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NewsRailTechnology

Telegraph CEO: How technology can bring about freight rail renaissance

‘There’s a coming change in the industry, no doubt about it,’ Ligon tells FreightWaves in Q&A

Harris Ligon has great hopes for freight rail, and he thinks you should have great hopes too.

Ligon founded Telegraph, a rail technology company that has developed a cloud-based operating system serving the railroads, shippers, 3PLs and railcar leasing companies. The technology aims to streamline data from existing sources such as emails, spreadsheets, flat file exchanges and electronic data interchanges and convert that data to an API and a user interface that is flexible and usable and improves the operational workflow. 

Ultimately, Telegraph’s goal is to make freight rail easier for shippers to use and to encourage potential customers to shift more business to rail because of that ease of use, according to Ligon, who serves as the company’s CEO.

Ligon started in the rail industry as a management trainee for BNSF, where he was dispatched to different field locations in Kansas, Montana, New Mexico and Texas and learned how to manage rail operations across specific territories. After BNSF, he moved to Norfolk Southern, where he was involved in network planning activities for NS’ intermodal product. 

After NS, he joined the self-driving trucking startup Otto, which eventually was acquired by Uber Freight. Through his experiences there, the idea of forming the company Telegraph hatched.

This question-and-answer interview was edited for clarity and length.

FREIGHTWAVES: How did the idea for Telegraph come about?

LIGON: “I was in Atlanta one day with a handful of enterprise customers, and I remember having a lot of conversations about what Uber was doing really well. I remember hearing some encouragement that we should also think about air and ocean and rail as opportunities for us. I knew that there were plenty of companies that were operating in air and plenty that were handling software and building out vertical and horizontal solutions for maritime. But I hadn’t heard anybody doing anything in rail. 

“And so I started to ask a lot of questions. I heard that it was still taking these major enterprise customers two weeks to get prices back from their Class I railroads and that they were having to deal with a ticketing system just to find out where railcars were. That they were still having to dispute multimillion dollar payments and handling paper checks to just get their bills handled. 

“And I just thought, after my experience at Uber Freight, that there’s gotta be a better way. There’s got to be a better opportunity to make the rail network and shipping by rail more accessible to everybody in the supply chain. And if we do that and we do that really well, we have the opportunity to reduce greenhouse gas emissions and take trucks off the highway.” 

FREIGHTWAVES: Why have there been challenges in creating a network visibility platform for freight rail?

LIGON: “One of the things that I think has scared a lot of people off is that the railroad industry — because it is somewhat insular, it is consolidated and it is big — is that a lot of people don’t understand it. And I think it really takes a lot of diligence to understand and build relationships in that space and to actually see the railroad as an opportunity and as a good impetus for supply chain savings and supply chain efficiency, versus something that just simply needs to be fixed because it’s broken. And I’m not somebody who believes the rail network is broken. I actually believe it’s actually about to go through a massive renaissance. And I’m excited to have a front row seat along with the team to be able to help usher that in.”

FREIGHTWAVES: Why does that perception about the freight rail industry exist?

LIGON: “A lot of people tend to forget that the railroad is a living, breathing network. It is an entire ecosystem within itself. I think that there are ways that it operates, ways that it functions, ways that it transmits information that a lot of people just don’t necessarily have a good understanding or awareness of. And I think because of that, there is a hesitancy to want to dive in. Railroads, unfortunately, have been given this moniker that they’re slow and they’re lumbering and they’re not responsive and you can’t see anything. But I think there’s a really cool opportunity to change that narrative because, actually, the cool thing about a controlled network is that you should be able to see anything anytime, anywhere.

“The challenge is that it’s really just a technology opportunity to up-level that infrastructure. One of the challenges for the rail industry is you have seven major players operating 90% of the track in North America, and there’s this belief that if those players don’t adopt a solution or don’t allow for change, it will never happen. Our viewpoint is that those seven large players … can actually be big proponents for that change. And they can be the ones that are going to drive a different narrative. Our viewpoint is that even if one of those players were to adopt or design or deploy the world’s best solution for freight rail, the reality is that it only applies for that one network. It doesn’t translate across all of them.” 

FREIGHTWAVES: What needs to happen to get that broader understanding about how the freight railroads work and how other stakeholders can work with the freight railroads?

LIGON: “I look at it like this: We see we have more demand for our product and services across railroads, shippers and 3PLs. We are just overflowing with demands for feature requests. I would say that we view everybody in that trifecta as an interesting partner. 

“In many cases, we’re working directly with short lines to handle some of their problems or challenges around visibility. We’re helping them predict when their arrivals and interchanges are going to come from the larger railroads because they don’t have access to that … [and so they can plan] their locomotives and their train crews.

“For 3PLs, we’re helping them manage the pipelines that are going into massive chemical and steel or lumber plants. And for shippers, they’re getting the feedback from all of their providers, and they’re getting to see those things in real time. 

“And so I don’t think there’s necessarily a special sauce about how to kind of approach this. I think it’s actually fundamentally just doing the work. And it actually is real work: developing the relationships and actually understanding your customers — which, by the way, I don’t think a lot of people have spent a ton of time in the rail industry and have given it its appropriate amount of respect. And that’s actually one of the things that I think separates us is we actually do respect the industry.”

Telegraph Founder and CEO Harris Ligon

FREIGHTWAVES: Let’s backtrack a little bit. How does Telegraph work for those you’re serving?

LIGON: “We don’t believe that a single solution for just one of those participants is the right decision. We actually think that there’s an opportunity to collaborate across all three of those players. 

“And that’s one of the unique things that we’re doing in our system. We have instances where people are logging into our user interface and using our platform, and we’re seeing this kind of trifecta of a railroad engaging with the 3PL that’s also engaging with a shipper. They’re transmitting information through our system that goes beyond just, ‘Hey, where is this and when is it going to get here?’ It’s oftentimes an alert around, ‘Hey, this railcar has been undergoing maintenance’ or, ‘We need to hold off on spotting this railcar at a specific facility.’ 

“And so there’s a lot of really unique information that’s flowing back and forth between participants now, and it keeps them out of email, keeps them out of their spreadsheets and it allows them to be much more effective in their day-to-day work because there’s a new central source of record.”

FREIGHTWAVES: There’s so much talk about supply chain visibility. How do you see your company complementing or furthering that trend?

LIGON: “As I mentioned before, North American rail infrastructure is the crown jewel of the globe. Nobody does freight rail better in the world than we do it in North America. However, rail visibility in North America isn’t the greatest. There are plenty of providers that are out there, but none of them are thinking about sequencing data and structuring the data and cleaning the data and serving it up to the users in the way that we are. And some of that is really just being utterly transparent about what’s actually happening. Those are pieces that provide a predictability layer that actually gives people some sort of confidence around when things are going to arrive and where they’re going to show up. We feel like we’re definitely in a position to be able to provide that.

“The STB [Surface Transportation Board] is attempting to advocate on behalf of all these different shipper groups. And [the shippers are] simply asking for a better understanding as to where their stuff is and when it’s actually going to arrive so they can handle it and they can flow their manufacturing facilities and [manage people needs] at their warehouses. That’s not a tall order. 

“I think [STB Chairman] Marty Oberman and the STB are going down an interesting path where they’re asking for more service information. They’re asking for biweekly reporting and metrics. I think the challenge is that the STB has to ask itself are they the best independent auditor of what that information actually is — especially when you can’t even go to the government website and actually find a dashboard to even read this. You have to download an Excel spreadsheet that’s dating back to the early 2000s, and then you have to cross-reference and do a lot of things just to find out what the average train speed was for all seven Class Is for last week. 

“Our viewpoint is we’re ingesting a lot of that information now and we’re working on some internal dashboards where you should just be able to visualize that and understand what’s going on anywhere, anytime, anyplace. And that is the right of the shipper to have access to that information because it’s their stuff that’s been moved around.”

FREIGHTWAVES: Is there anything else you’d like to share?

LIGON: “You’re hearing a change in the language from all the Class Is. Alan Shaw, [the CEO at] Norfolk Southern, is talking about his organization as being a digital logistics provider. Lance Fritz, [the CEO] at Union Pacific, is saying that there’s a great opportunity to do better and provide better transparency and visibility. You’ve got Katie Farmer, [the CEO] at BNSF, who has always been a big leader in the space of we need to think about what kind of technology we’re able to provide folks and how that fundamentally changes their growth objectives for the next five to 10 years. There’s a coming change in the industry, no doubt about it. There’s a really cool opportunity for long-term partnerships. 

“The interesting thing here is we’re one of the very few startups that are working in a space that has just a huge opportunity for change. This is the last segment of transportation technology that has been just kind of left untouched. And we just view this as a really unique chance to change the way that people at a railroad operate. No longer do we want people answering questions from their customers about where my shipment is and when it’s going to get there and that being 40 hours of their week. No, those people should actually be focused on going and growing the business on behalf of the railroad. 

“Same thing for 3PLs. Why is somebody paying you to visit seven different websites just to do tracking and tracing and then send them a spreadsheet? Over email? We should automate that. You should be working on solving additional problems or figuring out how to convert more of your fleet to a more environmentally friendly or cost-effective mode.

“For your shippers, there’s a lot going on in the world today. Wouldn’t it be nice if people just understood that their supply chains — regardless of what’s going on in China or what’s going on at the Port of LA/Long Beach — that there is some sense of security and safety and planning that goes into your rail ecosystem [so] that you can feel that this is something you don’t have to manage every five minutes because you don’t have the information?

“I just think that there’s a really unique opportunity where we build a dynamic team to go work with railroads and work with this ecosystem to simply make things better. Because at the end of the day, if the railroads grow, it’s good for the environment, it’s good for the transportation sector, it’s good for supply chain logistics. And in an inflationary environment, all of those things are good for the end consumer.”

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.