Union Pacific has become the seventh member of RailPulse, a group formed in 2020 that aims to accelerate the use of telematics technologies and GPS systems within the freight rail industry.
UP (NYSE: UNP) joins short line and logistics operators Genesee & Wyoming and Watco, railcar lessors GATX (NYSE: GATX) and TrinityRail (NYSE: TRX), railcar manufacturer Greenbrier (NYSE: GRB) and Eastern U.S. Class I railroad Norfolk Southern (NYSE: NSC).
The group’s goal is to provide real-time information and sustained visibility of a railcar’s status, location and condition to shippers, railcar owners and railroads, according to a Tuesday RailPulse release. The coalition expects to introduce a platform in early 2023 that will further this goal. Members are facilitating trials of various remote monitoring equipment options that could be used as part of the platform, and the group will share its conclusions from these trials ahead of the platform launch.
“The use of technology to increase shipment visibility is critical for ensuring we meet the needs and expectations of our customers who rely upon us for safe and reliable service,” said Kenny Rocker, UP executive vice president for marketing and sales. “RailPulse’s mission to establish new standards and support GPS and telematics use enhances customer experiences. Ultimately, an improved shipper experience can attract more shipments to the North American rail network.”
UP updates investors on network improvement progress
UP’s involvement in RailPulse is just one aspect of how the railroad is incorporating technology to facilitate operations.
UP is also using Fast Gate, a technology aimed at helping truck drivers pick up and drop off containers as quickly as possible at intermodal terminals, according to Rocker, who was speaking at a Tuesday investor conference sponsored by investment firm UBS.
The railroad launched Fast Gate in San Antonio last summer, and it will begin installation at UP’s intermodal yard in Dallas this week. It will also launch the technology in Mesquite, Texas, this summer, Rocker said.
These technological deployments come as Rocker and UP CFO Jennifer Hamann said at UBS that the railroad is continuing efforts to improve network fluidity. UP and other Class I railroads had gotten flack in April from the Surface Transportation Board and rail shippers for deteriorating rail service in the first quarter of this year.
UP is working proactively with customers to reduce freight car inventories, and it is adjusting transportation plans to fully utilize crews and locomotives, according to Hamann. The railroad has over 500 employees in the training pipeline and has graduated almost 300 year to date, with “another couple hundred” set to graduate this summer. UP has also sought to improve freight car velocity, she said.
“Over the last couple of weeks, progress has been a little choppy as we’ve experienced some reduced crew availability over the Memorial Day holiday and a few weather-related outages. Overall though, we’re pleased with the positive momentum, but we understand obviously that there’s still work to be done here,” Hamann said.
As a result of higher fuel prices and cost inflation, Hamann said a full-year operating ratio of 55% is “unlikely.” Operating ratio is a metric that investors sometimes use to gauge the financial health of a company, with a lower percentage implying improved financial health.
Meanwhile, there are capacity constraints at UP’s inland ports, although it is considerably less than the constraints experienced in 2021, according to Rocker. The constraints on the international intermodal side of the market stem from a slowdown in processing ability at the distribution centers and warehouses, which in turn is impacting truck and chassis supply, he said.
“Real time, the fluidity is OK [at the Global 4 terminal in the Chicago area]. We’re monitoring it very closely. We have a few boxes that are stacked today, which means we need to really have a lot of scrutiny around that,” Rocker said.
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