Congestion at Railyards in North America Highlights the Need for Network-Wide Investment in Yard Management Solutions

By Ryan Wiggin | 3Q 2024 | IN-7495

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Railyard congestion has remained prominent through 2024, with dwell times rivalling those seen during the COVID-19 pandemic. Containers of rail-bound cargo at the twin ports of Long Beach and Los Angeles are experiencing estimated dwell times of 16.4 days, the highest of the year and over 5 days longer than in May 2024. Other West Coast railyards, such as California rail terminals in Bartow and West Colton, have seen similar increases in dwell time, with dwell times up about 8% in early 3Q compared to 2Q. Other major U.S. ports, such as Texas ports in Corpus Christi and Houston, are also reporting drastic dwell times, with containers at the Port of Houston experiencing dwell times of approximately 10.5 days.

In Canada, the backlog of freight has amplified tensions between the rail companies and their respective employees. The Teamsters Canada Rail Conference (TCRC) has directly cited crew scheduling and fatigue management as leading causes behind a potential strike (planned for August 22), with railyards in Vancouver, Montreal, Calgary, and Edmonton already observing container dwell times of over a week as of July 2024. Even though the strike is not yet confirmed (awaiting agreement), the broader supply chain is bracing for what could be a "devastating" impact to the North American supply chain. Shipping firm Maersk has already decided to halt further acceptance of Canada-destined shipments that require movement by rail, citing a particularly adverse effect on the automotive industry due to its just-in-time supply planning.

Across North America, these congested ports are more critical than ever, with intermodal freight volumes growing across the board. Compared to the first 30 weeks of 2023, intermodal freight is up 2.3% in the United States, 1.6% in Canada, and 4.8% in Mexico. The increase in freight volume will put even more strain on shippers and increase the criticality of solving these congestion issues.

Two of the primary causes of port congestion are struggles with scheduling container transport and lack of sufficient visibility of potential bottlenecks. One leading method of trying to solve these issues is improving functions at the railyard through implementing Yard Management Systems (YMSs).

One key benefit of leveraging a YMS is to streamline the repair and maintenance activities at the railyard. YMS platforms can utilize established asset tracking capabilities to pinpoint exactly where damage has been flagged and instantly schedule repairs upon arrival at the railyard. YMS software also leverages these tracking capabilities to allow shippers to retain visibility of the conditions of assets and rail components throughout the entire maintenance process. One leading YMS provider, Kaleris, recently highlighted a module of its YMS that integrates its platform with maintenance and repair operations. Kaleris showcased how incorporating railcar data from a company's shop network with its YMS platform enables seamless reintroduction of components that have been fixed and minimizes downtime due to maintenance.

Another emerging YMS provider, GoRamp, has generated market buzz surrounding its platform's central dashboard adaptability and accessible User Interface (UI). The flexibility of GoRamp's YMS enables railyard managers to mold the platform to their specific railyard, allowing for more efficiency and understanding in regard to employee scheduling. The individual scanning of containers, coordination of loading and unloading, and other boots on the ground tasks can be organized from a recognizable centralized platform, limiting the possibility of miscommunication and greatly reducing the time needed to address each task. The development of YMS solutions is still a nascent aspect of the rail freight space, with providers such as Kaleris and GoRamp frequently updating their software with solutions as they discover new ways to optimize the railyard.

With significant innovation in the IoT hardware space and increased value placed on supply chain transparency and visibility, YMS platforms can have widespread positive impacts on the rail industry, but key considerations remain for both providers and end users. For providers, it is important to consider unique regional differences and market maturity when identifying the best opportunities for expansion. YMS implementation is flourishing in the United States and Canada, but penetration into the European Union (EU) and other world markets has relatively lagged. Within the EU specifically, there are significant challenges faced with cross-border travel due to fragmentation in rail infrastructure and differences in protocols across countries. Cross-border rail freight currently only accounts for 6% of total European freight transportation due to the many limitations; however, this figure is swiftly increasing as European market integration grows. In response to this industry trend, YMS providers should emphasize increasing the interoperability of their software. Improving YMS compatibility with the many country-specific technical standards and hardware differences would be key for European rail freight companies. Another focus should be ensuring that the YMS can integrate with the European Train Control System (ETCS) and corresponding devices. Currently, the ETCS supports only 11% of the total EU rail networks; however, that coverage is expected to grow significantly due to government support, making it a pivotal aspect of YMS implementation in the EU.

For end users, it is essential to focus on dedicated providers that are developing best-of-breed solutions for the rail industry. It is too often the case in yard management that companies will choose a bolt-on "yard module" over investing in a best-of-breed solution from a dedicated provider, only to find they lack the functionality, tracking capabilities, and system developments required to tackle the challenges they're facing. Concerns around system integration, usability, and costs of the unknown are often cited when considering a new provider, but dedicated providers continue to offer the best expertise, continued support, product development, and industry partnerships that allow for a much greater Return on Investment (ROI) that is much more adaptable as the industry changes. Companies should also consider the use of yard management solutions across their network of yards, not just in a single yard. Unlike warehouses or manufacturing facilities that often have very controlled operations, yards are much more fluid and unique. Testing new solutions at multiple facilities will help identify unique challenges and provide a tool for central planning teams to compare performance and best practices, creating an additional avenue for generating greater operational efficiency across the board.