TrinityRail [NYSE: TRN]

Throughout my career, I have focused on optimizing logistics, identifying opportunities to reduce costs, streamlining operations, and eliminating waste. My focus has been lean manufacturing thinking and the seven types of waste in lean logistics. Specifically, I have focused on Taiichi Ohno’s seven types of waste. These include overproduction – manifested in the rail industry as unnecessary railcar staging – and issues like waiting, unnecessary transportation, excess processing, surplus inventory, unneeded motion, and costly corrections.

Applying these principles to the supply chains I have managed has consistently produced outstanding results. It was not uncommon to identify opportunities for 10 to 25 percent reductions in logistics costs and increases in revenue – profitability win-win. This approach has illuminated the importance of addressing even minor inefficiencies and getting to the heart of operational challenges. In recent years, one of the most compelling profitability metrics I’ve seen in the last 10 years is the opportunity to digitize the rail supply chain.

In today's rail environment, we operate in days, and many rail systems are mainframe legacy-based with limited ability to acquire data. Rail often relies on 1980s RFID technology and old data management systems. We get railcar location information 60 to 80 times a month or roughly 2 or 3 times per day. The industry doesn’t always know where railcars are; they pass an RFID reader sprinkled throughout the supply chain, and then we wait 8 to 12 hours until the railcar passes the next reader. RFID readers are not applied throughout the entire rail network; they are mainly installed on Class I main lines, creating gaps at origin, destination, sidings, shortlines, terminals and port operations.

These gaps in visibility mean that we are heavily reliant on transactional communication between shippers, ports, Class I’s, terminals, shortlines, trucking companies, transloaders and the host of people who work to get our rail goods to market every day.

This manual, email-driven, text and phone-call-driven process costs us time, and time has huge financial value in logistics. When we first started talking about GPS in trucking, I heard similar resistance to what we hear in the rail industry today. 'I know where my trucks are; drivers are not going to accept a GPS on the truck; it’s too expensive to put GPS on every single truck, trailer, chassis, or container.’ Today, the trucking industry invests in this technology because the value of real-time visibility is absolute. The ROI far outweighs the cost, and GPS on a truck has become not only an industry norm but a regulatory requirement for hours-of-service management.

When I think about the future of rail visibility, it includes GPS, and then beyond GPS; it includes data collected from shippers, consignees, ports, terminals, shortlines and Class I's. We automate communication, ensuring that there is true realtime visibility of where railcars are. We use the data collected to identify exceptions and issues; we use the data collected to collaborate with each other. To call a vessel to port because the train has or is arriving, to call trucks to a transloading facility, crews to an interchange point, invoice transfer of liability or determine when a railcar has been offloaded and ready to be empty released. Using this data and automating communication means reducing non-value-added activity where people check multiple systems, have multiple spreadsheets, and have multiple meetings a day to figure out where assets are.

For me, the value in digitization isn't in capturing, processing, and visualizing the data; the power is in what issues we identify that we can't see today.

Digitization offers a wealth of opportunities beyond mere data collection. It enables us to uncover and address inefficiencies that have remained hidden. The implications are profound: reducing a railcar's cycle time by even a day could significantly boost revenue and efficiencies. For instance, if we reduce or eliminate one day of cycle time for a 100 railcar shipper – it’s a finding that is potentially worth $1.8M in net revenue – because we can use the same railcar asset to get an extra trip. Extrapolate that across the North American rail supply chain and the revenue opportunity could be upwards of $20 billion a year.

For me, the value in digitization isn't in capturing, processing, and visualizing the data; the power is in what issues we identify that we can't see today. The power is in what we do with the data once we have it. Real-time GPS data feeds that give 96 position updates per day provide opportunities to eliminate the seven kinds of waste, increase our efficiency and drive value throughout our logistics organizations.

The future of rail visibility includes GPS and beyond that, including data collected from various supply chain segments facilitated by advanced technologies like cloud computing and IoT devices. This move towards digitalization will streamline communication, leveraging real-time data and predictive analytics to eliminate the need for manual checks and meetings.

TrinityRail is not just adapting to these changes; we're leading the way. We're harnessing the power of real-time autonomous data and communication to lead the industry into the future. Adopting this technology is a logistics game changer and will transform how we manage, maintain, and drive value within the supply chain. It is for the benefit of everyone - railroad, shipper, ocean carrier, transload, shortline, trucking organization - that we invest in and take advantage of the data driven by GPS.