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Commentary: Cloud-based tool has been supply chain breakthrough

Linking origin foreign port containers with initial North American intermodal trains

The Port Optimizer provides visibility to containers en route to the Port of Los Angeles. (Photo: Jim Allen/FreightWaves)

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

Do you get your railroad freight intelligence from ports? Most folks do not. But in today’s digital world, commercial news intel can be a different ballgame.

Wabtec and the Port of Los Angeles teamed up for a software-based means of improving intermodal container transport between Asia and inland freight-importing customers within the United States. It is not just for ships or trains.

Port of LA projects oncoming container trade volumes. (Image courtesy of Wabtec)

Weston LaBar, the CEO of the Harbor Trucking Association, recognizes the monitoring and container movement ETA service as an innovation for the trucking members. He offers this salient observation as testimony: “Having a single (digital age) portal, as a single reference point, can offer levels of inter-mode efficiency long sought but not quite delivered.”

The same process improvement is offered by this port-provided tool for railroad intermodal trains.

Over the summer and into the autumn months this year, the two big Western intermodal train companies, BNSF and Union Pacific, were caught a bit short of resources to handle a sudden swelling of inbound ocean containers that needed to continue moving toward inland American destinations across their railroad tracks.

The reason? A lack of visibility of containers in motion on the Pacific Ocean heading toward the U.S. West Coast. In effect, the railroads suffered the same kind of supply chain “blindness” that railroad customers often endure. Cargo coming toward them as train traffic is not seen in near-real-time motion, and ETA railroad final delivery to them is something of a hit-or-miss proposition.

Results are often a lack of necessary empty platform railcars, crew shortages and sometimes even locomotive power shortages to get the loaded trains moving eastward. That hurts supply chain delivery. It also hurts railroad profitability.

With the optimization of a transparent supply chain view, this gets streamlined. The enabling service is called Port Optimizer, an information portal launched in 2017. The portal provides digitized container-focused maritime movement data for the beneficial cargo owners and the carrier and port supply chain stakeholders.

The Wabtec portal service provides secure channel access to supply chain players of record. On a technical basis, Port Optimizer is a cloud-based software integrating data solution to the black holes of lost-in-space-and-time cargo movements. 

Port officials, vessel schedulers, stevedores, drayage truckers and the railroad train operators all get to share in the same container movement data set package.

The service also marked a change to Wabtec’s business portfolio. Wabtec is no longer just a builder of locomotives and railroad industry train-dispatching and train safety control equipment systems. Wabtec Corp. is clearly advancing into becoming a holistic provider of digital solutions and value-added services for its freight and transit customers.

In my interview with Scott Horning, Wabtec’s vice president for train performance and automation solutions, he and his team emphasized that the Optimizer provides users with packaged information just like modern phones provide applications that give immediate insight to otherwise complex pieces of data.

What is Port Optimizer actually doing?

  • Think of watching the latest Amazon purchase coming your way.
  • The Optimizer application follows different containers moving from pier to vessel to truck and to rail train in an across-the-modes fashion.
  • It is tracking the container and the changing ETA times.

What users want is a means to translate that enriched and formatted intelligence into savings. By September 2020, nine of the Port of LA’s top 10 ocean carriers were feeding data into the Optimizer application.

Railroad carriers could become customers like the port for rail intermodal domestic logistics. However, today the railroads are “beneficiaries” if they only take Optimizer international container digital feeds directly into the railroad train management systems.

The container trip optimization application gives supply chain users the equivalent of savings that Wabtec’s train performance software named the Trip Optimizer system does for railroad planners. That locomotive use application is installed on over 11,000 locomotives globally. 

By Wabtec’s calculation, its optimum rail locomotive software can save an estimated 10% of railroad locomotive fuel. In context, within North America, railroads spend more than $7 billion on diesel fuel each year. 

Here is the takeaway message for the rail market audience: Regardless of a transport or logistics manager’s objectives, the digital age name of the game is to estimate the dollar savings provided by an application like this. That kind of management thinking certifies the value proposition.

For Wabtec, the digital electronic sector already provides nearly 15% of Wabtec’s total sales. It is a growth tool.

Who might be Wabtec’s next target for cross-modal global maritime-to-rail efficiency? It did not reveal its customer target. But to this columnist, it would seem that the Port of Long Beach might be next up for deployment.

Port of Long Beach Executive Director Mario Cordero stated recently that his adjacent port needs an “Amazon state of mind.” He defined that as “efficiency plus predictability plus reliability” in moving containers out of the port complex faster to get to markets. 

Which Class I railroad might see the subscriber value of port optimization into a rail-centric service? The simple answer might be whichever railroads see an internal direct cost savings linked with customer satisfaction and market share growth.

What, colleagues, is your strength-and-weakness assessment as to railway integration?

Acknowledgment: Wabtec Corp. ( extended technical interview on Nov. 24 with Scott Holland, VP of network and logistics; and Rene Alvarenga, senior director of digital product management.

Jim Blaze

Jim Blaze is a railroad career economist with an engineering background and a strategic analysis outlook. Jim’s career spans 21 years with Consolidated Rail Corporation (CONRAIL), 17 years with the rail engineering firm Zeta Tech Associates, 7 years with the State of Illinois Department of Transportation in Chicago urban goods movement research, and two years studying what to do with the seven bankrupt and unrecognizable Northeast railroads at the federal agency USRA. Now primarily a teacher and writer, Jim likes to focus on contrarian aspects of the railroad industry.