US railroad group wants to make tracking train cargo as easy as on Amazon
15/02/2024 11:00
By Lisa Baertlein
LOS ANGELES, Feb 15 (Reuters) - U.S. shoppers can easily
track Amazon packages to their front door, but big railroad
customers can't see the real-time location of shipments of BMW
luxury cars, fuel or fertilizer as they crisscross the country.
A U.S. coalition of railroad executives and their customers are
working to change that.
The project, called RailPulse, comes as the $99-billion U.S.
freight railroad industry seeks to bolster volume that has been
stagnant for more than a decade and as customers demand better
service. It is establishing standards and building a unified
railcar GPS tracking system. The effort, which relies on
collaboration between partners whose interests do not always
converge, promises to improve planning and ultimately service
and efficiency, participants said.
Alan Shaw, CEO of railroad Norfolk Southern NSC.N , said
the 200-year-old U.S. freight rail industry has been slow to
adopt certain cutting-edge technology. As a result, it can't
tell a carmaker like BMW the exact location of a load of sedans
as they move through the system.
E-commerce giant Amazon AMZN.O , meanwhile, has helped set
a standard for transportation companies. Railroads need to keep
pace, RailPulse founder Mike McClellan said.
"We want more people to feel more comfortable picking rail -
particularly this new generation of transportation managers who
are ... used to seeing things in real time," said McClellan, who
is also Norfolk Southern's chief strategy officer.
RailPulse envisions a revenue model where users pay a
one-time charge to equip railcars with tracking technology,
periodic fees for communications services and software updates
and a monthly subscription fee of $3.50 per car.
It aims to sign up all six major U.S. freight railroads and
is halfway there with Norfolk Southern, Union Pacific UP.N and
Canadian Pacific Kansas City CP.TO onboard.
It is also recruiting the nation's 600 "short-line" train
operators like partner RDC, a family-owned railroad investment
and management company. Other participants include railcar
leasing companies like GATX GATX.N and Greenbrier GBX.N ,
which are among the owners of the 1.6 million railcars in use
nationally.
Its first customer is global crop trader and processor Bunge
BG.N . Bunge, also a railcar owner, will have access to
RailPulse when the system officially launches in the third
quarter.
"We will be better positioned to efficiently move our
products and those of our customers ... from the farmer all the
way to the end user," said Terry McDermott, Bunge's logistics
director for North America.
DAUNTING CHALLENGE
The project is far more complex than tracking deliveries of
Amazon packages or pizzas from Domino's DPZ.N , which involve
one company, one customer, and one transaction.
The median length of a U.S. freight train is roughly 5,400
feet (1,646 meters), or roughly 90 cars, with a small fraction
exceeding 14,000 feet (4,267 meters). Trains include equipment
from multiple car owners and cargo from many customers.
Railcar location data typically comes from landside scanners
that provide location data at various points during a journey.
RailPulse will use GPS trackers, which are already federally
mandated on big rigs that rival rains for cargo.
While the lack of a railcar power source hindered adoption
of GPS technology, improvements in solar power and GPS
technology have changed that, said Josh Perkes, vice president
of Union Pacific's Loup Logistics, who leads that railroad's
RailPulse effort.
Still, large transportation data-sharing projects like
RailPulse are rare, said Dan Pellathy, a fellow at the Global
Supply Chain Institute at the University of Tennessee-Knoxville.
"The data collection alone is a pretty daunting problem,"
Pellathy said.
Companies also don't like sharing information with
competitors, he said. And even when they get over that hurdle,
data from disparate systems must be secured, standardized,
checked for accuracy and subject to the same rules across the
network.
Then it must be transformed into usable data that is
available to some users and hidden from others for reasons of
safety and confidentiality, Pellathy said.
One example of such an undertaking is the federally mandated
shift from paper to electronic medical records in the United
States - a project that has been in the works for more than a
decade.
Data-sharing technology is improving to meet customer
demands for more visibility, said Sandy Gosling, a partner at
consultancy McKinsey.
"That train has left the station," Gosling said.
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GRAPHIC-US freight rail volumes seen roughly flat as cargo
volume climbs https://reut.rs/3wexEuT
GRAPHIC-US freight rail volumes seen roughly flat as cargo
volume climbs https://reut.rs/49ANpe2
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(Reporting by Lisa Baertlein in Los Angeles and Timothy Aeppel
in New York)
((lisa.baertlein@thomsonreuters.com))