Many embrace the concept of the “digital evolution,” but its definition can vary depending on industry, location, and even the individual business itself. In freight rail, the practice and impact of the digital evolution depends on your role in our North American rail ecosystem.
There are four major groups of participants in our ecosystem: railroads, component suppliers, lessors, and shippers. Safety is a number one priority for all these groups, but they each have an additional, specific set of needs and concerns. Railroads are focused on improving service reliability across many areas, including reducing terminal dwell times. Component suppliers are concerned with product availability, reliability and life cycle cost. Lessors want the safest and most efficient railcar available for their customers. Shippers—ultimately the customer of the three other groups—is the segment to whom we all want to deliver the highest level of satisfaction.
The industry has been utilizing digital technology for quite some time to improve business. Examples include Enterprise Resource Planning (ERP) systems that create internal and external transactions, or Electronic Data Interchange (EDI) for the transmission of data between companies. Radio-frequency identification (RFID) has been around for decades, but the rail industry is now beginning to expand its use in new and efficient ways, including in daily manufacturing, production, and business flows. Many production facilities are implementing automation, robotics, and in some cases artificial intelligence (AI) to improve their manufacturing operations. But these examples only scratch the surface of what the digital evolution could mean for the industry.
The next generation of industry workers coming up the ranks today have an expectation of “data now,” and that is exactly the direction of the next digital evolution for our North American freight rail system. The focus is on not just greater volumes of data, but effectively analyzing data to influence the reliability and efficiency of our operations. With the right combination of data collection and analytics, we can continually improve our customer service, and perhaps more importantly, we remain competitive with over-the-road freight alternatives long-term.
Railinc is the industry leading data platform owned by the railroads and responsible for the management and processing of railroad generated data such as CLM messages, wayside detection, waybills, amongst many other types of freight rail related data. Railinc’s approach to data collection is a good example of how digital technology has been adapted to solve a pressing need in the freight rail industry through the use of data. A well-integrated data and messaging platform, Railinc has become the source for reliable timing of updates on shipments. Previously, obtaining near-real time information on a railcar’s location depended on the adoption of physical device technology. Automatic Equipment Identification (AEI) wayside readers were implemented in the early 1990s to harmonize the availability of tracking and tracing railcars with an efficient data stream. Though there are many prongs of value that were created by this digital evolution, it highlights the dependency between physical device technology investments with scalable and efficient data platforms.
Similarly, RailPulse debuted in 2019 as a not-for-profit organization focused on the aggregation of data from onboard telematics devices. An open platform that in no way limits market participation by onboard telematics device companies, RailPulse allows shippers the flexibility to utilize any transportation management software (TMS) to view the aggregated data. This concept has been proven at least once by Railinc and the Class I railroads, but this evolution leads us to two major questions:
- Who makes the investments in onboard device technology?
- Who owns the data from railcars?
Onboard telematics was first introduced to freight rail in the early 2000s, but the high cost of devices and limitations of battery technologies prevented full industry adoption. In more recent years, however, device cost has fallen more than 70% and battery replacement cycles have improved more than 50%. So as the adoption of onboard telematics is becoming more realistic, three interest groups have their sights set on this digital evolution:
- Those responsible for the maintenance of the railcar.
- Those that want to ensure the safety of the railcar as it moves across the continent.
- Those who are focused on the railcar’s movement to and from various destination points
Why should these primary stakeholders make the investment in onboard technology? Though the industry today has effective ways of maintaining safety, monitoring the condition of railcars during a trip, and receiving updates on equipment location, the addition of onboard telematics introduces richer insights at a much higher frequency. GPS location provides estimated times of arrival and validates updates to first/last mile deliveries. Key components can be constantly monitored, which helps parties responsible for maintenance be more effective at diagnosing the health of components before a railcar enters unrestricted North American interchange service. This more accurate and timely visibility improves operations planning, predictive maintenance planning, and customer service.
The answer to who owns the data from railcars is slightly more nuanced and will likely continue to evolve as the technology and the industry advance. But one thing is for sure—the digital evolution of onboard telematics is optimizing how our customers benefit from freight rail and is improving safety metrics across the industry.
Brad Myers is Executive Vice President and Chief Operations Officer at Amsted Digital Solutions.