The new digitalization mindset: Recaps from Rail Insights Canada

The network is a valuable thing. It cannot be replicated at all.

Three-quarters of the way into a roller-coaster ride of a year, the leadership gathered online at Rail Insights Canada agreed on this reality. The last 9 months have revealed the need to reflect on the role that North American railroads play in the global supply chain. On the imperative of network velocity, revenue velocity, and putting the needs of the customer first.

Navigating COVID with grace, aplomb, and spirit

The global pandemic had a very real, local impact. It brought forth a new reality, a new mindset emerging. There is an activated asks from all functions in the railroad for automation and innovation. What’s becoming clear is that there is no way out without charging ahead.

The industry has not relaxed in its drive to stay safe and deliver to customers, community, and Canada and the U.S. Emerging from the crisis, railroads like Canadian Pacific (CP) are seeing themselves as stronger than ever. Communities have a deeper appreciation of the economic value of transit, says Metrolinx. They have focused on what they can control, and are turning huge challenges into even larger opportunities.

A more customer-centric approach

As the metaphorical smoke of COVID-19 clears, what crystalizes in front of us is the presence of a more customer-centric approach in the industry. The supply chain, perhaps spurred on by the arrival of e-commerce and the Ammonization of transportation has made the imperative clear for a reliable, efficient, transparent, and customer-centric supply chain. There is a revolution in how people think about commuting, shopping online, about transportation cargo and delivering supplies cross-nation with increased carloads.

It was without saying that this applies to passenger rail, as well. Metrolinx President & CEO Phil Verster pointed this out while commenting on the reality that the agency has kept close to the customer experience and preferences through initiatives like community engagement workshops. The agency is looking for changes in commuting patterns, ridership, and capacity, with safety taking on a whole new meaning in the age of COVID.

As the saying goes, change is a’ coming, and railroads must remain ultra-committed to deepening trust with the customer, constant improvement, and learning from what you didn’t get right the first time.

The elephant in the room: Trucking

Of course, the way ahead is no easy road. COVID-19 aside, the rail sector wakes every morning to constant competition from trucking, the other main source of transportation cross-country. But leadership from Canadian National (CN) and more expressed confidence at the rail industry’s positioning, given its eco-friendly, smaller carbon footprint, offering an ethical, more fuel-efficient product. Short lines, reminded Ontario Northland President & CEO, Corina Moore, are a much more cost-effective alternative to shipping goods across the country, or to connect isolated communities with goods and services.

This advantage aside, railroads are driven to enhance the customer experience. In a new era of e-commerce and digital commerce, railroads must get their fair share of traffic. So, how to bring that about? What are the drivers, the levers to competitively position themselves as the best partner in the supply chain?

The way ahead: Technology adoption

If there ever was a one-word answer to the question above, it would be this: Technology. Of course, that’s a simple phrase to describe a movement, a new reality and an emerging mindset in innovative railroads like Canadian National (CN).

CN’s innovation story: Strategic technology focus

Back in June 2019, CN released a 3-year, strategic agenda focused on growth and technology. The agenda would focus on driving long-term value for shareholders and customers. “Having pioneered Scheduled Railroading roughly 15 years ago,” said CN President & CEO JJ Ruest, “our vision is to be the first railroad to take it to the next level by deploying advanced information technologies.”

Fast-forward to October 2020, and CN has not only seen success in its PSR processes (automating at much as possible in areas like autonomous train and track inspections, and dispatching), but it is looking to further expand this focus into what Ruest called “DSR: Digitalized Scheduled Railroading.” This approach not only takes the angle of PSR methodology but actually digitalizes PSR processes within a new chapter in this railroad’s continuous strategy.

The industry is just at its infancy in what can be done with technology, commented Ruest, and the biggest impediment to gaining momentum is implementing a technology-focused mindset. At CN, they are all believers deeply committed to digitalizing railroad processes, and this is making all the difference.

Short lines standing tall: Ontario Northland’s approach

As President & CEO Corina Moore said, it doesn’t matter what size you are, you can be a leader in technology in the industry.

The conviction echoed Ontario Northern’s journey that began back in 2014, the year it started a transformative renewal of people, processes, and technology. Six years and thousands of improvements later, the railroad has embraced a culture of continuous improvement.  It has looked at every level of improvement in the organization, buoyed by its mission to connect people seamlessly to major centers.

Ontario Northern was the first railroad to offer e-ticketing for its passenger rail and motorcoach services and has collaborated with NRC to invest in trial technology, sharing results with the industry. Short lines may not have large tech departments, said Corina, but they do have the ability to expand technology efforts, learn from what other railroads are doing, and reach out to technology partners.

Moving the needle: Technology adoption at CP

CP President & CEO Keith Creel has been at the railroad since 2013. In that time, he’s been recognized for his leadership and was named as Progressive Railroading’s “Railroad Innovator” in 2014. Innovation is not a new word for CP. Creel shared how the railroad has been quiet, humble, and focused on maintaining a leading-edge and driving action on the technology front for some time.

Not surprisingly, this has been accelerated by the pandemic. Years of hard work gained speed to where the railroad is now leveraging predictive analytics to take preventive measures, manage car and loco fleets more efficiently, use wayside equipment to evaluate wheel brakes as they go downgrades, and raise the performance bar. CP is committed to continuous improvement, said Creel, and the next step is centralized traffic control (CTC).

Technology partners: Ever the enablers, doers

The pandemic and acceleration of technology innovation is not the end of the story. CloudMoyo Co-Founder & CEO Manish Kedia shared how railroads need to be looking beyond the next 10 to 15 years to leverage the rail network to provide the next level of service to customers.

The ingredients to making that happen include end-to-end digitalization of core systems and processes, that move towards Digitalized Scheduled Railroading (DSR) that JJ Ruest mentioned. What this sort of enterprise-wide digitalization strategy looks like:

• Innovation must be done at scale
• Self-learning needs to be applied
• Create a self-close loop where automation and AI happen in real-time
• End-to-end automation to get more out of enterprise systems like ERP and CRM
• Give the workforce an immersive UI experience

The imperative? Think from the inside-out. Railroads cannot and will not stay with the status quo.