Company Spotlight: Highroad Consulting

It may be 2016 but one 19^th century industry is having a bigger year than ever.

Transport by rail is seeing dramatic growth and continues to be on the rise. Freight volume is expected to increase 60-percent by 2040 and 90-percent of that growth is going to be moving by rail. From oil pipeline setbacks necessitating movement by rail instead to companies seeking alternatives to long-haul trucking, things are looking rosier than ever for the rail industry. At the heart of this period of rail rebirth is Highroad Consulting, a company that provides tailored solutions for both shippers seeking to achieve profitable strategies, and economic development professionals who want to create jobs.

“We’re at a major point where we’re growing dramatically. This year, [Highroad’s] revenues are going to triple over last year,” Sandra Dearden, president and CEO of Highroad Consulting tells Ivy Exec. She founded the company back in 1996 after years in the railroad industry developing strategic planning models. “Now companies like John Deere and Kraft who have never done rail before are asking us to do studies and develop rail strategies to find the best way to get their products to customers.”

But with so much growth comes opportunity: Dearden sees that there is a genuine lack of knowledge of the rail industry, leaving many companies susceptible to getting overcharged for shipping. During the last two years, rail and truck volumes have declined due to the economic downturn. However, we see a turnaround and with demand for rail transportation growing, the railroads are increasing their infrastructure to prepare for future volumes. However, capacity will be a challenge for all of the stakeholders. After decades of mergers, competition has been reduced. Dearden notes that in 1979, there were 21, Class I railroads, today there are only seven. Finding solutions for her customers to manage operational efficiencies and costs so they are positioned to deliver quality service to their customers is a central part of what Dearden and Highroad Consulting do.

“We’re a small firm but we do big things and I’m proud of that,” Dearden says.

In our interview, Dearden highlighted as an example, the contribution her firm made to a U.S. Surface Transportation Board (STB) decision on fuel surcharges assessed by the railroads. In 2003, Highroad released a white paper with cost evidence that proved shippers were being overcharged by rail companies. Traffic World magazine ran a feature article about Highroad’s study, and shippers asked Congress and the STB to investigate the fuel surcharges.   Dearden testified at a two-day hearing initiated by the Surface Transportation Board and presented evidence that the surcharges assessed by the railroads were four to five times higher than the total cost of fuel for the moves. Dearden’s work papers were shared as a critical part of the decision in determining that these charges were illegal. The Board ordered the railroads to change their surcharge programs to reflect actual fuel cost increases.

“It was a major win for the shippers,” Dearden recalls fondly.

As for building a successful consulting firm where some 60-percent of clients are repeat customers, Dearden is a somewhat unlikely founder. After leaving a long career in the railroad industry of more than two decades, her husband advised her to pick a new path that ignited her passion.

“I flew all over the country on interviews,” Dearden says. “Everyone I met kept telling me to be a consultant.”

Initially, she resisted because she’d had negative experiences with consultants in the past: from independent contractors who would take on any project to make money to major firms that would put sell their services based on senior management then put inexperienced consultants on the job.

But taking on several, key projects, Dearden realized the opportunity for creating a company that provided strategic solutions in rail transportation.

“The shippers need to protect their interests. We help them prepare for negotiations,” Dearden says. “Highroad has a full-time staff of six and 30 contract consultants, and we are recruiting. All of Highroad’s consultants have senior management or middle management line experience in their respective functional areas.  Highroad’s business model is based on our policy to staff projects with highly qualified consultants.”

That type of mentality is key for Dearden when she hires new consultants for her firm. She describes the daily “whirlwind” meetings where it’s all hands on deck to manage and control priorities while focusing on the Wildly Important Goals. Her employees enjoy a great quality of life with summer hours and other social events throughout the year.

But fun aside, Dearden’s consultants need to have the chops to get the job done, plain and simple.

“You can’t teach work ethic to someone: they either have it or they don’t,” she explains, noting her preference for hiring employees who had to work to pay their way through school, appreciating that they had skin the game for their own educations. “I want someone that’s going to be engaged in the company and has a passion for what we’re doing.”