Digitalisation in rail freight: The key to a smart supply chain
Freight transport in Europe is expected to grow by 30 per cent by 2030 and, as part of the Rail Freight Forward initiative, Transfesa Logistics is committed to growing the portion of rail transport from the current 18 per cent to 30 per cent, thereby saving 290 million tonnes of CO2. A key to achieving this lies in the continued digitalisation of the rail system and, even more, on the full digitalisation of the entire supply chain. Bernd Hullerum, CEO of Transfesa Logistics, explains that, as a ‘door-to-door’ integrated solution provider, it is putting a major effort in achieving this by focusing on paperless processes and full track and trace capabilities for its customers.
Where do we stand today: Freight transport does not stop growing, even during a global pandemic like the one we are experiencing today. Freight transport and, even more so, rail freight transport, is essential and perhaps more important than ever before. During the recent impact of the pandemic, the whole of society has understood that efficiently working supply chains, which previously have not been noticed, are essential to our day-to-day life and for the proper functioning of the economy. Thanks to the fact that supply chains have been stable, society has been able to access basic goods without limitations, and we have supported the transport of critical equipment for health professionals across Europe. Especially, the rail sector has demonstrated its resilience and stability in the most difficult of environments.
This pandemic has also taught us that we are already a digitalised society. Communication is – by being forced through social distancing and banning people from leaving home – already majorly undertaken via online and app solutions, the home office is now the standard, video conferences a normality and business 4.0 a must. I can only agree that the current pandemic has done more for digitalisation than many other efforts over recent years.
The digital investment in rail traffic management
Moving now into the railway segment, starting with the infrastructure, we also see significant movements. All national infrastructure managers are heavily investing in the digitalisation of traffic management in order to improve the capacity of the existing infrastructure – for example, through smart switches, automated crossings and many other initiatives. However, there are two major challenges: first, the huge investments needed. For example, the fitting of only the entire German rail network with the European Train Control System (ETCS) could potentially cost up to €30 billion. Secondly, the missing European harmonisation and, still, the dominance of country‑specific solutions. We need a strong European push for harmonised platforms and borderless data exchanges. In the end, the goal must be that it is as easy to run a train across Europe as it is to drive a truck on European highways.
Efficient asset management is key
We are installing smart chips in our axles to allow for the full traceability of axles and wagons across Europe”
For us, the efficient management of our assets is key. Here, expert artificial intelligence (AI) systems allow us, for example, to move from corrective to preventive maintenance – not only for high-tech locomotives, but also for ‘stupid’ rail wagons. In Transfesa Logistics, for example, we are installing smart chips in our axles to allow for the full traceability of axles and wagons across Europe. This provides more than just information on a wagon’s location. It also helps us to monitor usage times and incidents, and thereby allows us to steer the maintenance pro-actively, including feeding this information into our maintenance workshops. Also, in the maintenance workshops, paperless and seamless information flows – e.g. through tablets and scan devices – helping to avoid manual intervention and errors in the revision and repair process.
Digitalisation to fully integrate the supply chain
As aforementioned, we are committed to growing the portion of rail freight transport significantly, thereby supporting European goals on CO2 reduction. For this, the integration of supply chain solutions is key, and digitalisation plays a major role. Today, data exchange and flawless track and trace from door‑to‑door is a challenge. Shippers, agents, transport companies, rail and terminal operators, public institutions etc., all have their own data/systems and interfaces which are not always automated, and no commonly shared platforms exist. In order to offer a solution to this problem, Transfesa Logistics launched the SORTLOT Project. The target is to develop, together with our partners, a digitalised supply chain ecosystem based on blockchain technology for providing end-to-end traceability and smart contracts for process automation, IoT (Internet of Things) in asset identification and the development of innovative AI applications, as well as ‘machine learning’ for the entire logistics process, as examples. Thereby all stakeholders – such as shippers, rail and road transport companies, shipping lines, logistics operators, port authorities, railway infrastructure managers, customs authorities etc. – can operate on one fully integrated open ecosystem.
Our car carrier wagons are equipped with GPS for full and real-time tracking. This helps, on the one hand, to immediately see supply chain interruptions and act accordingly, but it is also the basis for traffic optimisation based on AI algorithms”
A second example of integrating the entire value chain using digitalisation to drive business control and efficiency is the automotive finished vehicle transport. Once cars are produced in the factory, they are then transported by rail to their final destination – normally a vehicle logistics centre, where they are unloaded, prepared and then delivered to the car dealership or, nowadays, even to the final customer directly to their home. Especially in the time of coronavirus, this is an interesting opportunity for contactless handover to the customer. Our car carrier wagons are equipped with GPS for full and real-time tracking. This helps, on the one hand, to immediately see supply chain interruptions and act accordingly, but it is also the basis for traffic optimisation based on AI algorithms. Once the cars arrive, through IoT technology, we have full and paperless traceability for storing, washing, inspection and final delivery preparation, to vehicle registration and customer delivery. Of course, this information is also available for our transport customers and suppliers in real‑time.
Especially in the alimentation sector, but also general for intermodal services, the traceability of the transported goods is key for our customers”
A third example is the intermodal business. Transfesa Logistics has a long-standing experience in European intermodal business – for example, establishing the longest European rail freight service between France and Turkey and connecting the European automotive industry centre with our rail solutions. Our traditional history has been in the export of fruits from Spain, a segment that we just recently re-opened, with a new service connecting Valencia with Dagenham. Especially in the alimentation sector, but also general for intermodal services, the traceability of the transported goods is key for our customers. Especially in the reefer business, temperature control is vital. We achieve this by partially installing GPS, as well as an integrated transport management system that manages the entire door‑to-door process, from pick-up, pre‑haulage by truck, terminal management, long-haul by train, terminal management at the delivery point and last-mile truck. This allows for full transparency for the traffic managers and early warning tools to avoid supply chain interruptions, as well as full access to this information for our customers. The next step will be to allow automated booking for these intermodal trains across Europe.
These are just some concrete examples of how we believe digitalisation will change the rail sector as an integrated part of European supply chain solutions, driving rail freight to be an integral part of eco‑friendly, sustainable, efficient and high‑quality transport solutions and helping Europe to reach its CO2 targets.
Bernd Hullerum has been the CEO of Transfesa Logistics since 2010. He is also President of the Board of FEDA German Business School and Board Member of the German Chamber of Commerce for Spain (AHK). Bernd began his career with Mercedes‑Benz and has held various international management positions in the automotive and logistics business in Germany, the U.S., Mexico and the Iberian Peninsula. He was previously Chief Financial Officer (CFO) at DB Schenker Rail Automotive Division, CEO of Chrysler Germany and Head of Corporate Strategy at DaimlerChrysler for financial services and sales, amongst other positions. He holds a degree in Business Administration and IT from ‘Verwaltungs- und Wirtschaftsakademie Stuttgart’, Germany.
Artificial Intelligence (AI), Cargo, Freight & Heavy-Haul, Coronavirus/COVID-19, Digitalisation, European Train Control System (ETCS), Interoperability & Liberalisation, Multimodality, Sustainability/Decarbonisation, Technology & Software, The Supply Chain