Introduction

Our firm partnered with a major international petrochemical company to develop a comprehensive rail freight strategy for their new manufacturing facility. The project focused on optimizing rail transportation costs and service levels while addressing the challenges of being captive to a single Class I railroad at origin. Through a multi-phased approach combining deep supply chain expertise with railroad industry knowledge, our team delivered a detailed strategy and tactical execution plan that positioned the client for successful railroad contract negotiations and long-term operational excellence.

At A Glance

Our consulting team provided strategic guidance and tactical support to develop a rail freight strategy for a new world-scale petrochemical facility. This enabled the client to maximize leverage in railroad negotiations despite captive status at the origin.

Requirements:

  • Development of comprehensive negotiation strategies and tactics for Class I railroads
  • Creation of detailed risk assessment and mitigation plans
  • Design of tactical execution roadmap with over 165 specific action items

The Challenge

The client was constructing a major manufacturing facility served by a single Class I railroad at its origin, creating potential pricing and service vulnerabilities. They needed to develop strategies to maximize negotiating leverage despite this captive status while ensuring competitive rates and reliable domestic and export shipment services. Key challenges included optimizing an existing Letter of Intent with the serving carrier, developing effective negotiating tactics for multiple Class I railroads, and creating contingency plans for various scenarios. The project required balancing multiple stakeholder interests while navigating complex railroad industry dynamics and regulatory constraints. Additionally, the client needed to establish a framework for ongoing relationship management with key railroad partners to ensure long-term success.

PraxiChain Solution

  • Developed multi-phased strategy addressing 70+ identified challenges through 75+ detailed strategy components
  • Created comprehensive risk matrix with specific mitigation tactics and BATNA options
  • Designed detailed tactical execution matrix with 165+ specific action steps
  • Established railroad engagement roadmap, including pre-RFP, negotiations, and top-to-top meeting frameworks
  • Provided actionable negotiation tactics tailored for each Class I railroad

Results

The project delivered a comprehensive rail freight strategy that positioned the client for successful railroad contract negotiations and long-term operational success. Key deliverables included a detailed strategy framework, risk mitigation plans, and a tactical execution roadmap fully endorsed by client leadership. The strategy identified specific leverage points and opportunities while providing clear contingency plans for various negotiation scenarios. By implementing our team’s recommendations, the client established a strong foundation for managing railroad relationships and optimizing their rail transportation network. The tactical execution matrix provided a clear pathway for implementing the strategy across multiple workstreams and stakeholder groups. Most importantly, the project delivered actionable insights that enabled the client to maximize their negotiating position despite captive status at the origin.