IT may have saved Amtrak

Timely solution provision may have saved the recently collapsed courier, says the firm's former CIO Phil Young

Phil Young: We still had work we wanted to do, but no money to do it

When I joined courier firm Amtrak in November 2002, I inherited a 1980s infrastructure that had lacked a lot of investment. A new management team brought in by venture capitalist 3i was trying to stem the losses.

I saw this as a chance to use technology to leapfrog competitors. Our aim was to slash the cost of IT ownership, increase productivity and shrink overheads by improving the quality of management information and management’s decision-making ability.

In my first year we implemented volumetric charging via automated systems that added nearly £2m directly to the bottom line, helping Amtrak towards a profit not seen for some years. We also introduced new handheld scanners for drivers, based on cameras rather than the older laser technology.

Deployment of two-dimensional barcodes allowed storage of more information in the barcode itself ­ including full address information. This helped reduce the number of misdirected parcels.

Money troubles
We also moved Amtrak to an MPLS WAN, reducing our reliance on lease lines between central and remote locations. Previously, we were being charged per mile.

Where do I think it went wrong? After acquiring another courier, Nightspeed, a US-based private equity company purchased Amtrak, but was not interested in capital investments. We still had a lot of work we wanted to do, but no money to do it.

Our systems were not fully integrated and due to gaps, tallying the information gathered from the tracking of parcels to the
information required for billing them could be hit and miss.

I wanted to move to a more integrated platform based around a CRM and data-warehousing strategy where information could have been better consolidated.

Cashflow problems escalated with the loss of Farepak hampers, one of Amtrak’s accounts; Amtrak went into receivership and was acquired by Netfold.

I know Netfold understood that the right technology can enhance this type of business. However, it probably took the company longer to get financial headroom. I resigned in March 2007, but believe that the right technology
investment at the right time could have saved Amtrak.