Is there any value in managing railcar logistics? This is a question often asked at shipper gatherings across the country, mostly via telecommunications in todays’ environment. Following is a couple of out-takes from late 2020 and early 2021 Zoom conferences where shippers spoke of rail freight, logistics and a whole host of other items.
“I think its definitional” says one shipper. What do you mean definitional? Asked the host. “Consider this”, says the shipper. There are many definitions of management all the way from looking at daily tracking reports to see if your railcars are moving to identifying key players along your route of movement and talking to them on an almost daily basis to be sure your railcars don’t get stuck. “Also don’t forget”, says the shipper you need to remember to expedite empty railcars as well so you don’t end up without a railcar to load. Another shipper states, “the railroads are going to only go as fast or as slow as they deem necessary, there’s no use managing shipments until you determine they’re way out of whack.”
These two shippers offered a couple of differing viewpoints one strove to manage their railcars and railcar movements intensely and the other professed to only manage them on an exception basis. We’ve seen a lot of these differing opinions over the years. When tracking of railcars first started there were a few select companies that “managed” railcar movements. That was back in the days of dial up communications. I remember those times because I worked for a number of years at a Class I railroad and we’d send “wheel reports” to Railinc and they’d consolidate reports across railroads and make it available to third parties and shippers alike. While those that dialed in would get thousands of Car Location Messages (CLM’s) there was no easy way to look at the overall picture of what was happening with ones’ railcars. The next step in my career was to establish a company that actually took these messages and converted them into management reports while supporting the daily aggregation of shipper’s movements across all reporting railroads. We were one of the first in the industry using ASP technology. We found that shippers really cared about where their railcars were and wanted to know things, like where are the railcars consistently hanging up, how long are my customers holding the cars, how are my origin shipping locations doing on turning railcars, etc. They also needed details such as constructive placement, actual placement and release data to help fight demurrage bills. Coincidently during this time railroads were also developing a reporting mechanism that showed basic railcar movements and were giving it to select customers at first and then shortly thereafter making it available to basically anyone that wanted to sign up with them. They were recognizing that the movement of railcars was important to a lot of their shippers, port connections, interchange locations and destinations to understand product flow and to manage product inventory. Skip forward a decade and you’ll find the visibility and quality of the data significantly better than it has ever been. Today we have better AEI (automatic equipment identification) communications, GPS information, Artificial Intelligence information gathered by sophisticated cameras and software and a host of other data gathering, consolidation or disaggregation and dispersal mechanisms. Despite having superior data, now and in development, we still have the age-old requirement of managing information generated from the data to understand and communicate with those responsible for a railcars movement to get it back on track. There are fewer people managing the same or additional shipments requiring the reporting and process development to be more-accurate and more-timely delivered.
Closer to home we, the Tealinc team, has found tremendous value in managing railcar logistics for our customers. One of our customers who has several shipping and receiving locations discovered that by redistributing railcars amongst their locations and disbanding a pooling approach they have saved significant railcar movement costs and decreased their leased fleet while transporting the same amount of product. Another has identified two interchange points that would consistently delay their shipments while the hand off between railroads struggled for consistency. Bringing this to the attention of the railroads involved has sped up their shipment time by two days. And a third found that by speeding up some interplant operations they could remove five percent of their fleet requirements. These are just a few examples of many. As you’d imagine I’m a bit biased when asked the question, “is there any value in managing railcar logistics”. I’ve worked a decade for Class I Railroads with about a forty percent of that time in managing railcar and train logistics. During that time, I’ve learned that the railroads are masters at managing their own railcars empty and loaded. I’ve also spent two decades working either directly as a railroad customer or a supplier and consultant to the railroad industry. During that time, I’ve learned that the railroads don’t automatically manage your railcars or logistics. If you’re not using railroad supplied equipment, you’re using private railcars, and that means the private railcar shipper needs to manage their own railcar logistics. In our experience it does have significant value.