads are Making Money

I have Yahoo as my "home page" on my various web browsers both at home and at the office.   My Yahoo is a nice tool to gather all my info and my various RSS feeds.  Most of my links and feeds are transportation related.   

I'm used to seeing railroad stories because I look for them. Progressive Railroading magazine also has a nice daily feed.   

What I was not prepared for was seeing a major Class 1 railroad pursuing a  "main stream consumer"  web advertising campaign. The CSX campaign is called "How Tomorrow Moves".

CSX is advertising all over Yahoo and probably other places as well. The message they are looking to send seems twofold. First, is general awareness.  How much does the general public actually know about what any individual railroad does for a living?  Likely not much.   The second message...is "Green".    CSX has an animated banner ad that focuses on the efficiency with which rails can move tonnage vs fuel cost.    When a MAJOR commodity that moves on the rails is coal (read energy)... that's an important message.

The public is aware of tankers because oil is largely moved by ship. The public also knows about the Exxon Valdez fiasco.   Oil is also moved by pipeline.   What the public doesn't really get yet is that COAL also can move by pipeline as slurry.    The railroads compete for coal transportation with pipelines. 

"Warren Buffett is investing heavily in BNSF and other railroad stocks.  The reason?  Berkshire Hathaway clearly sees that energy moves on the rails."   

Ethanol and coal both have major movements on the railroads.   When the price of fuel is rising, and demand for energy, especially domestic energy (Ethanol and Coal) are on the rise, any industry that controls the way the fuel moves (railroads and pipelines) is going to be profitable.  That's simple logic.  Buffett likes simple logic.  He bought into Burger King and Coca Cola because he understood the fundamentals. 

CSX surprised me with this campaign because Class 1 railroads typically don't have a consumer base.  However, consumers are concerned with getting energy.  They are also concerned with the efficiency with which that energy moves.  Ultimately it influences the size of your power bill.   

Pipelines moving both fossil and bio fuels compete with the rails for energy transportation.

"CSX just put a stake in the ground in the "hearts and minds" department that nobody even knew existed."

That's cool.  Some folks in marketing at the railroad are clever.   What is interesting is that they have taken what I call a "purple pill" approach.  They seem to be borrowing from the Pharmaceutical companies in just raising general brand awareness.   Next will come a more targeted message.   We can wait for the shoe to drop.

CSX is communicating that it is a vital transportation resource.  They are also communicating that using CSX is an efficient way to move products, but especially energy.  CSX is working on convincing us that end consumers and investors will care about the green strategy and economic efficiency used by energy buyers such as Southern Company, (who owns Georgia Power, Alabama Power and other utilities.)

I'm really interested in seeing how this works.  If anybody in CSX marketing reads this article I would be especially interested in giving you an opportunity to tell us what message the "How Tomorrow Moves" campaign is truly targeted.   

Eric

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Comments

[Bill Perry]

I retired from the FRA. This agency is an advocate of Advanced Train Control. On a related matter, you would be amazed at how the Railroads determine stopping (braking) distances and space wayside signals. Curiously each RR company has its unique braking distance charts? Very bazaar, the law of physics applies equally to all trains. ATS will apparently render this "witchcraft" obsolete. Each train will use actual braking data, i.e., a distance - speed over time program to calculate and ascertain actual braking distance. See Patent-Storm; an application by Kull.