Precision Scheduled Railroading and Your Operating Plan (Part 2)

Biarri Rail Colour LogoMarch 8, 2019 – In our last post, I stated that you can’t effectively operate a Precision Scheduled Railroad without an integrated operating plan. All major railroads have an operating plan, but I contend that you need to re-think your planning process if you are embracing PSR.

For most railroads, starting a PSR implementation means building a clean-slate, or zero-based, plan that must start with the analysis of customer demand. Remember that a core tenet of PSR is car velocity, and a plan that is focused on moving the cars (and reducing dwell) will necessarily be built on the demand, or traffic.

I can’t explain the complex steps of an integrated development of a new operating plan in a brief article. Experts spend decades refining their understanding of building operating plans. But, it’s worthwhile to review a summary of the key components:

  1. Customer demand – Demand is at the core of precision scheduled railroading, since block and train design must be based on the projected traffic movement across the rail network. Railroads need to process and analyze their traffic records and waybill files to prepare an historical or projected set of data that can be used for developing blocks and trains. This is frequently the most difficult stage. You can’t run a scheduled railroad without knowing your demand.
  2. Blocking – Most large freight railroads have computer-based blocking tables or algorithms, to help them allocate the projected freight to appropriate blocks. However, many of these same railroads are deficient on tools to help them optimize the creation of blocks that will reduce handling and ton-miles, and improve car velocity. Block design is critical.
  3. Trains – Train schedules should never be developed until the traffic and blocking are well understood and modeled. As with blocks, most of the large NA freight railroads have many software-based tools for designing trains, but there are few deployed solutions for optimizing the block to train assignments. Once again, the key metrics are reduced handlings and ton-miles, using train constraints such as train capacity, power, crewing, and yard and network capacity.
  4. Shared Data – The operating plan uses a set of shared data, of which the most important is the rail network. The network not only includes the characteristics of the route (lat/long, distances, speeds), but it can also contain key variables such as traffic restrictions, physical track characteristics (grade, curvature, etc.), yard capacities, and locomotive HP requirements (load tables).

It is important that all aspects of the operating plan are developed as an integrated whole. A freight rail operating plan is a network problem and you can’t solve for a portion of the network, or for a class of traffic, without impacting the balance of the operating plan. The best way to accomplish this is to develop your plan with an integrated set of automated planning and optimization tools. With these types of tools, it’s also essential to have robust data integration to and from the railroad operational systems.

Asset planning and optimization are also needed to fine tune the operating plan. Locomotive optimization can be used to determine how a fleet of locomotives will be deployed to power trains in a train schedule, balance locomotives, and meet other locomotive demands, such as light engine moves and yard switching. Optimization techniques should also be applied to the other assets such as train paths, car fleets and crew schedules.

Lastly, it is important that the railroad has tools to make incremental changes to the new plan and to develop relative costing for plan scenarios. Quick analysis of planning scenarios can be evaluated using factors such as trip plans, ton miles and handlings, but the ability to examine multiple cost factors (crew, fuel, yard, etc.) with each plan iteration is invaluable.

Precision Scheduled Railroading and Your Operating Plan (Part 1)

freight rail yardFebruary 22, 2019 – Precision scheduled railroading, or PSR, is the most-discussed strategy in North American freight railroading today. The concept of scheduled railroading (versus tonnage railroading) has been around for some time, but the specifics of PSR have come into focus due to the vision of the late E. Hunter Harrison. As the CEO of first Canadian National, and subsequently Canadian Pacific and CSX, Harrison restructured these railroads based on his PSR operating strategy.

While controversial, mostly due to some negative impacts on customer delivery and service reductions, all three of the railroads saw significant improvements in their operating ratios and stock prices. In the last 18 months, most of the other class I railroads have committed themselves to developing operating plans that put PSR at the core of the operation.

Much of the talk about PSR assumes that we know what it is. To make a complex concept simple, I suggest that precision scheduled railroading can be described in four bullet points:

  • Trains are operated according to their schedule and not held in yards to add more cars.
  • Car velocity is more important than train velocity; origin to destination car trips take precedent over train performance.
  • A railroad should run more manifest trains, mixing merchandise, auto, intermodal and other classifications on the same trains; reduce the number of unscheduled unit trains.
  • Maximize asset utilization, including network, locos, cars and crews.

To put the idea into a single sentence, PSR seeks to provide customers a more reliable, predictable and cost-effective shipping experience by creating train operating plans that seek to speed cars through the network, with the most efficient use of assets.

Not all aspects of PSR are without controversy. There are shipper and regulatory concerns that in their efforts to reduce assets, the railroads will apply too little to capital spending. Other concerns relate to quality of customer service and responsiveness to shippers. I also see a disconnect between the elimination of hump yards and the focus on car velocity. If an operating plan is properly designed (with a reduction of car handling in mind), hump yards are not, in themselves, an impediment to the goal of dwell reduction. Yard operation to a better plan is needed.

But my core message to you is – You can’t adhere to a PSR operation without an appropriately designed operating plan. Sometimes called a train plan, the PSR operating plan must be designed from the ground up, and as an integrated plan.

In our next post, we will discuss the key elements of an operating plan, the types of tools needed for your Service Design group, and how this approach can lead you towards a well-planned PSR operation.

Boss Locomotive Planner Deployed at Kansas City Southern (KCS)

Biarri Rail Colour LogoBiarri Rail has announced that The Kansas City Southern Railway Company (KCS) has completed the implementation of its Boss Locomotive Planner, and begun the production use of the system for its US and Mexican operations.

At the start of the project, KCS asked Biarri to deliver a cloud-based system that would improve the utilization of, and lower costs for, their more than 1,000 locomotives. Additionally, KCS wanted to establish a measurable basis for new locomotive purchases and to determine optimal fleet distribution. The Boss Loco Planner is now in place to support these goals.

Brian Hancock, EVP and Chief Innovation Officer, expressed his support of the Boss Locomotive Optimizer in stating “We are pleased to have significantly enhanced our locomotive planning capability and now be able to set consist allocations and changes at a detailed segment-by-segment level, to ensure results can be operationally validated.”

The system is also being used by KCS to provide transparency to terminal inventories and to support powering strategies on the USA-Mexico border. In using the new Boss Loco tool, KCS has the added benefit of being able to model and analyse PTC deployment at the border. With this sort of analysis, the PTC-enabled locos can be accurately phased in for the appropriate network segments and cross-border trains.

Tom Forbes, the CEO of Biarri Rail, said “Our working relationship with KCS has been excellent as we have had Biarri Development and Product Managers on the ground for each phase of the project. In fact, KCS contracted with us to extend the tool set with further automation of train data imports and custom upgrades to the user interface.”  The Boss Loco upgrades for KCS are to be deployed in the first quarter of 2019.

Following up on the successful roll-out of the Boss Loco Planning and after hearing from multiple Class 1 railroads, Biarri is also developing Boss Loco Ops. The Loco Ops module will provide dynamic support for the allocation and dispatch of locomotives at the unit level. This Boss tactical tool will also give locomotive dispatchers situational awareness of their locomotive fleet and provide decision support so that they can make informed and efficient locomotive assignment decisions. More information on Boss Loco Ops will be available in the first quarter of 2019.

RailTrends 2018 Conference in New York City

New York City, United States – January, 2019 – Biarri Rail was thrilled to be a first-time sponsor for the annual RailTrends Conference at the Marriott Marquis on November 29-30 in New York City. RailTrends is considered by many to be the premier industry event, where most of the Class Is are represented by one or more members of their senior management team. Speakers this year included Lance Fritz, CEO of the Union Pacific, James Foote, CEO of CSX, and Brian Hancock, EVP & Chief Marketing Officer for Kansas City Southern. The conference also honored Ed Hamburger, the retiring President and CEO of the Association of American Railroads (AAR).

Biarri opted to be a sponsor for RailTrends 2018, as we recognize that the North American freight rail industry is at the cusp of a new period of intense technological development. We believe that the industry is currently inclined to reduce capital costs, but simultaneously having to deal with the approaching challenges of precision scheduled railroading (PSR) and the introduction of autonomous vehicles on roadways and rails. There is really only one way to bridge this funding gap, and that is through smart technology investment and efficient industry adoption. The presentations, and buzz among the conference attendees, supported this belief.

Presentations were given by all of the Class Is (except BNSF) as well as by shorts lines, Amtrak, Oliver Wyman, and Ann D. Begeman, Chairman, Surface Transportation Board. Tony Hatch, one of the co-founders of RailTrends and CEO of ABH consulting, also gave a presentation on Rail versus truck and wrote an excellent re-cap and analysis of the conference on December 19th in Progressive Railroading. In his piece he summarized the stated challenges of precision scheduled railroading (PSR) implementation, technology adoption by the railroads, and the evolving regulatory climate’s impact on rail planning and operations.

One of the five takeaways Tony highlighted in the article was the presentation by Brian Hancock of KCS and the leadership being taken by them on the technology front. “Kansas City Southern may have jumped to the top of the leader board in terms of technology and innovation, and officials promised that their railway will be fully automated in six to 10 years!”

As a technology partner for KCS, and as a part of the development of their technology roadmap, Biarri Rail could not agree more.

 

Dynamic Scheduling with Local vs Holistic Planning

Many businesses operate in uncertain environments, at the mercy of breakdowns, human error, traffic or the weather. The traditional approach is to build slack into a schedule, to survive some expected level of uncertainty, and then to hope this schedule can be executed in spite of whatever unforeseen events actually occur. In instances where the schedule cannot be implemented as expected, operational decisions are made to try to meet the business goals as much as possible. Under complexity and time pressure, decision makers must often resort to making short term, locally focused decisions without the time or tools to consider implications downstream.

In this blog post, optimisation consultant Dave Scerri describes how recent algorithmic advances and smart tools have enabled the best of both worlds: an operational scheduling approach that responds to changing circumstances while focusing on system wide efficiency.

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