COVID-19, PSR, and acceleration of technology adoption: Recapping Rail Insights 2020

CloudMoyo was proud to be a Platinum Sponsor of Rail Insights 2020. To watch the on-demand recording of the event webcast event, click here.

The coronavirus pandemic turned what was going to be a not-want-to-be missed event in Chicago into a virtual conference. Suffice it to say, we adapted!

The event pivoted around the state of the industry—and where it’s going, with insights from leaders like Kansas City Southern Railway President & CEO Pat Ottensmeyer, Genesee & Wyoming CEO Jack Hellmann, and CloudMoyo Co-Founder & CEO Manish Kedia. Railroads like Genesee & Wyoming have been activating business continuity plans to keep providing uninterrupted service to customers, drive sustainable safety, and move assets along a fluid, resilient network.

Here are some takeaways from the conversations at the table:

COVID-19 and the rail industry

With COVID-19’s impact on the rail industry being so top of mind for railroads these days, it was a topic that popped up throughout the event. Pat Ottensmeyer outlined a picture of COVID-19’s impact on the supply chain and cross-border relations with Mexico. We need to have a greater alignment of priorities, specifically relating to the performance of supply chains, said Pat, and with a designation of what business is deemed essential. This’ll help keep North American supply chains performing at high levels.

From the shipper’s perspective, John Ward, Executive Director at the National Coal Transportation Association noted how the pandemic’s effects have created an interesting, evolving environment. And COVID-19 certainly hasn’t helped. The quarantine slowdown hit coal hard, and the short term outlook has been adjusted to predict that 2020 coal production is going to be down 23% from last year.

Many railroads may be asking, what does this pandemic mean in a business context? How to respond? In light of this, we’ve reimagined what we’d do differently going forward. To prepare for the unexpected, we are coming up with recommendations in real-time. automating processes is enabling optimization for the future while handling the critical needs of the present. This is making it easier for the people who are keeping the engine of transportation going to look ahead.

What was encouraging to hear was how railroads are responding by adapting as needed, delivering on their promises to their customers, and making sure that employees are provided with safe work environments. “Critical infrastructure designation underscored the role of short lines in transportation the commodities essential to daily life,” said Jack. In retrospect, maybe the impact of COVD on the industry isn’t as severe as you would think, and that’s a testament to the resilience of the sector. Manish also commented on the unsung heroes in this pandemic, essential workers that are a pivotal part of rail transportation and the delivering of essential goods to our communities.

Precision Scheduled Railroading (PSR)

Technology adoption has played a role in KCS’s keen focus on business growth and service excellence. It’s been central to their own in-house PSR initiative, which has given the Class I a “new way of looking at things” in addition to driving the kinds of metrics that PSR promises: increased efficiency. KCS had a desire and interest to embrace PSR since 2019, said Pat. But instead of primarily focusing on improving operating efficiencies, KCS’s PSR approach has been marked by a keen focus on service and growth.

How is PSR affecting short lines? Jack was asked this question at the conference, no surprise since it is Class I railroads rather than short lines who are adopting this methodology pioneered by Hunter Harrison, rather than the short lines they partner with to deliver goods across the nation (often the first and last line of the track).

Short lines are shock absorbers for PSR, commented Jack. Yes, amidst changes, they suffer plenty of shocks. But short lines have proved to be agile and adaptable, clean sheeting their operations and matching Class I schedules. When assets are moving, when the system is fluid, and when customer service is strong, PSR is as beneficial to short lines as it is to Class Is.

Overall, it’s a process of continuous improvement.

Driving safety and network health with data

Speaking at Rail Insights, Rob Benedict, Senior Director, Petrochemicals, Transportation, and Infrastructure at the American Fuel & Petrochemical Manufacturers Association (AFPM) reminded us of the impacts of timely and accurate data on both safety and the economic health of the rail sector. The use of data-driven and evidence-based approaches to rail safety (for example, electronically controlled braking systems) enable you to focus on root causes of accident prevention, ensure track and infrastructure integrity, and address human factors at the root of safety risks.

“We urge constancy in data,” said Rob. “Not only with data to support safety policy, but also economic data to support the health of the network. To that end, we urge across railroads consistent reporting of data and timely sharing of data so that issues can be quickly resolved.”

Technology adoption: More critical than ever

Conversations around COVID-19 bled into reflections on how railroads are rising up to the challenge and make sure operations continue in a safe, methodical fashion. Critical technology levers are building resilience into the next generation of rail operations, from short line localization and autonomy at GWRR to capital growth and flexibility to rebound post-pandemic at KCS. Railroads today are building resiliency into the next generation of rail operations. And cloud-based, agile solutions are key to this story. Integrating functions under a single, scalable, secure platform is the best way forward to meet demand.

Jack gave a glimpse into how technology adoption applies at Genesee & Wyoming in terms of how the railroad is equipping its short line railroads. They are using technology to put higher quality information in the hands of their short lines, which increases the autonomy of discrete, local railroads. Technology adoption has also, not surprisingly, positively impacted commercial metrics such a cash flow and asset utilization.

Pat mentioned the help that CloudMoyo Crew Call in their technology journey. The deployment of the CCM-Mexico Crew Call solution was a validation of the value created through innovation at KCS and won KCS the CIO100 award in 2018. Deployment of Crew Call was followed by a global deployment of the CloudMoyo Crew Management (CCM) solution across KCS’s global operations in both the U.S. and Mexico. Indeed, ensuring that crew can work efficiently and securely across geographical locations is critical for cross-border transportation between the U.S. and Mexico, something KCS is no stranger to.

“We’ve had a lot of good success with [CloudMoyo],: said Pat, “particularly on a new crew calling technology that’s really worked well for us in the U.S. and Mexico. So, thank you for the recognition, Manish, and good work on what you have done to help KCS advance from a technology perspective.”

Putting technology and railroads together is something that CloudMoyo does every day. And to some extent, it’s technology adoption that positions railroads to continuously adapt to change with minimal disruption—using digital tools and processes to make real-time data available for analysis and informed decision-making. This prepares you for the what-if scenarios, the unforeseen fluctuations in demand for crew on the workforce side, or cars on the asset side.

“[Digitalization]…fundamentally starts first and foremost…making sure we have a secure and safe platform,” said Manish. Security that can be scaled and provided with a cloud-based platform…The areas that we can apply new innovation and velocity is how do you automate processes with the right amount of governance and the right amount of decision-making?”

To hear more insights from this years’ Rail Insights conference, check out more information about the event and access the on-demand recording here