The world is calling upon its rail freight carriers like never before. In 2021, the U.S. experienced a nearly 25% higher rail volume than the previous year. That figure includes rail car units and intermodal support units. Globally, the rail freight market is expected to grow at a rate of 4.3% per year until at least 2026.
This rise in demand doesn’t come without growing pains, however. This is a look at the top intermodal shipping challenges companies today must overcome.
Time-Consuming Manual Updates
Rail systems often require carriers to update their estimated times of arrival (ETAs) when they encounter disruptions. Given the number and types of disturbances these days, ETAs are hard to determine and frequently change. Determining and updating ETAs are tasks that historically relied on manual intervention.
Rail companies need to know inaccurate ETAs won’t hurt their business in a time of rising demand and updating such data won’t slow them down. Consider the number of steps involved in the typical intermodal shipping process, from loading and unloading cars or trucks, traveling to a seaport or rail yard, and transferring the contents to the next staging area or vehicle.
Disruptions or setbacks can occur during any of these steps. Companies must be able to trust that detecting and responding to them and issuing updates won’t be a burdensome process.
Overcoming this challenge could be as simple as adopting a real-time visibility platform for a transportation system. Instead of spinning one’s wheels contacting railroads and carriers, organizations can spend more time on value-adding activities.
A Lack of Meaningful Data
A significant reason why ETAs are challenging to nail down is freight carriers and customers frequently don’t have meaningful data at their fingertips. With strategic technology investments, however, rail companies can capture as much or as little data as they require to fine-tune operations, trim waste, deliver timely and relevant alerts, and uphold higher quality levels.
Here are the broad strokes of how modern technology platforms can enhance data gathering for rail freight companies:
- Reduced defect rates and product loss: Sensors provide condition monitoring capabilities for perishable and time-sensitive shipments.
- Faster and more accurate quality control (QC): Computer vision and machine learning speed up inspections of shipments and surface data useful for QC, customs processing and ongoing analysis.
- Resilience, adaptability and safety: IoT-based data gathering and cloud communication tools improve collaboration and data sharing, in addition to warning of safety issues or operational red flags.
To put the opportunities in concrete terms, consider this: Around 80% of railroad issues that result in derailment can trace back to vertical displacement of the tracks. This loss of time, material and public trust can be a thing of the past with the IoT and other strategic investments. Both rail infrastructure and the cars traveling on it can deploy IoT technology that studies the vibrations, sounds and movements of cars as they travel.
Any of these variables could signal components shifting or wearing out and threatening a derailment. Now, this data can be captured, identified and distributed to the appropriate personnel for timely intervention.
Tracking Empty Rail Cars
A small but persistent intermodal shipping challenge among rail freight operators and adjacent industries is the lack of tracking for empty rail cars and trucks. This is a crucial hurdle to overcome because—given labor shortages, climate impacts, geopolitical turmoil and other disruptions—there’s often a lack of available rail car space to meet current needs.
Rail cars are a limited resource for many shippers, so knowing which ones are empty, where they are and when they’ll be available is a huge advantage. Vehicles laden with freight may have tracking hardware and software aboard, but empty trucks and rail cars have historically been a different matter. There’s a major opportunity throughout trucking and rail freight to adopt fleet management software that tracks free vehicles with as much detail as laden ones.
Expanding Digital Threat Surfaces
The technologies listed above represent significant opportunities for rail freight companies, but they also bring challenges. This is why the U.S. Transportation Security Administration (TSA) has spent the last several years revising its cybersecurity guidelines and directives. Doing so has created new challenges for operators in the industry and brought interest in vulnerability management tools into the mainstream.
Among the newly outlined expectations are requirements to:
- Apply security patches to digital infrastructure using a risk-based analysis.
- Deploy monitoring and automated detection tools to identify cyber threats more quickly.
- Use a network segmentation policy to separate operational data from sensitive data, like finances or personally identifying information.
- Design and continually update a cybersecurity risk-assessment program to ensure ongoing improvements and speedy detection of new vulnerabilities.
These are not hypothetical risks, either. In November 2022, a ransomware attack on a Danish railway operator halted its entire rail system. Rail freight is not a new technology, but it’s a critical part of any nation. These facts have made it appealing to criminals and placed it alongside banks and public infrastructure as top cybercrime targets.
Labor Disputes
In early December 2022, President Biden signed into law a bill that averted a strike and shutdown of the nation’s rail systems. Labor unions had previously asked Congress to intervene by requiring paid sick days and other commonplace worker protection measures. By failing to answer this call, Congress forced a resolution that could bring greater harm in the long run.
Companies that don’t wish to leave their fortunes in the hands of legislative bodies must hear their workers’ grievances and work in good faith to answer them before a shutdown looms. If the industry fears for its profits but won’t take a leadership position on paid sick leave—in the era of global pandemics, no less—then they should hardly be surprised when unions court the government to make their needs heard.
Various presidential administrations have led by example by improving the social contract for federal contractors. American rail isn’t nationalized, so that designation doesn’t cover the typical rail worker. However, the behavior of the current congress and administration proves that rail workers are essential.
This is also a reminder that private companies don’t have to—and shouldn’t—wait for a presidential administration to set the example. Rail freight companies and other essential employers should raise the bar higher on their own rather than waiting for governments to force their hands or force their employees back to work.
Understanding and Responding to Intermodal Shipping Challenges
Recent events make it difficult to discuss rail freight without folding politics into the mix. If there’s a bottom line for the B2B community and supply chain and procurement professionals, it’s this—use technology to keep an ear to the ground and don’t wait for somebody else to reframe the conversation. Rail freight workers are discovering how valuable they are. At the same time, freight companies realize how long it’s been since their social contract and some of their technologies have been updated.
Overcoming these intermodal shipping challenges requires understanding the organization’s unique risk profile, an industry-leading mix of capable technologies and a conscientious, resilient, humanistic culture.
