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Railroads chug down the smart track

In an era increasingly dominated by streaming entertainment, connected devices and ubiquitous Wi-Fi, railroads might appear positively antiquated. But the industry that’s moved people and freight around the world for more than 180 years is embracing everything from social media to analytics to become more efficient, safer and easier to use.

“People tend to think of railroads as a smokestack industry,” says Keith Dierkx, IBM’s global industry leader for railroads. “But in fact, railroads have been a progenitor of many new innovations and technologies. I like to remind people that time zones first came about for the scheduling of trains.”

Keeping railroads up to date is critical. The U.S. has by far the largest freight rail system in the world with some 28,000 locomotives, more than 1.4 million rail cars and 140,000 miles of track. Each day American railroads deliver an average of 5 million tons of goods ranging from clothing to coal. That’s about 40 percent of freight shipped between cities. Only China and Russia come close to that volume.


What’s rolling on the rails (tons/year)

What’s rolling on the rails (tons/year). Consumer goods			12.8 million. Coal					6 million. Chemicals				2.4 million. Motor vehicles				1.7 million. Food and agricultural products		1.3 million. Paper and lumber			1.3 million. Source: Association of American Railroads

Consumer goods 12.8 million
Coal 6 million
Chemicals 2.4 million
Motor vehicles 1.7 million
Food and agricultural products 1.3 million
Paper and lumber 1.3 million
Source: Association of American Railroads


‘Where wheels meet steel’

That complexity demands persistent innovation. “It’s a very innovation-intensive industry,” says Dierkx, “where wheels meet steel.” Although new initiatives such as the Internet of Things are in the news, with many industries exploring further use of RFID, sensors, and now drones. In fact, he says, railroads have been using RFID (radio frequency identification) technology to track rail cars since 1991.

‘It’s a very innovation-intensive industry, where wheels meet steel.’ – Keith Dierkx

‘It’s a very innovation-intensive industry, where wheels meet steel.’ – Keith Dierkx

With so many cars and moving parts, freight railways would appear ripe to join the Internet of Things, embedding sensors to transmit data to central computers. But there’s a sticking point for freight railways in North America--there is no electric power on freight cars. Railroads therefore currently rely on sensors on or next to tracks to read important information on the location, health and safety of the rail cars.

These can – and do -- provide precise tracking. “Say I’m taking a container of goods out of a port in Los Angeles on a Tuesday afternoon and we’ve got a department store chain in Chicago that’s running a promotion in the local paper that red dresses are on sale that weekend. And we know that those red dresses are in a particular container, so we have the potential capability to give the store a fairly precise arrival time,” and ensure that the red dresses will be in the store and available to sell.


Listening for defects

But the sensors also improve safety and maintenance. “As a train passes by, sensors are able to pick up measurements such heat, acoustics signatures and wheel impact and know whether that rail car is traveling safely,” Dierkx says. In other words, the sensors can analyze the sound a train makes and determine, among other things, if a wheel or axle or bearing is operating within certain parameters or needs to be inspected. If it detects an abnormality, the system sounds an alarm. The next step, he says, is to use analytics to look at all the data from sensors. Then “you might see patterns emerge that would allow a safer railway because things could be maintained prior to failure,” and before normally scheduled maintenance. New initiatives such as Positive Train Control or PTC are coming this year. PTC provides the ability to virtually control the train – slowing or stopping it, for example, if it’s traveling too fast or needs to be stopped for safety reasons.

“Safety is the preeminent driver for the industry. Whenever you’re with a railroad in North America, every meeting is opened with a safety briefing covering things like where the exits are, who knows CPR, who will call 911.”

Technology also helps manage the people who work on the railroads, some 180,000 of them in the U.S. “There are very complex rules regarding staffing and compliance in the railroad industry,” says Dierkx. “We’re seeing more use of algorithms to figure out how to match the business demand with the assets and crews needed to populate trains. While these approaches optimize around business demand, more and more they’re also taking into account minimizing the personal impact to employee or crew member by giving them as much notice as possible.”


Passing the knowledge baton

Another issue facing railroads is the knowledge drain, as the current workforce ages out. “In North America, approximately 30 to 40 percent of the workforce is going to be retiring in the next five years,” Dierkx says. “Each of those people could have 30 to 40 years of rail knowledge that you wouldn’t want to leave the organization. The challenge is how can you capture that experience and make it available to newer employees.” The answer is to employ mobile and other technology. “Newer employees are used to these tools; there’s a high degree of comfort. So we’re starting to see much more of a blend between the experiential and the data-driven organization.”

Passenger rail in the U.S. is dwarfed by the country’s freight operations and is relatively less significant than in much of the rest of the world. According to the World Bank, U.S. passenger traffic is about 9.5 billion passenger-kilometers (a unit of measure for transportation) per year. On the other hand, Japan, which is about the size of California and has a population about 60 percent smaller than the U.S., sees 244.5 billion passenger-kilometers.

World’s top freight haulers (in million ton-kilometers)
World’s top freight haulers (in million ton-kilometers)


30 million CEOs

Passenger lines face other challenges. While a freight customer just wants her goods to be delivered in satisfactory time and condition, rail passengers can be more demanding and vocal. “One rail CEO said to me, there are 30 million rail CEOs on his trains every day. And by that he meant that everyone taking his train was blogging, tweeting, posting on Facebook, Twitter and other social media. So we’re starting to see a lot more conversations taking place between railroads and passengers,” Dierkx says. “Some are to create loyalty, but sometimes passengers can make you aware of things that need improvement to enhance the customer journey.”

And sometimes such conversations, usually electronic, can drive incremental business and improve customer satisfaction. Increasingly, passenger railroads are building systems that let travelers use mobile devices to buy tickets, choose seats and change their plans. But that’s just the beginning, according to Dierkx. Location awareness, which is the ability of a Wi-Fi network in a train station to recognize who you are through your mobile device, will enable a host of new services such as suggesting places to rent a car or book a hotel room at your destination.

“We’re seeing a lot more today of what I would call personalization and relevance,” he says. “If I’m on a business trip, the types of things I’d be interested in would be very different than if I was traveling with my wife and two daughters, for example.” Location awareness could differentiate those by noting that there were four tickets booked to the same last name.

“It can use information to provide insight and context around my journey and use that information to enable a seamless, frictionless trip. If there’s a train delay due to weather, the system could use the information to rebook me, let the hotel know I’m going to be late, and so on. It’s really staying connected throughout the end-to-end journey.”

All of this depends, of course, on passengers “opting in” to the system. Some people will not, citing privacy concerns.

“And all this is just the beginning. In fact we’re starting to see some interesting ideas. What if you were to use the ability get business insight from social business and unstructured data like press releases or announcements, Tweets. There’s a new business opportunity emerging. I could use this insight capability from data and analytics--and even some of the cognitive computing ability that IBM is developing--to start identifying new opportunities in the marketplace. For example, one of my big customers might be building a new plant that would require specialized rail cars, and being attuned to that, being able to get in front of that, would give me a competitive advantage.”

Learn more

Watch a video about smarter railroads (Youtube, 00:02:56)


Expert on this topic

Keith Dierkx