Hidden in the bad press about oil prices is a little-known fact: Rail freight is the hottest sector in the transportation industry. And one of the reasons it is so hot, $3.50 per-gallon gas prices notwithstanding, is that just-in-time manufacturing is pushing the railroads and shipping companies to pick up the slack for trucking -- which is suffering from a lack of drivers and serious fuel economy problems.
What's ironic about this upsurge, considering the high-tech nature of the rest of the supply chain, is that railroads are notoriously under-automated. There is literally no easy way to accurately track a freight car, not to mention its contents, across the entire 200,000 miles of track in the U.S. And there is no definitive way to know, without getting dangerously close, whether the tanker that just derailed is carrying mineral water or highly toxic chlorine gas. In many ways this is an industry that's rolling blind. And it's not just the railroads that don't have a clue.
It turns out that manufacturers themselves are also left in the dark, despite the double stake they have in creating a more enlightened view of their logistics chain. Not only do they need to keep their plants running lean and mean, but they own a significant number of the 1.6 million railcars that move their supplies and finished goods from plant to plant. At a maintenance cost of $10,000 per car, per year, this double trouble, or double opportunity, has a lot of dollar signs associated with it.
What's at risk is pretty significant. Imagine a dozen railcars full of windshields racing to your just-in-time assembly plant and hitting a bad patch of track. A few high-impact bumps and your windshields are now ready for the glass recycling plant, a fact that won't be apparent until they arrive at their destination. At which point it's time to shut down the factory and start calling your air freight logistics provider and your banker, who's going to advance you the money you need to get the parts on time.
The state of the art in rail-freight tracking today doesn't really help mitigate this risk. There are RFID solutions that allow a logistics company to know where an individual rail car is, as long as it's passing within range of a static transmitter. But there has been no way to gather any data, much less in real time, about the status of the railcar or its contents. And, therefore, no way to know whether you're going to be unpacking something you can use or something you'll need to send packing.
Until now. RFTrax, a subsidiary of Fairfield Industries, is bringing to market a solution that combines sensors mounted on railcars, GPS systems, real-time transmissions, and links to ERP software that can fill this massive information gap. RFTrax sensors can tell a logistics company or manufacturer not only where a railcar is, but when it was opened, if it is leaking, how many g-forces it encountered along the way, and a host of other issues that can transform a massive black hole into a data-rich, problem-solving environment.
This is only the beginning of an information revolution that is heading for the railroad industry in the coming years. These under-automated parts of the logistics chain can no longer afford to be the weak links in what is becoming a crucial element in every manufacturer's operations.