Production of next-generation Acela Express fleet underway
Stadler unveils TEX Rail Flirt DMU
Siemens invests in remote monitoring specialist Wi-Tronix
DB consortium selected for California high speed rail
Judge puts the skids on state’s proposed rail trail
Amtrak's CEO shares his vision for rail's future
Flight Rail: a new type of train?
America’s short lines play the long game
New York rail operator bolsters security after London bombing
Back in the spring of 1992, a meeting took place between multiple railroads at a farm estate in remote Missouri. The purpose was to coordinate building an interline service track and trace data system that could help predict railroad freight performance at the carload level.
Interline reporting functionality was important because the gathered rail executives knew that typically more than half of their carload freight – as well as their intermodal containers and trailers – moved from origin to final true destination across at least two different rail company tracks.
Therefore, interoperability of a trip data system was essential. At least to those pioneers.
Their business plan for shipment transparency was to be done at the freight car level. Track trains was less important.
Car track and correct planning was going to be possible because the essential tracking device was to be the so-called automatic equipment identification (AEI) radio frequency tags – two of which were to be placed on every railroad car operating in interline service across Canadian, Mexican and U.S. railroad tracks.
Their business concept was built upon utilizing the more than $500 million AEI railroad tags – plus strategically placed AEI tag readers.
Where is the railroad industry a quarter century later?
In the autumn of 2019, a gathering of railroads and rail freight shippers heard a shipment performance update.
Amidst the autumn colors of Vermont, CSX railroad shared its prototype carload freight service application. The presentation was made by Arthur Adams Jr., Vice President of Sales and Customer Engagement at CSX.
This CSX information technology package has been periodically discussed as a step forward in customer service going back at least to the company’s March 2018 shareholders meeting.
I would like to congratulate CSX for its Northeast Association of Railroads and Shippers (NEARS) railcar trip compliance report card system.
For the rail industry, it’s been a long time coming. What has taken so long?
We also might ask, just how revolutionary is this freight railcar level trip performance tool?
What is it?
The basics of the CSX railcar trip compliance report is the simple matching by customer lane of what essentially CSX has offered as its scheduled performance against what it is in effect able to deliver.
Figure 1 represents my redrawing of the CSX graphic representation. As of October 6, CSX had not released its presentation. There may well be other features in its report card, but at the core it is a delivered performance as against expected CSX delivery reporting.
Initially, it appears as a percentage graph that is plotted over a constant period, such as quarter-to-quarter in this representation.
What it is not
The early look from Burlington, Vermont last week was treated somewhat as state secret. For whatever reason, CSX would not release its one graphic screen slide.
That’s odd because these kinds of specific lane and customer performance graphs have been widespread for about a half decade or more from truckers and brokers.
Even the commercial airlines routinely make their scheduled flight performance “grades” available to customers seeking out a best price versus most reliable service and connections.
And for railroad customers that want to know how well or how poorly a railroad is performing for them, for years they have been using third-party information technology-based software logistics companies to monitor CSX and every other Class 1 freight railroad.
Because so little came out of that long-ago Missouri meeting, an industry that audits railroad performance sprung up. Three or more such third-party logistics service performance monitoring companies were present this past week. These logistics and service auditing companies filled a transparency gap that my generation of railroaders for what ever reasons just decided not to.
What is the best that railcar loading could be?
A 100% achievement of carload placement is mathematically possible. However, in the case of a theoretical four- to six-trip segment links between origin shipper dock and final receiver carload dock, a 90% performance is more likely to be the best achieved pattern. A 100% grade would require a zero error first car movement to last car placement precision. Frankly, there are few carload railroad routes with that kind of meticulousness performance. At least not yet.
On the plus side, selected data reports do suggest continual performance improvement at both CSX and other companies that are trying the precision scheduled railroad (PSR) business model.
What other railroad might soon release trip scorecards?
Canadian National has told stock investors that it is working on a suite of such performance monitoring applications.
Even BNSF, which is not a PSR business process railroad, is working on different customer inventory-in-motion report card systems to improve final car delivery accuracy.
What is needed is a sense of urgency
There is today a recognition by senior rail officers that rail freight isn’t shippers’ first choice like it might have been through World War II. CSX admitted that the rail sector might only have today about an 8% market share. Adams mused about perhaps gaining a 1% share if things like trip compliance demonstrated significant service upside for customers.
Unfortunately, regaining market share after fumbling the IT service transparency game over so many years might be a real challenge.
How bad is the rail share challenge?
The answer is complex. It depends upon the commodity. What’s the market distance length?
And it largely depends upon what the trucking sector is doing to improve. Trucking companies certainly are not standing still. They are a moving target.
Experts in freight market share at FTR in Bloomington, Indiana, shared the following evidence about how rail freight plays or doesn’t play a role in freight movement across the USA.
Figure 2 identifies modal market share as FTR experts Tod Tranausky and Avery Vise calculate it from their proprietary freight data base. On a ton-mile basis, rail share is ~28%. Four decades ago, rail ton-mile share was closer to 40%.
If tonnage is the measure of freight share, rail drops to about 17%.
Figure 3 is even more telling since it speaks to the share of shipper paid dollars to move their freight. The railway share dropped from about 3.4% as measured by FTR in 2012 to about 1.5% by 2017.
To CSX and the other six Class 1 railroads, this mode share decline is a critical mass event. The pattern is troubling, and it is going to take more than a few applications to reverse this market loss.
Aside from a few high-density volume and long-distance market corridors (like Los Angeles to Chicago), rail market share is not growing. Not according to this evidence.
The challenge of reversing the rail share decline is difficult but need not be impossible. But it will require a lot more than trip compliance applications.
Still, bravo CSX! Please, shows us more. By when might we expect the interlined partner trip compliance beta test version?
Both NEARS and FTR are among a group of professional organizations that welcome independent media coverage of their logistics events and presentations. Their meetings often contain materials not covered in the general business section of news media.
Both organizations encourage respectful contrarian points of view.
The views above are those of this Market Voice. Special thanks to Eric Starks and to Scott McCalla for their insight and openness.
This article first appeared on s29755.pcdn.co
About this website
Railpage version 3.10.0.0037
All logos and trademarks in this site are property of their respective owner. The comments are property of their posters, all the rest is © 2003-2020 Interactive Omnimedia Pty Ltd.
You can syndicate our news using one of the RSS feeds.