Railroads Post-PSR

PSR 2.0

The economic headwinds aside, technologically, trucking is in the midst of making significant strides that will improve the ability for the sector to compete (or partner) with rail. The impact of other technologies, specifically a wide range of automated ‘drone’ delivery systems, have the potential to truly alter the landscape of North American transportation. 

In Taking the Railroad Playbook Beyond PSR, the authors suggest “Improve operations effectiveness by applying digital technologies and advanced analytics. Railroads can use digital technology—such as Internet of Things applications—to enhance the reliability and traceability of goods and railcars and to integrate their traceability and tracking with other transport modes.” They also suggest using “predictive analytics to reroute assets more dynamically and increase speed.” Interestingly, CN (among others) is already moving in that direction: “Data is the new currency, proving to be the most important strategic asset… The future is now. As we evolve from a traditional railway to the digital connected railway of the future, next generation technology algorithms designed to provide real time information to our crews and customers are laying the foundations of the digital connected railway.” 

The Post PSR study also suggests railroads, “Rethink core commercial functions by digitally managing pricing and demand. Across the value chain, logistics players are radically changing their go-to-market strategies. In part, they are being pushed to do so by highly innovative players such as Amazon, eBay, and Walmart. These innovative companies use more sophisticated buying practices that require faster quote turnarounds.” 

Will railroads operate more like integrators in the future? Certainly, some railroads have already begun developing a tech-based post-PSR strategy. But will the industry be able to keep pace with economic, socio-political and environmental changes of the new roaring 20’s…and turn a profit?