6 Factors that Affect the Effort Required to Proactively Manage Your Railcar Shipments

When tracking your railcars, there are several drivers that determine how complex your rail shipping is and how much time is needed to properly monitor your fleet and follow up on problem cars.

Factors affecting the complexity of your railcar shipments

1. Railcar billing accuracy and timeliness

Complete and accurate bill of lading submissions are the first step in having smooth shipment transactions. Railcar billing has to be coordinated with plant operations and there can be challenges if the billing is not handled by the plant, especially if you are dependent on another party to bill shipments. Cars need to be loaded to the correct weight, documentation such as certificates of analysis approved, and the railcar completely ready to be released before the railroad crew arrives. You also may need to make sure that the railcar billing and release is done well in advance of the railroad’s cutoff time for that location.

2. Fleet size and shipment volume

Not surprisingly, higher shipping volume and larger fleets generally require more time to manage.

3. Tracking of the complete shipment cycle or only one way

Firms with their own equipment typically have to manage the whole railcar move, both loaded and empty. However some firms only need to track loaded shipments or focus on inbound cars. Which category you fall into will obviously impact the management effort.

4. Empty car repositioning

Empty railcars typically reverse route back to their origin. For some firms, all or a significant portion of their empty cars need to be routed to a different location. This requires significantly more effort and monitoring.

5. Customer handling

Another factor that effects the timeline of your railcar shipments is what the customer does with the cars once the shipment is complete. It is easier when customers quickly turn your cars. More work is required when cars sit in constructive placement status or the customer has excessive holding times.

6. Proper planning and management of delivery expectations

Logistics staff time will be eaten up if customers are calling to ask why their shipments have not arrived. You may need to ensure that railcars are shipped with the proper lead time based on average transit days and the customer’s desired placement date. Some questions to ask are:

  • Do your customers order with enough lead time?
  • Are your plants able to ship on time, or do they often release shipments late?
  • Do you adjust your lead times based on weather or other factors?
  • Do you have an automated process to communicate railcar status, ETAs, and issues?

By understanding and preparing for your customers delivery expectations, you can better communicate the timeline of your railcar shipments.

These are the primary considerations when thinking about how closely you need to monitor your railcar shipments and what is the appropriate level of effort. While the level of effort can vary a lot from company to company, we find that 0.25 x (monthly shipment volume) is a starting estimate of the number of minutes per day that needs to be spent on basic track and trace. For a firm shipping 150 railcars per month, that would equate to a bit over half an hour per day. This assumes a fully automated system is already in place to manage and track cars.

If you are not using an automated railcar tracking system, implementing one will typically reduce the monitoring and management effort by 25% or more.  An automated system provides you with the necessary tools to more efficiently track your railcars by providing:

  • Pre-established shipping patterns to promote billing accuracy
  • Complete railcar shipment and trace visibility and history
  • Potential problem railcars are flagged automatically
  • Pipeline visibility to ensure proper number of railcars at plants, customers, and enroute
  • Reporting to show railcars in CP status or at customer locations
  • Transit time reporting to help establish standard lead times for each shipping lane
  • Metric reporting to measure plant billing timeliness, customer hold times, transit times, etc.

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