Canadian National Railway smartens up

Written by John Dodge, Contributor

Railroads are not the first industry that come to mind when the subject of smart technologies comes up, but you'd be surprised. One nifty software application known as SmartYard is shuttling freight cars more efficiently through switching yards at the Canadian National Railway Co. (CN), whose 20,421 mile network stretches across Canada and deep into the U.S. midsection.

Using realtime data fed from points throughout CN's vast track network, SmartYard sequences freight car processing to lower the dwell (or languish) times in switching yards.

"It continuously adjusts to constantly changing conditions of the yard inventory and CN's network using preset parameters and rates to predict when processes associated with classification and train make-up will start and end. When the start or end time of a process conflicts with or does not support the yard's overall plan, alerts are displayed," according to CN's web site.

SmartYard suggests how cars should be "blocked" into outbound trains to get them on their way as fast as possible, lowering average dwell times at one yard from 27 hours to between 18 and 19, according to a feature story about CN in the August TRAINS magazine. "To take eight or nine hours from the dwell of 2,700 cars every day - that's powerful," one CN executive is quoted as saying in the story written by veteran railroad writer Fred Frailey (who I know and like me is an incurable railfan.).

Tools like SmartYard have helped CN has achieve the lowest operating ratio (65.9 per cent) of the seven largest railroads in North America.

CN CEO E. Hunter Harrison

Railroading is an exceptionally capital intensive business so asset utilization is the critical challenge. Frailey's story captures how CN CEO E. Hunter Harrison ripped up the `how to run a railroad' playbook and "finetuned [CN] for efficiency" by intensifying the use of the systems assets. Indeed, cost control and asset utilization make up to the CN's five core prinicples.

Railroading is legendary when it comes to resisting change so Harrison's gameplan has not come without a price. Some shippers are unhappy because CN dictates when the train will be there to load when the trend has been toward customer service. Employees must learn all facets of railroading and are disgruntled when they spend weekends learning new skills.

For his part, Hunter is a one of kind expert in all facets of running trains, which is rare among railroad execs. He started his railroad career in 1964 as a "carman oiler" or laborer. Later this year, he hands the reins to the company's CFO.

CN freight train running along the Canoe River in British Columbia.

What makes the CN story more remarkable is that a decade ago, it was owned and sluggishly run by the government of Canada. Now after spending more than $5 billion acquiring several major railroads, CN is the most efficient major railroad in North America.

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This post was originally published on Smartplanet.com

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