While working in product management and pricing at Norfolk Southern, Rodney Saunders identified an opportunity to improve profitability within the refrigerated rail transportation segment through a combination of pricing strategy, asset utilization, and operational alignment. The initiative focused on reducing equipment-related operating costs while simultaneously improving customer pricing competitiveness and long-term commercial positioning.
Norfolk Southern relied heavily on refrigerated railcars owned by external rail carriers because the company did not maintain its own refrigerated fleet. Due to network inefficiencies and equipment delays at the time, refrigerated railcars frequently remained in the system longer than expected, generating substantial equipment holding and per diem costs. Although refrigerated freight represented a premium-priced business segment, underlying operational costs were compressing margins and limiting pricing flexibility in an increasingly competitive transportation environment.
Rodney developed a commercial strategy centered around aligning customer transportation economics, carrier profitability, and private equipment utilization. The proposed approach encouraged customers to transition toward privately owned refrigerated railcars while restructuring pricing based on the reduced operating costs associated with customer-supplied equipment. The strategy also leveraged relationships with Cryo-Trans, a refrigerated railcar provider whose newer equipment offered operational and capacity advantages over traditional railroad-owned assets.
Working alongside a major frozen food customer, Rodney helped facilitate alignment between customer transportation requirements, equipment provider capabilities, and Norfolk Southern’s pricing structure. By reducing equipment-related operating costs, the company was able to improve pricing competitiveness while simultaneously strengthening margin performance. The revised strategy contributed to approximately 54% margin improvement within the business segment while also reducing equipment-related expense, improving asset utilization, strengthening customer retention, and supporting longer-term commercial alignment between all parties involved.