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Trucking, Autonomy and the Future of Rail
Doug Reese
Chief Strategy & Growth Officer
GE Transportation Digital Solutions
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Freight transportation trends threaten rail
eCommerce changing the
way we acquire
goods…era of guaranteed
shipping
Emergence of disruptive
technologies…platooning,
autonomous trucking,
electric
Logistics startups
attracting new investments
Driving high service expectations
Last-mile delivery gaining in
prominence
Potential logistics value
chain disruption through
digitization
Likely to improve trucking competitive
position vis-à-vis railroads
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Other potential disruptors
Democratization of
manufacturing
Additive manufacturing or
3-D printing has the
potential to disrupt supply
chains
Blockchain
technologies
Uberization of
freight
Commercial
drone deliveries
Blockchain likely to
become integral part of
supply chains
Potentially disruptive to
carrier/shipper business
models
Drone delivery likely
to impact on final mile
delivery.
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Trucking has it’s own challenges
Capacity
crunch/high
demand
Driver
shortages
Spot rates
skyrocketing
How will this all impact the railroad industry?
Electronic
Logging
Device (ELD)
mandate
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Rail isn’t going anywhere
40% Amount of freight moved by rail in ton-miles in the U.S.
4x Average fuel efficiency of rail as compares to trucks
75% Reduction in greenhouse gases
emissions moving freight by rail instead
of truck
67% NA Class 1 op ratio - compare to
~90% for trucking – rail is far more
profitable
2 November 2018Edit Presentation Title in [Insert Tab > Header & Footer]
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Rail can (and should) take share from trucking
WHY?
1% shift in N.A. share from truck to rail = ~10% rev increase for N.A. rail
Share losses to trucking are self-inflicted & correctable
9 October 2018 9
How?
1. Sustain & enable intermodal growth
2. Integrated visibility & logistics to improve service
3. Unclog networks with optimization & op changes
4. Double down on cost savings with automation
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Sustaining intermodal – port & terminal effectiveness
Outcomes:
Customer Challenge:
• Choke points @ ports &
terminals
• High fixed costs to expand
ports & intermodal terminals
• Fragmented, disconnected,
and often manual processes
• YOY Intermodal growth >6%
Visibility Optimization AutomationPort Optimizer
Solutions:
Smart Intermodal
TOS
Work Order
Assignment
Railcar
Blocking
Unit Location
Assignment <---------Real time optimization & visualization ---------
>
8-12%projected efficiency
@ Port of LA
10-15% gantry lift
productivity
15-20% hostler moves
Integrated visibility & logistics integration - Ports
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Enabling visibility and execution across an integrated supply
chain
Port OptimizerCargoOwner
Ocean Carrier
Motor Carrier
TerminalOperator
Cargo Owner
• visibility for better
customer service
• Better planning for dray
partners cargo
velocity thru ports
• container dwell
• velocity of cargo thru
port
• rail volume thru
terminal
• velocity of cargo thru
port
• velocity of empty returns
Marine Terminal Op’r
Visibility +
Cargo VelocityCargo Dwell + Cargo
Velocity + Rail Volume
Ocean Carrier
Visibility +
Cargo Velocity
Motor Carrier
Turn Times +
Productive Turns
• Faster truck turn times
• number of productive
turns per day
Railroad
Rail Volume +
Visibility + Speed
Railroad
ChassisProvider
• rail volume through
ports
• visibility to empty railcar
inventory speed of
rail volume thru ports
Chassis Provider
• accuracy of chassis
inventory and forecast
chassis utilization
• Improved planning
chassis utilization
Accuracy +
Chassis Utilization
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Integrated visibility & logistics – Bulk Shippers
“We want to ship (and
receive) more rail. We
don’t have information or
confidence as to when
we will get rail cars. So,
we truck more.”
• First railcar & inventory-in-
transit visibility solution
• Connects shipper, Class I and
short line rail data to enable
informed decision-making
Outcomes:
10%Rail Volume
14 days Advance Visibility
1 Information
Source“I used the visibility tool this morning and within seconds, I had all
the data at my fingertips. There have been days where it’s taken
me hours to get this information … the availability of the tool has
been especially meaningful due to the effects of the hurricane.”
Customer Challenge:
Pulp and Paper Producer
Solution:
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Unclog networks with optimization
Outcomes:
Customer Challenges: Solutions: Network optimization + operational changes
Terminal& yard optimization
cloud capableservices/
containers
optimization /
automation
modern user
experience
open system /
integration
systems of systems
not just a TOS
10-15% lift productivity
10% Network
velocity
15-
20% hostler
moves
50% expired crews
• 2018 rail network velocity
is worse than 4 years ago
. . . rail systems need to
change operating models
and fix bottlenecks
• Terminal dwell has been
nearly static since 2015 @
>20 hours (!!!)
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Double down on cost savings with automation
Outcomes:
Customer Challenges: Solutions:Train Automation
90% train
“break-in-twos”
3-17% fuel
efficiency
Up to 50%crew costs
possible near term
Safety & hauling
capacity
Crew costs and fuel
represent the
biggest
opportunities for
cost reduction in
rail
Movement authority &
optimization (MP)
Interface to control
system (DP)
Energy Management
(TO)
Interface to Signaling
(Safety Overlay)
ATO Authorization
Sensory Monitor
ATO Control Engine
Foundation
(Available today)
Level 2 automation
(1-3 years) Full automation
(3+ years)
Progression
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More connected, more visible, more integrated, more flexible … the new freight rail landscape is happening now …
Port &
Supply
Chain
Visibility
Asset
Performance
Management
Network &
Yard
Optimization
Automation
Transportatio
n
Management
Edge
devices &
cloud
connectivity
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GE Transportation . . . soon to be part of