How digital rail revenue management can accelerate revenue recognition with enhanced compliance
Digital transformations are sweeping across the railroad industry. As railways work to stay ahead of the disruption cycle, they look for ways to integrate digital solutions that can automate operational processes. Rail industry regulators such as the Federal Railroad Administration (FRA) are catching on, with talk of an amendment being made to Rule-2 making the rounds of the industry. This amendment would require railroads participating in ISS to be REN certified.
Challenges in traditional revenue management for short lines
Revenue management is critical for any company, railroad or not. Revenue inflows keep a railroad healthy and running, boost their ability to adapt digital innovations in the industry and remain competitive in their market.
- Aging systems: But for short lines, revenue management has been characterized by aging systems, poor visibility, and manual processes that don’t provide automation, integration and compliance needed to drive operational efficiencies. Short lines are using manual, non-standardized processes in line haul, equipment, extra-service, and accessorial rating that end up limiting the automation capabilities of the rating engine. Without automation in a key management process, your short line stands to lose both time and money.
- Manual processes: What you want to look for in your revenue management system is paperless exchange of pricing data as well as paperless billing. This can help you avoid manual human errors and expediate the billing process.
- Costly infra: Cost is always going to be a major concern for many short line railroads, who do not always possess the amount of funding for infrastructural investment that Class I railroads do. Both implementation and maintenance support for this kind of digital integration is a concern.
- Poor data: Another roadblock for short lines is inadequate data management on the part of short line railroads. Manual data records, system silos, and a lack of integration leads to a lack of transparency across systems, and a loss of time associated with manual processing, from accessing rates to invoicing.
Once short lines are able to access these rates through an electronic network, they’ll be able to generate a price quote based on the price repository, as well as other specifications like discounts. They’ll also be able to access a currency exchange rating engine with the latest exchange prices.
Benefits of a digital revenue management system for short lines
- Automation of manual processes
Instead of struggling with manual, non-standardized processes, short lines can harness the power of a digital revenue management system to automate the rating process. As a result, you’ll save time and enhance accuracy, avoiding the mistakes or errors that can occur within a manual process. Another benefit is a shortened revenue lifecycle as you streamline the rating process digitally.
- Easy creation of pricing dockets
A digital revenue management solution for short lines can offers a data repository that contains a pricing docket. This docket would contain a robust pricing repository that enables price change management. You’ll be able to adjust price of rates and also group and classify price information based on business units, industry, the type of commodity, miles, lease, services, haulage, and trackage to create a unique quote and rate for the Class I railroad you are working with.
- Interface with other systems to accelerate revenue recognition
A key aspect of an automated rating process is the ability to interface with other systems that can bring in data that you’ll need to determine rates. The automated rating engine interfaces with pricing dockets, waybill, and other business systems to automate this process. Choosing a revenue management system that offers this interface capability is key in order for the solution to work successful with existing systems in your railroad.
Along with the rating engine, a digital revenue management system offers a rate database that stores current and historic rates. These rates will support revenue prediction for your railroad, helping to drive profitable decision making.
- Enhanced compliance with industry requirements (REN)
The Rate EDI Network (REN) requires North American carriers participating in ISS to define and publish information about rates for movement of commodities on rail freight tracks. Traditionally, all of this has occurred through the REN web interface, which is simple and less costly for short lines. However, proposals have been made to add an amendment to Rule-2 of the Railway Accounting Rules, which would require railroads using the RailInc REN network to become REN certified—replacing the REN web interface with REN EDI, electronic network. The amendment poses a challenge for short lines (especially smaller short lines), many of whom don’t have the funding, expertise or manpower to become REN EDI certified. As a result, they will have to rely on larger, Class I railroads to meet this requirement, exposing their data to these Class I—not the most attractive option.
A digital revenue management solution can empower short lines to interface with REN via automated handling of EDI 460, 463,490 allowing short lines to be totally self-sufficient to handle interline settlements with no dependence on others.
The CloudMoyo Revenue Management System (RMS)
Fueled by our vision to digitally transform the foundation of transportation and our mission to be the railroad digital transformation platform globally, CloudMoyo created the Revenue Management System (RMS) to meet the unique revenue management needs of railroads, from short lines to Class I and regional railways. Our goal is to help railroads reimagine their digitalization process and be their partner in implementing modern solutions across a railroad enterprise—ensuring enhanced compliance with industry standards and streamlining the rating process.
RMS helps railroads like short lines to manage revenue recognition and financial recognition, automating rating and billing processes and empowering you to ensure compliance with industry regulations. To do so, RMS interfaces with external partners like RailInc to retrieve master data, A/R invoicing, and financial reporting.
Sounds interesting? Request a demo with one of our rail experts today who can explore the benefits of RMS for your railroad.