I was saddened several weeks ago to hear the news of the major restructuring and downsizing of Norfolk Southern’s Triple Crown Services, the sole remaining North American operator of the RoadRailer technology. I can’t claim to be objective on the matter, because my involvement with RoadRailer spans the bulk of my 30-plus years in the business and I was there at the beginning. Full disclosure: I was a believer then and I still am.

But my purpose here isn’t to question NS’s decision, which I’m sure was not easy. Rather, I want to acknowledge the many individuals I’ve met and worked with during the RoadRailer journey, members of the railroad fraternity who lent their time, effort and career capital to trying to create something new and unique that broke all the rules. In doing so, I hope to draw some parallels with the situation of today and offer some concerns.

Some of those names will be familiar only to older readers, while others have gone on to senior positions elsewhere in the business:

— Bob Reebie, father of the RoadRailer and a brilliant iconoclast who rubbed a lot of his contemporaries the wrong way but had a habit of being right on the big issues.

— Wayne Hoffman, then chairman of Tiger International, who gave what was then called the Bi-Modal Corp. its initial funding.

— Craig Duchossois, chairman of Thrall Car, who rescued RoadRailer in the mid-1980s.

— Bill Greenwood and Bill Dewitt of Burlington Northern, who provided critical support during the transition.

— Ed Kreyling, Norm Heller and Ralph Foster of NS, who brought a radical technology to the least likely and most conservative of the Class I railroads to take on the challenge and created Triple Crown.

— Tom Finkbiner, who as NS’s vice president of intermodal helped get the business off the ground, with the help of Dan Cushman, Matt Rose and Tim Minnich in the Triple Crown organization, and later, Jim Newton and his able team in Fort Wayne.

— Jerry Ehrlich, president of Wabash National, who acquired the technology from Thrall and helped bring it to full flower, along with the able technical support of folks like Ken Combs and Fred MacDonald.

These individuals and many others, far too many to mention in this space, all played key roles. To those who have been omitted, please accept my apology. It doesn’t mean your contribution wasn’t appreciated.

The mystery, if there is one, is why these folks stuck their collective necks out? Why did all these individuals take the risk of trying something radically new, when the safe and prudent course from a personal and career standpoint was to stick to business as usual? It’s not that the rail industry was a hotbed of innovation back in those days. The industry in those days was notoriously unforgiving of failure, and those guilty of the crime usually paid dearly.

This is a question worth asking because the need for innovation is even greater today, and the environment perhaps less hospitable than it was then. Ironically, as the railroads have improved their performance and concentrated their volume on a decreasing network of high-density mainlines, the tolerance and room for variation has declined.

Similarly, all the old yards and facilities have been repurposed or excised, so new initiatives often require expensive greenfield construction. Tight financial controls and strict adherence to driving down the operating ratio means long trains and lots of them, which is hardly conducive to creating new, customized products.

The problem, in a nutshell, is this: There has surely been a rail renaissance, but it hasn’t been in volume. After taking a whack during the Great Recession and given this year’s additional losses, including a permanent downturn in King Coal, carloads are unlikely to regain pre-recession levels anytime during this economic cycle, much less reach the previous peak achieved in 2006.

The question, then, is what the industry will do for its next act.  Intermodal certainly will play a key role. It’s currently the only growth market the rails have and the only place where they hold a realistic chance of pulling freight off the highway. But expanding lower-margin intermodal to replace coal will put pressure on the operating ratio. Following the time-honored script, the reaction will be to drive costs down further, with bigger trains, denser corridors, smaller crews and larger-capacity cars.

Such advances may drive down costs per unit, but the railroads, based on recent performance, do so at the expense of service quality. Moving toward unit trains and larger cars drives down cost, but runs counter to where the economy is heading, which is toward smaller shipment size and more responsive transportation.

To my mind, that’s where the innovators must come in. If the railroads are to retake control of their destiny and expand the business, a new paradigm must be created. It would be one that marries the economics of carload with service of sufficient consistency and reliability to pull volume off the highway. It would require a radical change in rail operations and outlook. Some operating metrics would deteriorate, but in a network with high fixed costs, the ability to spread those fixed costs over growing volume would make up for the loss.

A few decades ago, a relatively small number of dedicated innovators and pioneers brought an unlikely idea, the RoadRailer, into reality.  Where this generation’s innovators will come from and whether the industry is interested in their efforts is the great question of the moment.  The future shape of the industry will depend on the answers.