Shipping by rail is complex and complicated by the ongoing freight capacity issues surrounding COVID, manufacturing changes, and labour challenges. In today's freight climate, customers have been accustomed to an Amazon-like experience in their personal lives; and they expect a similar delivery process when purchasing goods delivered by freight in their business life.
What metrics should rail logistics professionals track to ensure smooth deliveries, and how can they best track these metrics?
Railroad Operating Metrics
Class 1 Railroads must submit specific operating metrics to the Surface Transportation Board (STB) every week. These operating metrics are the foundation for how railroads calculate their performance. This data is also reported to the railroad's customers and Wall Street, although some railroads use a different methodology for reporting metrics to investors.
The following metrics are available through the STB website, and most of these are also available through railroad web-pages for investors.
- Train Speed
- Yard Dwell
- Number of Carloads Dwelling +48 Hours and Carloads Shipped by Week
- Unit Train Metrics
Train speed is expressed in miles per hour (MPH): calculated by dividing the total distance travelled by the hours operated. An increase in train speed indicates that trains are moving between hub yards faster but does not account for the time railcars spend in yards.
The good news for shippers is that train speeds have (mostly) increased this year compared to previous periods, although most shipper service complaints are about yard dwell, not speed moving between yards. This is especially true for the railroads that implemented PSR operating models.
Train Speeds in Miles Per Hour 2021 YTD vs 2017 and 2019
Train speed is an interesting indicator of overall network health, but it does not directly translate to shipment on-time performance.
Rail Terminal Dwell
Terminal dwell is calculated in hours and starts when a car first enters the yard and ends when a car exits the yard or transfers to another railroad. For many shippers, dwell metrics align more closely with their rail experience because shipments are more likely to be delayed in yards waiting to be built into departing trains or industrial service trains.
Most railroads improved terminal dwell vs 2017 benchmarks, particularly the railroads implementing PSR. However, the number of time cars spend in yards has increased compared to 2019 at almost every railroad. Due to a labor shortage at rail yards, this could be a ripple effect of COVID on the rail network.
Average Terminal Dwell Hours by Railroad 2021 YTD vs 2017 and 2019
A more telling indicator for shippers is the current dwell situation – what terminals are currently operating with throughput delays?
The data reported to the STB can be mapped. Shippers can analyze which routes might be impacted, if the shipper has knowledge of which major yards their shipments process through.
Terminal Dwell in Hours, Week of September 30 2021
The information is interesting, but doesn’t tell the shipper when their rail shipment will arrive at destination. Some railroads are responding to this challenge by creating Trip Plans for every railcar. Some of these railroads are also reporting the % compliance to trip plan to the public.
In our second article, we see how the operating performance of railroads, trip plan compliance, and rail shipment ETAs are calculated and how rail shippers can use these metrics to improve their networks.
One approach shippers are taking to manage better their shipments in this new era of railroading is to implement supply chain visibility and management software. ICL offers software and 3PL services that can help shippers reduce the cost and complexity in shipping by rail, learn more.