Freight railroads want to let companies track shipments to compete with trucking
Freight railroads want to let companies track shipments to compete with trucking
When something gets imported to this country, there’s a good chance that it’s going to spend some time in a truck or on a freight train in order to get to where it needs to go.
If it’s on a truck, the shipper and recipient can probably track it pretty closely, as you’d track an Amazon package. But if it’s on a train? Nope.
The freight industry wants to change that. As of this month, half of the country’s six large freight railroads have signed on to a joint venture that would enable GPS tracking of rail cars. The idea is that if it’s easier for companies to track their rail shipments, maybe railroads can take some business away from trucking.
Freight rail companies are really profitable, said Jason Miller, who heads the department of supply chain management at Michigan State University. But, he said, one of their main sources of business is hauling coal. And we’re just not using as much of that as we used to.
“With coal as a waning industry, the railroads have to find growth opportunities elsewhere,” Miller said.
And those growth opportunities are in hauling things that often end up on trucks, like furniture, food and beverages. So to compete with trucking, Miller said “they have to have better visibility.”
That’s industry jargon for what this effort, called RailPulse, is all about, letting customers track where their stuff is.
“I find it amazing myself that it has taken this long,” said Lisa Ellram at Miami University in Ohio. She explained that if rail companies can figure this out, they could do well for themselves because shipping by rail uses a lot less fuel than trucking.
“Companies are very interested not only in saving money, but reducing the environmental impact of their transportation,” Ellram said.
So far, RailPulse has done a pilot of its GPS system on 3,600 rail cars, said David Shannon, the company’s general manager.
“The ultimate goal is about 1.6 million rail cars that traverse the North American rail network. So we’ve got a long, long way to go,” Shannon said.
And that long route involves convincing the other big freight companies, lots of smaller railroads and others to get on board.
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