Commentary: High-tech railcar/inventory management

Breakthrough telemetry car and customer TMS inventory transparency ahead

As previously described by multiple reports, customers have not been happy with the tracking of their valuable goods on freight trains. But within the next three years, shippers should see significant improvements in the age-old question, “Where are my goods?”

Steps underway now would introduce smart communicating devices to supplement the older RFID tags and manual recording used to date. Why? In part because railroads themselves want better train management data.

And today’s senior rail management understands that shippers want improved certainty about final carload delivery times. They want a truck-like delivery performance.

If they do not receive that performance, it costs customers money. How? They might lose some sales. They must carry too much additional on-hand inventory. 

Furthermore, a lot of the railroad cars are leased or owned by rail freight shippers. Thus, if those private rail cars are delayed, the shipper has to lease or own even more cars than is optimal. 

Telemetry devices are more affordable these days. And the constant data updates improve scheduling of car movement events.

Telemetry is the process of recording and transmitting the readings of an instrument from one place to another. Here is how telemetry sensors work.

An onboard physical sensor can measure, then transmit from a stationary or a moving unit by exact location to a receiver component.

The onboard sensor can be selectively built to capture the following data elements: optical data, vehicle dynamics, location change GPS, friction or resistance data, temperatures, voltages, displacement or pressure data, vibrations, and other parameters.

The next sequence is a broadcast message. It typically is transmitted across a subscription cell phone network. But it could also be sent over a private railroad communications band (like the positive train control train-dispatching network).

Finally, there must be a series of data servers that captures, sorts and then applies software analytics to the data received.

For the railroad freight industry, there are two quite different business case uses.

There are railroad company internal train operational uses. But those uses do not directly impact a shipper’s utility.

The second utility, if offered, enriches the customers’ TMS supply chain functionality.

Two competitive services 

There are multiple companies out in the market introducing better telemetry systems. Here we examine just two of them.

One is a joint venture company called Rail Pulse.

The other is an independent third-party vendor, Nexxiot.

Each of these companies has its own technical sensor devices. 

The commonality is that both companies offer near-continuous movement and selective health reporting.

The image below is of a device Nexxiot is already marketing across Western Europe and now here in North America.

The product name is the Globehopper Crossmodal sensor. 

The device is larger than the simple RFID AEI rail equipment tag introduced in 1990-95.

Nexxiot is already marketing its subscription-based service.

Nexxiot positions itself as a logistics supplier of TMS-relevant data applications. It is not just a sensor manufacturer. It has a business record from its work with railroads and rail customers in Europe. 

The Rail Pulse business partnership telemetry service was just announced. The partners are the Class I Norfolk Southern, plus the Genesee & Wyoming and Watco short line companies, joined by TrinityRail and GATX.

The venture would likely be staffed and managed as a joint subsidiary with its own design and manufacture, sales, and service group.

Rail Pulse business documents suggest an initial focus on railroad operational and railroad vehicle safety. That would include braking systems, couplers and doors.

So far, Rail Pulse has not described how its business will directly improve rail customer supply chains’ performance. However, there clearly should be such commodity logistics benefits that can piggyback on its devices.

Rail Pulse is continuing its design and testing work. They advertise entering the commercial market in a larger way by 2023.

Rail Pulse does have one business startup advantage: Its members together control a potential car fleet universe of about 300,000 units. That is about 20% of the North American fleet.

For railroad shippers, or for shippers today using trucks and considering a switch to more rail, their benefits will be from data package applications, with less benefit overall from the raw hardware.

The durability of the sensors and the self-powered capabilities are one thing. But the real value comes with the transmittal of packaged, usable information to the customer’s supply chain.

What the customers are going to need is an easy-to-capture messaging application. That is software. 

That software-delivered intelligence needs to integrate directly with a customer’s internal inventory control software — which logisticians refer to as the transportation management system. The TMS systems control the separate ordering, moving, receiving, storage, and then the delivered or sold merchandise stage. 

Supplying the critical rail movement segment information is what will eventually prove how these new smart devices are in fact going to make railroad freight a preferred future mode of choice. Or not.

If they are only a railroad carrier internal safety system, then something will be badly missed as a mode shift game changer.

Hmmm? Mark me as optimistic. How about you?

Simple market supply/demand logistics chain

Carriers including rail, truck and ships are in the middle of the process.

Communications ordering, tracking and fulfillment digital links are considered as TMS enablers — or data feeds.

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.