From Rail Tracks to Rail Car Tracking: Managing Moving Parts as the Digital Transformation of the Rail Industry Accelerates

May 7, 2020

The physical ecosystem associated with the massive rail industry in the U.S. is legendary, and complicated. The world’s largest banks including PNC Financial, CIT Group, Wells Fargo and Citigroup own and lease hundreds of thousands of railcars that transport commodities through North America.

Large rail operators are trying to use fewer trains to save money, and nearly 400,000 railcars are in storage, according to the Association of American Railroads (AAR), so the dynamics of supply and demand – and the supply chain itself – are being reimagined.

For the lessors, they are sitting on assets diminishing in value unless they can find ways to improve market dynamics. For the rail companies or their customer who lease railcars, they are adapting and optimizing a “buyer’s market” even as the demand for commodities (like coal) itself changes.

While rail operators are in charge of moving the cars from point A to point B, banks often cover the cost of maintenance, which further complicates the problem for the “true owners” but with innovation, it is possible to rebalance the rail industry using Industrial IoT solutions.

Many rail cars have a life span of 50 years, and as safety and environmental regulations become even more fierce, fines are another financial risk owners and operators may share. Regardless of who owns what, the ability to optimize inventory, improve predictive maintenance, and generally create a more efficient physical supply chain becomes a reality when digital supply chain techniques are applied by adding sensors to cars that can track everything from location to mileage to temperature and humidity conditions to overall profitability.

What are some of the biggest challenges an IoT platform can help address?

  1. Cars sitting idle, lost, not returned and therefore not monetized
  2. Cars where lack of repairs on a timely maintenance schedule end up with flat wheels, hot bearings and other issues removing them from use
  3. Stolen cars or stolen goods from cars that go undetected until it is too late
  4. Slow response time when cars are required
  5. Imbalance of inventories throughout the system

With affordable, reliable and open technology-based rail car tracking, monitoring and management, real time visibility becomes an asset for all those who are part of physical ecosystem, enhanced with digitally generated visibility into where each rail car is, its condition, its ownership, its maintenance schedule, its history and more depending on the use case.

With the right solution, even the most distributed range of cars can be known, and data can be securely shared among the various parties, making the process of optimization for all much easier, more accurate and more profitable.

With a scalable IoT platform, rail cars become billable assets rather than liabilities in an idle state that can be nearly impossible to manage across fifty states.

For operators, maintaining a lean fleet can be challenge, especially if you must balance it across multiple locations and products, whether they lease or own cars. Logistics departments in the rail industry are not always dealing with reliable demand forecasts, and poorly planned car maintenance can add a lot of downtime.

In response to these challenges, there are two choices: carry the load of too many cars, to provide a cushion, or instrument the cars you do have leading to more agility and ability to serve customers, when planning shipments and tracking them in process. Being able to orchestrate between locations, to ensure cars are made available at the “B” end means more revenue per car on a more predictable basis.

More data means easier audits, stronger compliance, less expensive maintenance when repair charges are minimized through proper scheduling.

Accurate data “by the car” improves everything along the supply chain, from logistics and planning to sales, customer service, purchasing, billing, operations and governance.

Like every industry, the rail industry continues to evolve, and it is the combination of quality management of physical assets leverage digital solutions that will define a successful future for rail companies in the U.S. and globally.

To learn more about our asset tracking, monitoring and management IIoT solutions, please visit

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