Factors That Affect Your Railcar Shipments

When tracking railcars, there are several components that determine how complex your rail shipping is and how much time is needed to properly monitor your fleet and follow up on problem railcars. These factors can increase or decrease the complexity of your shipments. Streamlining rail operations begins with understanding each factor and how it affects your rail operations. The less complicated the process of shipping by rail is the less complicated your solutions to challenges can be. Below we look at eight of the most common factors that affect the complexity of your railcar shipments, as well as methods of decreasing the complexity for each factor.

Eight Factors Affecting the Complexity of Your Railcar Shipments

Factors Affecting Railroad Shipments

1. Railcar Billing Accuracy and Timeliness

Complete and accurate bill of lading submissions are the first step in having smooth shipments. Railcar billing must be coordinated with plant operations; challenges can arise if the billing is not coordinated with the plant, especially if the railcar shipments depend on another party to execute them. Railcars need to be loaded to the correct weight, documentation needs to be approved, and the railcar needs to be shipped and released prior to the railroad crew arriving.

The timeliness of railcar billing can be improved by coordinating with plant contacts, ensuring documentation is complete, and beginning the shipment execution process well ahead of the railcar billing cutoff time. Ensure you know your billing cutoff time by reaching out to your serving carrier to discuss local service times.

2. Fleet Size and Shipment Volume

Typically, higher shipping volume and larger railcar fleets require more time to manage. As railcar fleet volumes expand and shipment volume increases, management efforts become more complex. Automated systems like RSI Logistics’ RSInet allow you to address multiple challenges created by increased railcar fleet size and shipment volume. Key features include tracking railcar maintenance records, shipment performance, railcar locations, and pipeline management.

Reporting tools like shipment volume and transit times give you a glance at performance, while tools like the fleet sizing model help you accurately structure your fleets and dedicate railcars accordingly. If you would like to learn more about these features and others offered in RSInet, click here for a free demo!

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3. Tracking the Complete Shipment Cycle or Only One Way

Rail shippers normally fall into one of two categories: those who ship with their own railcars, and those who do not. Organizations with their own equipment typically manage the entire railcar cycle; loaded to destination and empty returning. Organizations that do not have their own railcars and only receive inbound loaded deliveries, do not need to track and manage empty railcar moves.

Which category you fall into will impact the management effort required. Managing the entire railcar cycle brings challenges that are not experienced when only receiving loaded railcars.

4. Empty Car Repositioning

Empty railcars typically reverse route back to their origin. However, for some organizations their empty railcars may need to be routed to various locations. Redirecting empty railcars requires additional effort and monitoring, which increases the complexity of your rail operations.

Empty railcars are redirected by submitting empty billing before the railcar departs or diverting the empty railcar once it is already in transit. With railroad’s increased focus on efficiency, railcars are blocked early in their trip. This results in diversions requests that are often difficult or impossible to complete. A proactive approach is to closely monitor railcars at destination locations and create empty shipment billing prior to the railcar leaving the location. Another option may be to include empty railcar disposition instruction when shipping the railcar as a load.

Factors Affecting Railroad Shipments 3

5. Customer Handling

Another factor that affects the timeline of your railcar shipments is what customers do with your railcars. Your rail operations are less complex if you can rely on customers to turn your railcars around quickly and efficiently. However, increased complexity arises when your customers leave railcars sit idle in the local serving yard or hold onto railcars inside of their facility for an excessive amount of time.

To combat excessive hold times at customer locations you could considering charging them demurrage. If this is not an option, there are reporting options that will allow you to monitor railcars idle at customer locations and work with them to prioritize railcars for offloading.

6. Proper Planning and Management of Delivery Expectations

Your day may be quickly overcome by customers inquiring about when their railcars will arrive. Not all customer inquiries are a result of transit delays. Ensuring you understand transit times and shipping within proper lead times can help meet customer expectations.

Some questions to help you assess the true cause of overwhelming customer inquiries are:

  • What is the transit average?
  • Are customers ordering with enough lead time?
  • Are our plants shipping on time?
  • Should we adjust lead times for seasonal shifts in transit times?
  • Do we have an automated process to communicate railcar statuses, ETAs, and delays?

Considering questions like these can help you implement a plan to better meet your customer expectations. As a result, you may spend less time answering customer inquiries on a daily basis.

7. Impact of Precision Scheduled Railroading

While Precision Scheduled Railroading (PSR) has allowed the rail lines to become more fluid, there are still some first mile, last mile, side effects. A portion of this can be contributed to the difficulty in combining Class 1 rail carrier’s PSR efforts with the short line rail carriers that often provide local service.

Your local carriers and rail crews are the best line of communication regarding first and last mile. They can provide better insight on their challenges and will work with you to help move the railcars. Developing positive relationships with local crews is a crucial part of understanding and alleviating frustrations with local service.

8. The Cheapest Route Might Not Always be the Best Route

While the best rail rate often correlates with the best rail route, there may be scenarios where the cheapest rail rate is not always the best route. It is possible that your cheapest route may have a much longer or more variable transit time, costing you money in other areas.

If you are in a position where you have various routing options available, it is worthwhile to explore all those options. Researching your options ahead of time and weighing the pros and cons of each will allow to take advantage of the best overall option for your needs.

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These are some of the primary factors you should consider when assessing your rail operations and determining how to appropriately manage your rail fleet.

While the level of effort required varies from company to company, we have realized that a reasonable way of estimating the amount of time (minutes) required daily to perform basic railcar tracking and tracing is to multiple your monthly shipment volume by .25. For example, an organization shipping 150 railcars per month (150*.25=37.5) could expect to spend 30-45 minutes tracking and tracing railcars each day. This calculation assumes you are using a fully automated system to track and trace railcars. Without such a system, you may need to implement a manual track & track possess that will require significantly more time.

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

  • Pre-established shipping patterns
  • Railcar shipment and movement history
  • Automated exception identification
  • Pipeline management tools
  • Performance reporting such as transit times, customer hold times, shipment volumes, etc.

If you want shipping by rail to be less complex for your organization, click here to get started with us today!

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