As more companies seek to deploy greener locomotives and rail equipment to support their sustainability programs, National Railway Equipment’s new CEO, Merritt Becker, expects to help customers embrace technology and transition seamlessly toward that goal.
FreightWaves recently chatted with Becker, whose first day as CEO of NRE was Wednesday. NRE is a Mount Vernon, Illinois-based supplier serving North American and international railroads in the areas of locomotive servicing, providing new and remanufactured locomotives and locomotive leasing. Becker succeeds Steven Beal, who died in 2020.
Becker worked at Cummins for the last 12 years, serving most recently as president and managing director of Cummins DKSH in Thailand. Prior to Cummins, he worked at diesel engine and truck manufacturer Navistar for more than a dozen years.
At NRE, Becker will work with OEM and aftermarket customers in the rail and inland waterway sectors, including the sectors’ move toward deploying new technologies.
This question-and-answer interview was edited for clarity and length.
FREIGHTWAVES: What attracted you to National Railway Equipment?
BECKER: “When I think about my career and what I wanted to do and the companies that I’ve worked for in the past, one of the things that intrigues me are family value-oriented companies, especially smaller ones, that compete in a global space. And prior to joining NRE, I knew of them. I worked with them indirectly through Cummins as a customer, and I knew of their reputation and was really impressed with the Beal family and what they’ve been able to do by taking a small town in the Midwest, bringing an industry there, utilizing assets and a great workforce to grow something that’s pretty spectacular.
“And when you put that all together and combine it with my love for the Midwest and small towns — I even watched my grandparents build their own companies in small town Indiana and [saw] the importance those companies have on the communities — it just felt great to be asked to be part of NRE.
“And I think the future is bright for the rail industry and the inland waterway industry [as they manage] the complexity around older technologies and the convergence with newer technologies. And I really believe NRE is positioned uniquely to be able to pull our customers and help them convert their fleets and their capabilities.”
FREIGHTWAVES: How will your experience at Cummins serve you at NRE?
BECKER: “When I first came to Cummins, I was part of an organization called Cummins Crosspoint. They were a 50/50 joint venture with Cummins. That’s on the distribution side: sales and service, the aftermarket. And when I came from Navistar, I was in the parts side of the business and in the aftermarket side of business as well.
“But one of the things that I was attracted to is — let’s just call it the variation, the craziness, the fun and excitement of dealing with and working with customers in the aftermarket space, not only selling new products but also helping them repair and find those challenges that are difficult to manage and come up with solutions.”
FREIGHTWAVES: What opportunities do you see for NRE to serve rail and inland waterway customers?
BECKER: “There are really two areas right now that I think the industry is dealing with, and I’m going to hold aside the supply chain challenges and everything else that everybody’s feeling this year.
“When I talked about this convergence of technology — let’s just talk rail. You’ve got locomotives and equipment that have older emissions capabilities [while] some have zero emissions, and then you can go up the whole technology curve, all the way up to hydrogen. And if I’m a fleet manager or a company that’s got quite a bit of capital assets sitting out there, that’s a huge challenge to try to overcome. It’s like, how do we convert and how do we transform going forward? So the one is the technology side.
“And I think NRE, with their knowledge of past technologies as well as their innovation and what they’ve been able to do on newer technologies, they can accelerate that for customers. So there’s a really, really bright future. And it’s going to take people and it’s going to take engineers and lots of experience and technicians, and it’s going to be a fun challenge to go out and try to help our customers that way.
“The other dimension and bright future is that NRE has a global footprint as well as a domestic footprint across many different industrial segments: rail and in the waterways [where] they have some bluewater history. They can even move into mining and oil and gas to some degree just by providing services. And I think that’s an important space, not only for the customers but also for all the suppliers and equipment manufacturers. They see those markets will ebb and flow and they’ll cycle, but we think there’s a long, long tail on all that industry and I think they’re going to need help and that’s where NRE comes into play.”
FREIGHTWAVES: Is it the same situation for inland waterways? What opportunities do you see?
BECKER: “It’s cyclical as well, but the same technology issues. Power, how do you pull in those new technologies and how do you repower? How do you use old equipment? How do you apply that new technology and that capability to serve their customers even better? It’s just all about uptime. It’s all about efficiency and keeping that equipment running because it’s not cheap.”
FREIGHTWAVES: Is the integration of technology a gradual transition where older and newer equipment is used simultaneously or will the integration be more abrupt?
BECKER: “I believe it’s a gradual step. When you think about these technologies that the original equipment manufacturers are coming up with and you think about the customers out there that are trying to struggle and move their technology into their fleets, I think it’s only going to be gradual.
“Now, there’ll be pockets. There’ll be some large customers that will make the investments because they have the resources to do that. But I truly believe the majority of people will take it step by step and drive it. And that’s where you’ll see some players that will survive through those cycles and their longevity. And you see some of that won’t. But I think the long-term players in the industry are the ones who recognize that the customers have these challenges, and we have to come up with unique solutions and some innovation to be able to help them transition.”
FREIGHTWAVES: When we’re talking about technology, what are you referring to? Operations? Safety?
BECKER: “Primarily what I’m talking about is power and power generation, as well as power in the locomotive. … So you think about diesel and all the alternative fuels, with electrification all the way up to hydrogen, to how we do power management — the controls. And most importantly, how that integrates into, let’s say, a new or refurbished locomotive. How do you bring that stuff in? At one time or in phases? And that’s what I think our customers need.”
FREIGHTWAVES: What do you see as being a key takeaway from the recent supply chain challenges and last two years of the COVID-19 pandemic?
BECKER: “I’ll give you an opinion because I don’t think there’s one answer to the supply chain. In fact, either being on the side as a supplier or a customer, the one thing that I think helped everybody was transparency and communication.
“One thing that I know is very troubling is if you’re not getting enough information to make decisions, especially around production or availability of equipment. That’s worse than getting bad information or information you don’t like. … I need to know what you’re dealing with so I can make decisions in operations, etc.
“So I think the supply chain is going to solve itself with all the great players and people and the hard work that’s going in there. But I really believe the best way to help is to make sure that communication lines are open and we are transparent about what’s happening so people can make decisions.”
FREIGHTWAVES: Is there anything else you’d like to add?
BECKER: “I think it’s really important that we recognize the talent in my teammates at NRE for the job that they they’ve done for the last two — let’s call it three — years, with the passing of Steven, jumping into a pandemic, with the industry ebbing and flowing through that. It has been remarkable and incredible that the company is now positioned in a fighting way to go ahead and accelerate. And that’s not without a lot of hard work and a lot of commitment, and frankly, a lot of sacrifice. And I think they should be recognized for that.”