Paradigm Shifts

Throughout my 2½ decades of independent consulting, including performing market studies and developing technology strategies for suppliers and railroads, I have had the opportunity to speak with a variety of senior railroad operation managers. During those discussions I would often ask the individual if his/her railroad ran to schedule. The response was consistently the same: “Yes, but … (some fatuous excuse, e.g., reducing crew starts given short trains)”. To some extent these responses can be seen as understandable given the data handling constraints of century-old operating technologies and associated practices as well as the evolving, inefficient silo-based IT architecture since the 1970’s. Additionally, there is little to no enterprise perspective of the consequences of one department’s action relative to other departments, e.g., excessive locomotives to cover shortages due to lack of actual schedule. However, the challenges to even approaching truly-scheduled operations are not just technical, functional, and organizational. Arguably, the most difficult challenge is that of modifying the management practices that have existed for decades. Therefore, advancing the efficiency and safety of U.S. freight railroads requires making shifts in both the technology paradigms as well as that of management.

Technology Paradigms
My article, Enterprise Perspective, in Railway Age’s April, 2017 issue addressed the paradigm shifts in the 4 core technologies that can greatly advance both the safety and the efficiency of railroads: 1) wireless voice to wireless data; 2) physical to virtual positioning; 3) mobile IT processing, e.g., locomotive borne, in addition to back-office; and the shift to an Enterprise IT Architecture (EITA) from conventional silo-based IT architecture. The example provided in the article as to advancing the first three technologies was the design of what I titled as Virtual CTC (VCTC) that my consultancy, Strategic Rail, LLC (SR) performed for the railroads of Egypt and Kazakhstan. Simply stated, by using virtual positioning, wireless data, and locomotive-borne IT processing, VCTC eliminates the extensive use of wayside infrastructure, e.g., track circuits, control points, and signals, and hence the avoidance of the substantial capital and maintenance expenditures. Additionally, VCTC can provide for both fixed and virtual block operation that can increase the throughput for a plethora railroads across the globe that unjustifiably have been financially and operationally held hostage to the fixed-block operation of conventional CTC.

While designing VCTC was an extraordinary experience for SR, deploying it would be even greater so, of course. Such is the case with 4Tel, an Australian supplier whose Managing Director, Derel Wust, presented its Virtual Block Traffic Control System at the Next Generation Train Control conference in Philadelphia on October 20, 2017. This system is deployed in revenue service on 1,400 miles of the NSW Country Regional Network railroad in Australia.

Mr. Wust’s presentation also included an Artificial Intelligence (AI) perspective for future operations that can eventually lead to the on-board platform driving the use of proactive resource management systems elsewhere, e.g., wayside, back-office, and mobile platforms. Such a perspective requires the 4th core technology, EITA, which eliminates the duplication in the generation, storage, processing, and distribution of critical data to optimize efficient and safe operations. The passenger airlines have demonstrated the value of EITA for truly scheduled operations for years.

Lastly, as to the 4 core technologies’ paradigm shifts, I quote Mr. Wust that the future of railroads is about Smart Trains & Dumb Tracks. As AI technology matures, this paradigm shift will see available dollars invested into AI-based, on-board locomotive systems and away from signaled track systems as a more effective way to move trains safely, economically and efficiently.

Management Paradigm
Until this past March I had little expectation that the conventional “crisis management” practices of Class Is would be challenged by any railroad to pursue actual scheduled operations. It was then that Hunter Harrison became the CEO of CSX to implement a major management paradigm shift to Precision Scheduled Railroad (PSR) based upon his past experiences at CN and CP. With out any detailed knowledge of PSR, but by using my perspective of truly-schedule operations that I have been promoting throughout my consulting career, I see 3 levels of truly-scheduled operations: 1) Internal; 2) Industry; and 3) Enterprise of which the first and possibly the third are being addressed by CSX.

Internally, I expect that CSX is attempting to optimize the schedule of its trains that stay within its own network. Those trains service the majority of its shippers, and hence arriving at a balance of increasing satisfactory customer service while decreasing dwell time and increasing average speed cannot be accomplished quickly. Arguably, to do so is more of an art than a science at this early stage of PSR. Additionally, there are major constraints to how effective PSR can be that are not within the control of CSX, as follows.

Industry-wise, the leading question is “How can a railroad run to schedule if the railroads with which it interconnects are not operating to schedule?” What would seem to be a very obvious observation, the point is rarely mentioned regarding scheduled operations in general, and PSR specifically. In fact, individuals from other railroads that are make disparaging comments about PSR, especially in its infancy, don’t realize that they are likely part of the problem given their lack of truly-scheduled operations. As to an industry perspective of truly-scheduled operations, the requirement for EITA is critical as well to ensure the efficient exchange of data as to what each railroad is doing relative to interchange. Actually, EITA and supporting technologies are relatively simple, but impossible to achieve until the primary railroads buy into truly-scheduled operations. This is an industry politics issue that perhaps could be best addressed, I believe, if all railroad top executives were paid bonuses based upon the efficiency of interchange.

From an enterprise perspective, running to schedule requires that the management of the primary operating resources are in sync with the actual train lineup, i.e., the schedules are in place for each primary asset, e.g., track time, locomotives, crews, yard tracks, and rolling stock. This means, for example, that there are no excessive pools of locomotives, and that crews are properly aligned with minimum deadheading. This also means that trains may run short based upon customer service performance. Granted, excess resources (referred to as “slack resources” in mathematical terms) are required when exceptions occur, e.g., derailments or weather. BUT, the slack resources required to handle exceptions in truly-scheduled operations are substantially less than those that are required for crisis management. To do so requires that management must consider the cost of excessive slack resources, e.g., locomotives @ $2.5 million each, excessive crew rest and deadheading, the cost of poor customer service, etc. These are costs that are not now being considered, I believe, by conventional railroad management, and thereby greatly affect the Operating Ratio of railroads. It is this point where a paradigm shift in rail management can really pay off, partially by delivering an EITA and the associated changes in the major resource management systems.

In closing, to effectively make the paradigm shifts in technologies and management require a unique discipline that is unlikely to be found in the U.S. freight railroads. I refer to strategic technologists as opposed to the current technicians that are not held accountable to the railroad’s bottom line for what they deploy. Strategic technologists are required to advance the railroad’s operating and market strategies in sync with a technology strategy. That syncing is not the case today for the Class Is individually, and certainly not as an industry.

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Given recent tech advances there is now an unprecedented opportunity to advance railroad operations and the integration of high speed rail with freight. Real-time traffic management and communication is possible without significant development and deployment costs, but it will take a technology strategy working hand-in-hand with an operational strategy, it will take Strategic Railroading.™
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