Rocky Mountain Trucking LLC

What if rail shippers could track not only the location of their rail cars but also the train that those rail cars are on and how that train performs on a certain line segment over time? 

That is the question industry consultant John Schmitter seeks to answer through the rail technology startup RailState, a Quincy, Massachusetts-headquartered data visibility provider. 

Shippers want to put more onto rail but “it isn’t just about comparing the rates from rail and truck. If you’re looking to make that shift in your supply chain, what’s the risk for me to do that? That risk is dependent on what kind of service am I likely to get [and] is there going to be enough capacity available,” Schmitter told FreightWaves. “There’s no independent data right now to make an assessment.”

Schmitter and co-founder and fellow industry veteran Jamie Heller started working on the creation of RailState in 2018 as a way to provide shippers with better visibility into not just where their rail cars are but also into the network of trains moving from place to place. Heller serves as the company’s CEO, and Schmitter is the company’s COO.

“On the rail system, you can track your own rail car. The system is not a black hole. People complain about it, but you can track your own rail car,” Schmitter said. “But look at what you have on all the other networks. You can go to any number of websites and find the location of any ship — anywhere in the ocean, anywhere in the world. You can do the same thing with every airplane. All this is real time. For the highways, you can go and look at any piece of highway and understand the volume congestion on any highway or any street.

“What do the railways in North America tell you about their system? You get system average train speeds and stuff like that that’s two weeks old.”

By providing the ability to see where trains are on the network, shippers can anticipate where there might be congestion or slower traffic as a result of weather incidents or other causes. Schmitter likened the platform to apps where drivers can see in real time where traffic is slower on area roads.

“The idea is, ultimately, you’ll be able to get a real-time shot, just like you have a Google Maps or Waze, as to what’s happening on different pieces of railroad, different segments. And this is all trains, not just your trains. This is the entire network, every train,” Schmitter said. “So if something’s happening, you’ll know it in advance. It gives people time to plan and modify and understand the priority that your shipments are getting versus others on any given railway.”

How the technology works

Schmitter describes the deployment of RailState’s technology as this: The company works with businesses and residences to place sensors 100 feet or more away from a railroad track’s right-of-way. The sensor takes images of the rail cars passing by and processes those images. From the images, the sensors are able to collect data about individual trains, such as what kind of rail cars they’re hauling and how many. 

For intermodal trains, the sensors are able to track how many containers there are, the size of the containers and the location of containers on the train. All that data is subsequently sent to the cloud, and RailState users are able to access that data about a train within an hour after it passes the sensor.

The sensors were also developed with an infrared illuminator so that they can catch trains at night and during weather events such as snowstorms. 

In December, RailState completed the deployment of its sensors along segments operated by Canadian railways CN (NYSE: CNI) and Canadian Pacific (NYSE: CP). 

The company plans to bring the technology to the U.S., starting this month at the ports of Los Angeles and Long Beach.

Canadian stakeholders familiar with RailState include coal producer Teck Resources (NYSE: TECK), which used the technology to move export-bound coal trains through the 2021 washouts in British Columbia, and Transport Canada. 

RailState recently announced that it has partnered with Boston-based SGS Maine Pointe, a supply chain consulting firm aimed at improving ROI for its clients, to provide SGS Maine Pointe clients with RailState data. 

“We see this digital experience becoming a solution to provide our clients a competitive advantage when shipping by rail,” said Nathanael Powrie, SGS Maine Pointe managing director of data analytics, in a Jan. 9 news release. “The team is very excited to work with RailState to develop a customized journey map on how this technology can help make better and more informed decisions for managing transportation.”

RailState’s formation comes as other companies are also seeking to improve network visibility for shippers and other stakeholders. 

The consortium RailPulse seeks to facilitate the adoption of GPS and other telematics technology in order to keep track of where rail cars are on the broader U.S. network and provide updates on rail cars’ status and condition. Those involved in RailPulse include Class I railroads Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC), short line and logistics operators Genesee & Wyoming and Watco and rail car lessors GATX (NYSE: GATX) and TrinityRail (NYSE: TRX), among others.

Watco and next-generation rail software provider Telegraph are also working on developing tools to improve rail car visibility for shippers. 

A bird’s-eye view of the rail network

The technology isn’t limited to tracking trains on the network and seeing if they’ve changed their speed because of a disruption or delay, Schmitter says. 

The technology also helps shippers see the volume of trains running through specific geographical areas and how that volume changes over time. It tracks how much traffic particular segments get, as well as the transit times for those segments and whether transit times for that segment are improving or getting worse over a certain period. 

“As you’re looking to invest in a plant or add a location, are you going to really have the rail capacity to be able to make all the shipments you want? There’s no independent data to say that,” Schmitter said. “You can talk to the railway, and what are they going to tell you: ‘Yeah, bring it on.’” 

But RailState’s program will let shippers see “how good is that segment doing, how many trains, what kind of trains they are, what kind of priority you’re going to get. You have none of that now. What our customers tell us is that it enables them to have more informed discussions with the railway because now everybody’s looking from the same page.” 

Indeed, providing shippers with options is RailState’s goal, Schmitter says.

“Some rail shippers invest hundreds of millions of dollars to create optionality” by creating access to multiple ports and rail lines, Schmitter said. “What you need to maximize the use of that optionality is data. Just being able to look at the location of your own shipments isn’t really enough.” 

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